According to research on reward fairness completed last year by WorldatWork, Hay Group and Loyola's Dow Scott, the number one focus of employee concerns about internal equity and fairness -- ranking higher even than base pay or salary increases -- is career development opportunities. It is no surprise, then, to find that the management of promotions is becoming a topic of increasing importance. I know that this is the case with many of the organizations I personally serve.
A helpful snapshot of the state of promotions can be found in just-released research from WorldatWork. The study, conducted in August 2012 and reflecting the responses of 873 reward professionals, was also completed in 2006 and 2010, providing some historical context. I had an opportunity to chat with WorldatWork Practice Leader Kerry Chou about the research; below are a few highlights from our conversation.
Promotions on the rebound. Promotions, both in number (percent of employees promoted) and in mean size of promotional increase, dropped off during the recession but are showing signs of rebound. The average study respondent reported that 8.4% of employees received a promotion in the most recent fiscal year, which is up from the 7.0% reported in the 2010 study but still well below the 10.5% reported in 2006. Promotional increases follow the same pattern, with current (2012) mean increases of 7.4% for nonexempts, 8.7% for exempts and 10.2% for officers/executives.
More proactive communication? There appears to have been a dramatic shift in communication of promotional guidelines and policies in the past few years. In 2010, most (63%) respondents reported that promotional guidelines and policies were mostly used to guide HR and management, though shared with employees when they asked. In 2012, this number dropped to 13%, presumably (giving some benefit of doubt here) indicating more open, proactive sharing of promotional policy information.
Increased control and scrutiny. Given that employers have kept a somewhat tight lid on promotions during tough times (and knowing, as the earlier Hay research confirms, that fairness in internal career opportunities is a top employee concern), it is not surprising to learn that there is more careful scrutiny and control of promotions today than a few years ago. For example, in 2010, 77% of respondents reported that their organization did not set limits to how many grades/bands/levels employees could move in a single promotion. In 2012, only 7% reported no such limits.
As with many reward elements, Kerry notes, we may see many of these practices and trends -- and particularly the higher level of caution -- shift as the labor market turns and the demand for talent rises.
How do the findings of this research compare with promotional practices in your organization?
Ann Bares is the Founder and Editor of the Compensation Café, Author of Compensation Force and Managing Partner of Altura Consulting Group LLC, where she provides compensation consulting services to a wide range of client organizations. Ann was recently named President Elect of the Twin Cities Compensation Network (the most awesome local reward network on the planet) and has joined the Advisory Board of the Compensation & Benefits Review, the leading journal for those who design, implement, evaluate and communicate total rewards. She earned her M.B.A. at Northwestern University’s Kellogg School and is a bookhound and aspiring cook in her spare time. Follow her on Twitter at @annbares.
Creative Commons image courtesy of Images_of_Money
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