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News & Information
| Article | Publication Date |
| The Five Biggest Mistakes in Compensation and How to Avoid Them #1 | October 2011 |
| The Five Biggest Mistakes in Compensation and How to Avoid Them #2 | November 2011 |
| The Five Biggest Mistakes in Compensation and How to Avoid Them #3 | December 2011 |
| The Five Biggest Mistakes in Compensation and How to Avoid Them #4 | January 2012 |
| The Five Biggest Mistakes in Compensation and How to Avoid Them #5 | February 2012 |
| Article: The Five Biggest Mistakes in Compensation and How to Avoid Them #3 | Publication: December 2011 |
The third of the Five Biggest Mistakes is Merit Budgeting.
Sound Familiar?
See if this describes your merit budgeting process: (1) you research various surveys and document the average merit budget; (2) you tell the boss what you've found; (3) Finance tells the boss what the company can afford,; and. (4) the boss tells you what the merit increase will be.
This is not at all uncommon.
Unfortunately, it is a strategic recipe for disaster. Here's the deal - if the market moves at 3% per year (as it has been) and you budget anything less, you're losing ground. Do that for just a few years and you find yourself in a deep hole that only LOTS of money will fix. But that's not the worse ...read on!
Think About it:
It's just simple math: if an employee is 10% below market and your merit increases are 3%, the employee will still be 10% below market 30 years from now!
How to Avoid It:
If the majority of your employees are in the lower portion of the pay range, you have to budget more than the average market movement to get employees where they should be. That, combined with a good merit matrix, will help to correct the situation.
Next month, we'll focus on mistake #4 - poor pay delivery.
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The annual average weighted rate paid for Receptionist is $25,379 Source: 2012-2013 State of Tennessee Salary, Wage & Benefits Survey |
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