Get access to the exclusive HR Resources you need to succeed in 2018.
Sign up for free email newsletters and get more SHRM content delivered to your inbox.
Is your employee handbook keeping up with the changing world of work? With SHRM's Employee Handbook Builder get peace of mind that your handbook is up-to-date.
Build competencies, establish credibility and advance your career—while earning PDCs—at SHRM Seminars in 14 cities across the U.S. this fall.
Gain the skills you need to rise to the next level in your career. Jon us at SHRM's Leadership Development Forum, October 2-3 in Boston.
Members may download one copy of our sample forms and templates for your personal use within your organization. Please note that all such forms and policies should be reviewed by your legal counsel for compliance with applicable law, and should be modified to suit your organization’s culture, industry, and practices. Neither members nor non-members may reproduce such samples in any other way (e.g., to republish in a book or use for a commercial purpose) without SHRM’s permission. To request permission for specific items, click on the “reuse permissions” button on the page where you find the item.
Salary administration programs are designed to provide competitive and equitable base pay to all employees, through the use of salary structures and formal policies and procedures. Though many companies develop salary structures informally, having periodic benchmarking and salary structure adjustments can ensure internal parity while maintaining external competitiveness.
An effective salary administration program allows a company to meet the basic objectives of compensation: focus, attract, retain and motivate. In addition, the program should be flexible to allow for changing conditions and fluctuations within the company and marketplace. Often, salary administration programs are tied to a pay-for-performance philosophy, whereby annual increases are differentiated based on the evaluated performance of an employee, and may be further influenced by the employee's placement within his/her salary range.
Through a salary administration audit, the following would be addressed:
Once the salary structures and policies have been reviewed and updated, it is key to conduct training sessions with management to communicate what changes have taken place. This training will help with their continued buy-in, as well as allow managers to have a consistent message as they relate changes to their staff.
While the initial design process is well-intended, salary administration programs can fail for many reasons including the lack of:
Companies should consider the reassessment of their salary administration program, along with all their compensation plans, as a vital and on-going part of the program's success. Assessing the program to ensure that it continues to meet your company's needs—and that it is perceived as a credible and functional part of the HR process—will enhance your company's ability to remain a competitive force in the marketplace.
Sara D. Schmidt,PHR, is a consultant with
Compensation Resources, Inc.,a provider of compensation and HR consulting services to mostly mid- and small-sized public and private companies as well as not-for-profit organizations.
2013 Compensation Resources, Inc. All rights reserved. Republished with permission.
Related SHRM Articles:
Updating Salary Structure: When, Why and How?,
SHRM Online Compensation, May 2013
The Art of Setting Pay,
HR Magazine, May 2013
Building a Market-Based Pay Structure from Scratch, SHRM Toolkits, May 2013
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Please sign in as a SHRM member before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Join us for the largest and best HR conference in the world, June 23-26, 2019 in Las Vegas.
SHRM’s HR Vendor Directory contains over 10,000 companies