By Claudine Kapel
What are you willing to pay to get that perfect job candidate to accept your job offer?
Or perhaps, more importantly, what might the hiring manager be willing to offer to close the deal?
Hopefully, the answer isn’t “the sky’s the limit.”
Effective compensation management calls for consistency in how pay programs are managed. That doesn’t mean there’s no room for judgment. But you are more likely to stumble into a pay pothole when there are no guidelines for supporting decisions – or when such guidelines are ignored.
Too much discretion can result in individuals being hired at salaries that are near – or above – the top of their salary ranges. That can lead to compensation headaches down the road, because there won’t be much room left to accommodate future salary increases.
Worse, you can find yourself grappling with significant employee discontent if the word gets out that the new hire is making more than everyone else. And it will.
And off-the-map salaries aren’t the only kind of pothole that can disrupt an otherwise well-managed compensation system. One-off deals pertaining to job titles, salary range level, bonus opportunity or other elements of the total rewards package can lead to internal equity issues – and internal discord. They can also come with high costs that could have been avoided.
To ensure everyone is paddling in the same direction, it is important to first establish clear policies and frameworks that guide how to shape a suitable job offer. When preparing to fill a new or vacant position, it is important for both human resources and the hiring manager to have a clear, shared perspective on the following:
- The salary range and level of the job.
- What the job is eligible for from a total rewards perspective. For example, is the job bonus eligible? Is it eligible for a car or car allowance? Does it get stock options?
- Policies pertaining to other reward programs, such as the criteria for participating in the company benefits program or retirement savings plan, or how vacation entitlements are defined.
To facilitate a smooth recruiting process, hiring managers need to be clear about where they can exercise discretion – and where they can’t.
And where there is room for discretion, hiring managers could benefit from creative insights on how to get the deal closed. For example, signing bonuses or bonus guarantees can sweeten a job offer without undermining the integrity of the organization’s total rewards programs and policies.
Upfront clarity and dialogue – before a job offer is even made – will invariably serve as the ounce of prevention that helps mitigate the need for a pound of cure.
Claudine Kapel is principal of Kapel and Associates Inc., a Toronto-based human resources and communications consulting firm specializing in the design and implementation of compensation and total rewards programs. For more information, visit www.kapelandassociates.com.