Part III of the Compensation Market Data Series is now availble!

When we talk about a non-profit organization, we are normally referring to an organization that fits into one of three categories: education, government, or a more generic, dedicated not-for-profit. The data we are looking at today takes into account all three sectors of the non-profit world through four common positions, as well as one healthcare position scoped for the non-profit sector.

Compensation Market Data Series part III

Remember, we looked at the Staff Nurse position as it related to Healthcare in Part II, so check back if you want to compare that data with the same position scoped for the non-profit sector.

In looking at this data, it is possible that an employee may be paid at a much higher rate than the numbers here reflect, and there are many possible explanations.

  • For employees who have been a part of the organization for a while, periodic cost of living and/or merit increases can easily make the salary of that employee move above the midpoint.
  • The area in which your particular organization is located may not be considered desirable, so successfully recruiting people may require more incentives, like higher pay.
  • It is also possible that an employee may just have been hired in at a higher-than-necessary rate, or has received excessive increases over their time at the organization. When there is no market data or structure to support hiring decisions, it’s easy for salaries to be all over the board.

So let’s say you have an employee who is paid over market and you want to stop the cycle. What are some options for dealing with this situation?

  • If they are high performers and only a little above the market (between the 50th and 75thpercentile, for example), probably no action is necessary. Employees who have been a member of an organization for an extended period of time will naturally progress through their pay range, so as long as it isn’t out of whack with the progression of other employees in similar positions, there is not a need for alarm.
  • If you determine an employee is grossly overpaid (i.e. towards the 90th percentile of the market data or, if you have a structure, over the maximum of their grade), you can always red circle or ‘freeze’ their salary and refrain from giving them an increase until the market and/or structure catches up. With high performers, this is dangerous because they may move on, so you could offer lump sum bonuses in lieu of salary increases in order to give the employee an incentive to continue performing without increasing their total base salary.
  • If you have an employee in a position paid more than the market says that position is worth, you can always attempt to make that position worth it. Enrich or enlarge the job by adding additional tasks to their duties, or give them more responsibility or autonomy to complete their work. This will both increase the value of this job while potentially reducing the workload for other employees, a situation that can work to the advantage of many.

Now that you know how to interpret market data and how to evaluate/handle employees that may be high or low, next week we’ll look at how the market treats manufacturing jobs and discuss how to come up with a plan for implementing change in a compensation plan based on the market data.

As always, you can reach HRG at (859) 514-7724, or send Allison an e-mail at allison@hannaresource.com

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