How Can You Keep Your Valued Employees?

Are you paying fair wages to your employees? Do the wages motivate your employees? Find out by classifying or ranking the job positions in your workplace.

1. You can use several ranking plans:

• A. Rank by market. You compare each worker's position to a similar position within the job market. Be careful. Compare job duties, not job titles.

  • Example: Is the position of a stockperson in your store worth more or less than what the average stockperson makes at other grocery stores?

  B. Rank by evaluation. You give a title to each position and rate one position against the others.

  • Example: Is a stockperson more important than a cashier, a secretary, a bookkeeper?

  C. Rank by job duties. You break down each job into a cluster of job skills and duties, then award points to these different skills. Add them up, figure out which positions have the most points and deserve the most pay. This method works best for smaller and younger businesses or organizations where each employee will likely wear several different "hats."

  • Example: A stockperson in your store not only stocks shelves. He or she also checks in orders and makes suggestions on inventory. This person comes in on Sundays and washes and waxes the floors. How do these skills compare with those of other positions?

2. Involve employees in your ranking plan:

• Make sure your employees understand that a wage and salary ranking plan will make for fairer and more equitable wages. Answer their questions early:

  Will you immediately raise the wages of your stockpersons if your ranking plan shows they are underpaid? What will happen if your cashiers make too much money? Will you cut their pay, freeze their income? Answer these questions before you even begin your study. You will have fewer headaches if you have to reduce pay.

3. Problems with ranking plans:

• Don't over-emphasize market factors. You could bid up salaries if you pay too much attention to competition. You might pay unfair wages and salaries because of inequities in the job market.

  Don't give unfair advantage to some workers. Because your produce manager happens to be a likable person, don't assume the position is worth more money than the position of meat manager. Emphasizing certain job skills may discriminate against minorities.

  • Example: Emphasizing physical strength in your job analysis will favor men. And academic education may or may not be more important than vocational training.

  A major problem in compensating employees is paying those with highly specialized skills. You may not feel such skills deserve the going rates. But because of the job market conditions, you have no choice but to pay this rate.

  • Example: You decide to provide kosher meats to the Jewish community in your city. You need to hire a kosher butcher. Such a specialized skill as this will probably cost you more than a regular butcher.

What to do: Choose a ranking plan that fits your needs. Discuss it with your employees. Stick with the plan you have chosen.