Tiered Pay Structures - what works what doesn't

[Ox]

Well, you can alter quotes too, so not sure how much water that holds either...

I would prefer that you doo NOT quote a spammer or other, as I don't see that I need to clean up forty-leven other replies when there is one offender.
That just gits ridicalickalickalous.


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Think Snow Eh!
Ox

 

[BoxcarPete]

If you don't quote it, the poster can alter or remove it and make the person reporting it look like the nuisance.

If that becomes an issue, getting an honest-to-goodness admin involved should straighten it out rather quickly, as the servers otter remember what alterations were done and when.

More on-topic, the payscale for measurable and tracked skills is only as good as your (and your employees') honesty. Back at Big Tier 1 Auto, Inc. (multi-billion NA branch of a privately owned Japanese company) they had one of those and it didn't do me a bit of good. I wasted half a day scoring myself as honestly as I could in 40-50 skills, and once I realized that I rated solidly as an ENG III and looking at Sr ENG sooner rather than later, I thought I could bully myself into a raise, as I was ENG II at the time. Turns out I didn't have enough "points" on their other (HR-based) pay-scale tier list, I had some for a BS in Engineering, and some more for my years of experience, but wasn't enough for the next pay grade. The end result is that management blew me off whenever I brought up the skill chart, and ended up sweeping the whole thing under the rug as best they could for the whole group, presumably because it was causing more headaches than it solved. Never challenged me on any of the skill rankings, just that the skill chart alone wasn't enough to get me the next level.

Don't be like that if you're going to bring it up.

 

[Mike1974]

If that becomes an issue, getting an honest-to-goodness admin involved should straighten it out rather quickly, as the servers otter remember what alterations were done and when.

More on-topic, the payscale for measurable and tracked skills is only as good as your (and your employees') honesty. Back at Big Tier 1 Auto, Inc. (multi-billion NA branch of a privately owned Japanese company) they had one of those and it didn't do me a bit of good. I wasted half a day scoring myself as honestly as I could in 40-50 skills, and once I realized that I rated solidly as an ENG III and looking at Sr ENG sooner rather than later, I thought I could bully myself into a raise, as I was ENG II at the time. Turns out I didn't have enough "points" on their other (HR-based) pay-scale tier list, I had some for a BS in Engineering, and some more for my years of experience, but wasn't enough for the next pay grade. The end result is that management blew me off whenever I brought up the skill chart, and ended up sweeping the whole thing under the rug as best they could for the whole group, presumably because it was causing more headaches than it solved. Never challenged me on any of the skill rankings, just that the skill chart alone wasn't enough to get me the next level.

Don't be like that if you're going to bring it up.

Been there done that. We had something like that. Rate yourself, I did so honestly as you. 4-5 for skills, workmanship, etc. 2-3 for other things I felt like I was lacking. The kick in the ass was with several "skills" tied to working with others, but I was in our startup machine shop by myself! How the hell was I supposed to work with that?

 

[AndyF]

I'd be careful with the "attitude" criteria. What I like better is behavior. Attitude is inherently subjective, while behaviors are objective, but both lead to the same outcome - a pleasant workplace with productive employees. Define the behaviors you want to see in the shop and the attitude you are desiring will follow.

 

[metalmadness]

Chip in toward health insurance or a 401k, these are intangibles that most people forget about, but they mean A LOT to the average employee like me. If you can't afford insurance, look into what it would cost you as an employer to have an HSA/FSA for the guys. A quick google says it costs you $5 per employee to outsource an FSA, but you avoid the 7.5% payroll tax on anything the guys put into their FSA, so it might be a net win for the employer, and I bet the employees would appreciate it.
.

Health insurance and 401k are most certainly not "intangibles". Those are benefits that I consider make-or-break when it comes to a job, and additionally they are tangible enough that both 401k AND health insurance affect your taxes. Some employer sponsored health insurance payments are considered income.

If a company can't offer health insurance for less than $150/week which is already too high, I won't work for em. Realistically $200/mo is reasonable IMO. If a company doesn't do a 401K match, I won't work for em.

Intangibles are things like free coffee, flex time, a nice office, nice scenery nearby. Healthcare and 401k are core employment benefits. Health care alone will affect your bottom line on each paycheck more than anything. Great hourly wage but you have high premiums? Use that to factor into your hourly rate. You could easily lose $5/hr on healthcare premiums alone.

 

[CAMasochism]

Been there done that. We had something like that. Rate yourself, I did so honestly as you. 4-5 for skills, workmanship, etc. 2-3 for other things I felt like I was lacking. The kick in the ass was with several "skills" tied to working with others, but I was in our startup machine shop by myself! How the hell was I supposed to work with that?

Score: 1
Reason: I can't stand the dumbass that keeps misplacing my calipers all over the shop and leaving me messes to clean up later.

 

[standardparts]

Have to assume you have no legal agreement (union contract) with your staff regarding pay and skill levels.

Also depends on what your labor laws are regarding discharge of an employee as that could create a very costly situation if you decide to prove your serious about work rules and fire someone.

Tiered pay scales. I worked in a union environment where the hourly rate was locked based on skill trade wages.

The company had the right to create some classifications based on added skills that benefitted the company and helped meet it's objectives.

So there was a long list of qualifications that could be achieved thru company paid training (big benefit for employee and recognition of skills) and with those qualifications hold back and overtime became very predictable ($$$$ a way to reward the hard chargers outside of standard overtime based on seniority).

Here's where it went bad......Favoritism reared it's head with some pencil whipping of quals with many really unable to carry out the work they had received special training for---which also carried with it overtime for basically not living up to the work skills you were supposed to have.

So, along came the inevitable sparring with management due to lower level supervision playing games.

WHAT BIT THEM IN THE ASS---

--Those with quals for some real critical work like field service at a remote location starting deferring to people who lacked the real skills to carry out the assignment.

--Many simply filed a letter stating they wanted the quals removed. Of course it did not play into their base wage one bit and most often the overtime increased due to the mess the unskilled created.

Anyway---The more complex the rules the more people will, right or wrong, figure a way to make your life miserable. Once your people buy into the 20/80 rule that 20% are doing 80% of the work they will demand more money.

Keep it simple. Consider that over the long haul everyone may max out within their pay progressions at a time when you can't afford to decipher a complex wage structure.

 

[William Payne]

The thing with pay scales is you could have 5 guys all equally skilled, all earning the same money but each one of them will be living under different financial circumstances.

So many variables, what is good for one may not be for another. Lifestyle, number of children, single or married, commute distance. Those aren't things that are controlled by the employer but they are all variables that effect the employees.

 

[Mcgyver]

The thing with pay scales is you could have 5 guys all equally skilled, all earning the same money but each one of them will be living under different financial circumstances.

So many variables, what is good for one may not be for another. Lifestyle, number of children, single or married, commute distance. Those aren't things that are controlled by the employer but they are all variables that effect the employees.

I can't vary pay based on what I think their needs are. Wages are a market, an exchange of time & skills for money. I have to structure pay at the market price of what it takes to get the skills I need

 

[William Payne]

I can't vary pay based on what I think their needs are. Wages are a market, an exchange of time & skills for money. I have to structure pay at the market price of what it takes to get the skills I need

Absolutely and I wouldn’t expect you to. I was more saying that you can’t please everyone.

 

[Mcgyver]

Absolutely and I wouldn’t expect you to. I was more saying that you can’t please everyone.

absolutely!....figured that out the day I got my first employee

 

[camscan]

When I worked for the man (thanks for that dualkit) I realised that I was getting all the shit jobs. I spoke to the main man and explained the situation. He did not want to know so I decided that the machines with the shit jobs would not be running. He called me into the office and asked what the problem was. I told him that we had already discussed this problem. He asked how we sorted this out and I told him to share the shit work around the shop. His reply was that the rest of the crew could not run these jobs, I replied, yes, I know. He asked what do we do now? I suggested that he tell the customer that we could not do the work. He said that I had him over a barrel and what would it cost him to sort the problem. I told him and he said that that would cost me. I told him that,No,it would cost him. One month later I was offered a better job, more money and better conditions. The main man said why are you leaving?
I said I told you it would cost you and now you know what I meant.
The boss is not always right even if it's his business.

 

[ttrager]

My brother had just got a promotion at his shop. He told a "buddy" how much he was making. They walked him out later that day......

What state was this in? Michigan, an example from another poster, is an "employment at will" State. And, depending on the state, there may be specific state legislation (or not) protecting worker's right to discuss wages.

Messy stuff when Lawyers are involved.

 

[CITIZEN F16]

When I worked for the man (thanks for that dualkit) I realised that I was getting all the shit jobs. I spoke to the main man and explained the situation. He did not want to know so I decided that the machines with the shit jobs would not be running. He called me into the office and asked what the problem was. I told him that we had already discussed this problem. He asked how we sorted this out and I told him to share the shit work around the shop. His reply was that the rest of the crew could not run these jobs, I replied, yes, I know. He asked what do we do now? I suggested that he tell the customer that we could not do the work. He said that I had him over a barrel and what would it cost him to sort the problem. I told him and he said that that would cost me. I told him that,No,it would cost him. One month later I was offered a better job, more money and better conditions. The main man said why are you leaving?
I said I told you it would cost you and now you know what I meant.
The boss is not always right even if it's his business.

Were you at least getting more money? I worked in a place with tiered wages and I was in your shoes. When I confronted my boss he said "I was the path of least resistance". Problem was due to the tiered system and the way the qualifications were written I was maxed out for my department and so were a half dozen others, but it was always me they came to when there was a fire to put out. Machinist pay maxed out two levels below what you could attain working in plant maintenance. I finally left and less than a year after that they allowed machinists to go up to the the top levels.

 

[camscan]

Were you at least getting more money? I worked in a place with tiered wages and I was in your shoes. When I confronted my boss he said "I was the path of least resistance". Problem was due to the tiered system and the way the qualifications were written I was maxed out for my department and so were a half dozen others, but it was always me they came to when there was a fire to put out. Machinist pay maxed out two levels below what you could attain working in plant maintenance. I finally left and less than a year after that they allowed machinists to go up to the the top levels.

At the time of my complaint I was on the same wage as the rest of the shop. There were no other departments.

 

[PHDesigns]

I used to work for a place that had 4 tiers of pay level. There were 3-4 levels in each with a .25 an hour raise for each. Learn the skill, take a test and pass, move up one notch. After you passed all 4, there was another test, pass it and move up to the next tier. Hardest part (for me) was the guys who would learn the next level, take the test to get the raise, but had not real skill to 'master' that level or desire to work at that level. They just wanted the money and without the job responsibilities. For most it worked well, though.

 

[Mcgyver]

one thing that concerns me about levels within tiers, you now 16 pay rates. Add in 5 or 6 categories and I've got way more pay rates than guys. And 16 tests! I can see that having some merit in a huge company, but it would too much for us to handle.

I also see with many small increments, the constant badgering for a raise becomes a constant badgering to "move me up a level".

I want to pay everyone well. Really, I want to lead the market so I get the pick of the best talent, but this parade of guys coming in asking for a raise is one of the things I'd like to get away from. Its disruptive. Someone will ask and receive and that fuels issues (telling them not to tell anyone does not work and is about impossible to police), everyone's upset and comparing themselves and start with their own plans for a raise. Then they think, "well if I have a another job offer", etc. Its disruptive.

I could just restrict raises to the time of the annual review, but I also need the ability to change to react to the market. e.g. if I can't attract enough T1 welders, I up the rate for them - with a structure I don't have to up all the rates or wait for the annual review time.

I do appreciate all the input, I've not done anything yet as I see its complicated with a long list of pros and cons. Probably cons I haven't thought of, which can be the most painful bites in the ass

 

[charlie gary]

I think it was the same guy. Prompt response from the PM team, I never saw either post except quotes of it. Made me wonder if I had him on ignore even though I haven't ever used the feature.

Pro-tip: don't quote crap like that.

I disagree with not quoting stuff like that. Had it not been quoted, I would have never seen it and learned what type of person he/she is. I now know who to avoid.

 

[Ox]

... and then either I have to clean up the quoted posts, or I git a "reported post" report that asks me to go back and clean up the quoted posts later.

I'm telling y'all - don't doo it!


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Think Snow Eh!
Ox

 

[Mark P.]

Health insurance and 401k are most certainly not "intangibles". Those are benefits that I consider make-or-break when it comes to a job, and additionally they are tangible enough that both 401k AND health insurance affect your taxes. Some employer sponsored health insurance payments are considered income.

If a company can't offer health insurance for less than $150/week which is already too high, I won't work for em. Realistically $200/mo is reasonable IMO. If a company doesn't do a 401K match, I won't work for em.

Intangibles are things like free coffee, flex time, a nice office, nice scenery nearby. Healthcare and 401k are core employment benefits. Health care alone will affect your bottom line on each paycheck more than anything. Great hourly wage but you have high premiums? Use that to factor into your hourly rate. You could easily lose $5/hr on healthcare premiums alone.

I am 55 1/2 and I am actively seeking employment. So far, the couple of shops I've spoken to are wanting me to pay for my health insurance. The first one wanted half...with a not great pay rate. The other wanted half for me and to pay full for my wife. Pay rate was better than the first but the insurance nullifies the increase in pay rate. From what I was making to what I'm being offered is probably 1/4 to 1/3 decrease in pay?? My search is probably going to have to focus on larger companies and possibly something like an Amazon or Fed-Ex or the like.