I'm seriously looking at going to a tiered pay structure. Various categories of work, each with three tiers of set wages.
The criteria I've thought of using to determine someones tier is Skills (what complexity and quality of work they are they capable of), Productivity (time wasting with 45 min bathroom breaks or consistently beating the job's hours) Versatility (willing to do whatever is asked, field work, occasional shift work etc) and Attitude (is the culture better or worse for their presence). There is a lot more to each, but that should give a sense of it. Open to criticism/ideas on other ways to look at it.
I see lots of advantages to this, everyone knows where they stand and they get cost of living increase every year. No more parade of asking for raises and the key advantage I see is if I'm not attracting a certain category and tier of worker, I can assume my rate for it is inadequate. I can raise that to whatever it needs to be and have a rational for doing so without raising the hackles of everybody else (in theory anyway, or at least there is a defense/argument for why). That means existing guys in that tier and category get a bump...but really, if I'm I'm below market to point I can't attract talent, they should get a bump anyway or I risk loosing them.
The idea is that the tier rate should mimic or just lead the market rate for any given trade and quality tier of individual. I'm ok always paying just a little ahead of market. That isn't out of altruism, but because its the way ensure you get all the quality people you need (an over simplification, but you're going to get all you need otherwise). Nailing quality and productivity will make me more money than the 'lead' costs me. There is no reward for tenure, but it would be reasonable to expect skills and productivity would increase with time (for anyone who wanted to)
I'm told many firms have three 'levels' of pay with a tier. I see merits in this because it give some flexibility, but otoh its a step backward in that the formal structure is to get away from discretion based pay rate and and the constantly pleading of cases. I think its easy to distinguish three tiers, but three levels within each tier? That's 9 gradients! I can tell if a welder is a 1 or a 2 or a 3......doesn't seem so meaningful trying to rationalize what makes a welder a 6 or 7 (on the 9 part scale of 3 levels each in 3 tiers)
Biggest negative of a major change to pay structure are the unintended consequences....the thing that'll bite my ass that I haven't thought of.
This is new territory for me and I welcome a discussion and your advice on pro's and cons, whether to pursue this, doe's and don'ts etc
The criteria I've thought of using to determine someones tier is Skills (what complexity and quality of work they are they capable of), Productivity (time wasting with 45 min bathroom breaks or consistently beating the job's hours) Versatility (willing to do whatever is asked, field work, occasional shift work etc) and Attitude (is the culture better or worse for their presence). There is a lot more to each, but that should give a sense of it. Open to criticism/ideas on other ways to look at it.
I see lots of advantages to this, everyone knows where they stand and they get cost of living increase every year. No more parade of asking for raises and the key advantage I see is if I'm not attracting a certain category and tier of worker, I can assume my rate for it is inadequate. I can raise that to whatever it needs to be and have a rational for doing so without raising the hackles of everybody else (in theory anyway, or at least there is a defense/argument for why). That means existing guys in that tier and category get a bump...but really, if I'm I'm below market to point I can't attract talent, they should get a bump anyway or I risk loosing them.
The idea is that the tier rate should mimic or just lead the market rate for any given trade and quality tier of individual. I'm ok always paying just a little ahead of market. That isn't out of altruism, but because its the way ensure you get all the quality people you need (an over simplification, but you're going to get all you need otherwise). Nailing quality and productivity will make me more money than the 'lead' costs me. There is no reward for tenure, but it would be reasonable to expect skills and productivity would increase with time (for anyone who wanted to)
I'm told many firms have three 'levels' of pay with a tier. I see merits in this because it give some flexibility, but otoh its a step backward in that the formal structure is to get away from discretion based pay rate and and the constantly pleading of cases. I think its easy to distinguish three tiers, but three levels within each tier? That's 9 gradients! I can tell if a welder is a 1 or a 2 or a 3......doesn't seem so meaningful trying to rationalize what makes a welder a 6 or 7 (on the 9 part scale of 3 levels each in 3 tiers)
Biggest negative of a major change to pay structure are the unintended consequences....the thing that'll bite my ass that I haven't thought of.
This is new territory for me and I welcome a discussion and your advice on pro's and cons, whether to pursue this, doe's and don'ts etc