Equitable remuneration? I don’t think so!

3 June, 2010

Before I launch into my rant about salary spines, I first up want to say my problem is not with how much I’m being paid to do my current job. I believe I’m being paid well. My problem is with the system. Sure, I could earn at least double my salary as a contractor, triple or more as a consultant but as long as I have enough money to pay the rent, buy food, petrol and the occasional music CD I’m happy.

Imagine if every house on your street was valued at $300,000 regardless of size, location, landscaping, age and condition? Doesn’t seem right does it. But that’s essentially how structure salary scales in corporations and government work. In government you might start around APS4 level, work up to APS6 and if you show promise then you might get EL1 technical or lead promotion and if you’re smart, persistent or a sociopath then you might get EL2, even SES1. Some manage to get to SES2 and higher.

If you stay past the first 12 months and then past 2 years you’ll get a “point increment”, APS5.1, APS6.2 etc. A pay-rise of a few thousand dollars.

Whilst moving between levels such as from APS5 to APS6 requires that you demonstrate additional capabilities, responsibility, awareness, all people at any one level in an organisation are remunerated the same. But just like the houses on the street analogy employees are not robots and will demonstrate varying levels of commitment, passion, expertise, effort … and value.

How does an organisation evaluate an employee’s value? It doesn’t, not really. You can’t measure an employee’s value by how many emails they send in a day, how vocal they are in a meeting, how many hours they’re at their desk or how many phone calls they make. Even with people who handle incoming correspondence or run a service desk, you simply can’t work with the numbers. So instead we’ve gone to the other end of the scale and lumped nearly everyone into five main categories from APS4 to EL2 (who make up the majority of staff) and expect standardised performance.

It’s not that simple.

As I said, I’m happy with how much I get paid and I don’t compare myself to other EL1 staff in the organisation – I just do the best job I can.

But the question does have to be asked, is this attempt by organisations and government to implement fair scales of remuneration actually inequitable? Are we shying away from performance-based pay and genuine performance evaluation and management because it’s too hard or because we’re scared? Are we just taking the easy route?

It’s not a big issue; I don’t often hear people complaining they do more work and contribute more (in their eyes) than people who are paid more than them but it does happen.

Whoever says that measuring employee value is impossible is either lazy or not thinking creatively enough. It can be done.

One comment

  1. Thank you for this great posting. I agree that in many cases the most “just” compensation structure is the least equitable or “fair”. Nearly everyone wants to get paid what they are worth. Very few truly know their worth. This is generally a product of poor communication.

    If companies were to design plans to drive and reward performance and then communicate these plans consistently and persistently both the companies and most employees would be better off.

    Performance-based compensation, or Performance Pay, is a growing trend, but it is ironically growing faster in government-supported industry than it is in private industry.

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