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COMPETENCE  -  INTEGRITY  -  EXPERIENCE


Evaluating Your Compensation System

Take this brief review to see how your organization’s compensation program is doing. Record the number which best describes your current situation.

1.      JOB DESCRIPTIONS

5    All job descriptions have been updated within the last year. Our system ensures regular review, updating and sign off for accuracy. Impact on compensation levels is assessed.

4    Most of our job descriptions are current. When a job content change occurs, job descriptions are updated on a fairly timely basis.

3    No job description is more than 5 years old. One way or the other, they do get reviewed and signed off for accuracy. If job content changes, the job description does get reviewed, but it may be sometime before we get to it.

2    Many job descriptions are out of date. Many do not reflect current   job and some are missing. We’d like to bring things up to date, but don’t get to it because of other priorities.

1    We don’t have the time to get job descriptions completed. We do   have some old descriptions for some jobs, but some are missing.

0     Have few or no job descriptions.

2.      ADA COMPLIANCE

5    All of our job descriptions distinguish essential from non-essential duties, reflect only job content-validated requirements, and provide physical and mental requirements that are linked to essential duties.

4    We are in the process of adding ADA compliance, but have not finished yet. ADA compliance is in for most jobs.

3    About half our jobs have descriptions that are ADA compliant.

2     We’ve started, but haven’t made much progress so far.

1     We are in the process of preparing a plan.

0     We are thinking about it … or …”What is the ADA?”

For questions 3 through 6, circle the number that best describes how your program compares to the description given.

Rating

Description

5

An exact match

4

Most of this is in place, but not all of it.

3

About half of this is in place, and we make a good effort where we don’t have a formal program.

2

We don’t have a lot of this, but we do make an effort.

1

Our program is very informal.

0

None of this is in place

3.      INTERNAL EQUITY

We have a formal job evaluation scheme that compares the internal value of each job in relation to all others in the organization. The scheme is systematic, consistent, accurate and equitable. Management either participates in the scheme or accepts it as reliable and valid. When job content changes, we quickly re-evaluate (“re-grade”) jobs. We have an effective communication plan to ensure employee understanding and acceptance of the job evaluation program.

      5          4          3          2          1          0

4.   4.     EXTERNAL COMPETITIVENESS (External Equity)

Our wage and salary levels facilitate successful recruiting and allow retention of our most valued employees. Our pay rates reflect rates in our respective labor market areas. We regularly survey an established group of employers in our labor markets. We have an established a policy which is clearly communicated regarding our position in relation to our various markets.

      5          4          3          2          1          0

5.    5.    PERFORMANCE MANAGEMENT

Written performance standards are developed in advance of the rating period, and involve input by employees to ensure understanding and “buy-in.” Performance standards are based on job content rather than personality traits and reflect the most current job assignments. Employees are given periodic feedback throughout the plan period to allow for corrections. Employees have the opportunity to alter their performance standards or objectives if their job changes or external factors beyond their control affect their ability to meet objectives.

      5          4          3          2          1          0

6.    6.    PERFORMANCE REWARDS

Managers have the ability to provide significantly different pay increases or bonuses to employees who perform at significantly different levels. Employees perceive a link between their performance and their pay. Outstanding employees can expect pay increases and bonuses that significantly exceed those of poor performers. Managers and employees fully understand the program and see it as objective and fair.

      5          4          3          2          1          0

7.    SCORING

Find your score by adding the ratings from the six categories above. Use the following to assess how well you are doing.

Total score

 

30 – 27

You have a model program. Pat yourself on the back and sleep well at night

26 – 23

Sounds like things are fine. You may have some areas where your compensation dollars are not being used effectively or where program improvements could be made.

22 – 18

You have a lot of work to do. It is doubtful that compensation dollars are being used meaningfully or valued by employees. You may have areas of legal vulnerability.

17 – 13

You have an opportunity to make dramatic improvements. Make them soon.

12 and below

Be sure that you are not identified as having responsibility for the compensation program(s) in your organization!

©  Human Resource Compensation and Management, 2003