Challenge: An organization with long-tenured employees had hundreds of different job titles and were receiving significant complaints about internal equity.
Solution Deployed: We conducted a complete assessment of the compensation program. As a part of this assessment, we identified necessary changes that needed to be made to the pay plan. More than $500,000 in annual salary expenses were going to employees who had been promoted and then demoted when they were unable to perform at the higher level. These individuals continued to stay at the higher pay grade and continued to earn pay increases every year. Although the CEO had previously committed to never reducing pay grades or capping employee pay, he realized a change was desperately needed and decided to re-think his position.
Pay ranges were introduced, and some individuals had several small pay reductions spaced over several years. The affected employees were disappointed but realized that they had benefited for many years from the higher pay levels. Several employees expressed surprise that the company waited so long to correct their pay.
Business Value Delivered: The organization was able to use these movements to market rates to incentivize and reward others increasing team morale.
Client Industry: Utility
Project Type: Market Pricing, Compensation Structure, Strategic Communication
Business Structure: For-Profit, Privately Held