Pay For The Job or The Person?

May 22, 2012 at 10:00 am 2 comments

One of my colleagues recently asked me whether it was appropriate to pay a new hire more money than existing employees in the same position because the new hire had more education/experience.  As with most human resource questions, the answer isn’t cut and dried.  Let’s follow a fictional example and see where it takes us.

I’m the CEO of Snail Mail Inc.  I employee stamp stickers and envelope stuffers.  Most of my employees have basic skills and education and do a fine job with those qualifications.  They get paid $10/hour.

Due to snail mail being in vogue, I need to hire another stamp sticker.  I’ve gone through the normal recruitment process, and have found a candidate that I want to hire.  The candidate will be performing the same work as the other stamp stickers.  However, this candidate has a Masters degree in Orchestral Composition from Julliard and 20 years of stamp sticking experience.  I decide to pay this person $20/hour because of these additional qualifications.

Before implementing this decision, I should ask myself these questions:

  • Are the candidate’s education and experience relevant to the job?
  • Will the candidate be using those skills and experience in the job they are being hired for?
  • Will I alter the scope of the position to leverage the candidate’s additional skills and experience?

If the answers to these questions are “yes”, then I may be able to pay them more than the other stamp stickers.

Here are a few cautionary notes to consider because, let’s face it, employees talk about their pay to each other:

  • When the other stamp stickers find out the new person gets paid more, how will that affect their morale?
  • Are the lesser paid people the same gender as the new hire?  The Equal Pay Act (EPA) requires that men and women performing similar work under similar conditions must receive similar pay.  You also don’t want it to appear that you are discriminating against the other employees because of their age, gender, race, religion, sexual orientation, national origin, or other protected status.
  • Will paying the new person more give them an unwarranted sense of entitlement?

In the end, it’s best to pay a person for the work they are performing now, not what they might do, have the potential to do, or have done in the past.

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2 Comments

  • 1. EcoGrrl  |  May 22, 2012 at 7:15 pm

    This is extremely good advice that I have shared in my HR & Recruiting work as well. Evaluating what the position itself is worth and sticking within a reasonable salary range when hiring is not only equitable, but good business practice. In our HR decisions we ultimately are PR to our staff and potential applicants -how we treat our workers affects our reputation as employers worth working for. Thanks!!

  • 2. My Homepage  |  May 24, 2012 at 9:55 pm

    I like this post, enjoyed this one thanks for posting . 231748


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