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Job Titles - Compensation - And Responsibilities - They Must Be In Sync
In my consulting work I am often asked how to pay people, and what titles go with what jobs. I think the right answer requires a thorough understanding of the responsibilities assigned to the individuals.
By: Art Consoli
In my consulting work I am often asked how to pay people, and what titles go with what jobs. I think the right answer requires a thorough understanding of the responsibilities assigned to the individuals.
By: Art Consoli
I think the three pieces; pay, titles, and responsibilities are tied together.
For starters compensation data by job title (not by defined responsibilities) by industry by geographic area and by size of company is readily available. Employers use this information and as well as employees - it’s really how negotiations begin. It’s also why employees care so much about the title. Unfortunately many employers “give” titles away too easily.
To help you with these three decisions I think you should spend time creating an organization chart with the boxes clearly identified. That’s right; no matter what your company’s size make a chart. It can be very simple and I suggest you use simple terms not titles. Focus more on what is required of the “box.”
Label the top box, “Decision Maker.” Reporting to that box might be three boxes; “Makes the donuts (MTD)”, “Sells the donuts”, “Keeps us out of trouble.” Maybe under MTD you might need two more boxes; “Buys the stuff ” and “Gets the donuts shipped.” Even if it’s just you and a partner or a jack-of-all-trades person, create all the boxes - just put your name and the other person’s name in the boxes.
As you grow and more clearly see the future needs of the business you will add more boxes. You will also start hiring people and that’s when you need to get, titles, pay and responsibilities in sync.
I strongly, very strongly advocate - did I say VERY strongly advocate - that before you hire anybody, you look at the box they will fill and outline the results you want, the responsibilities they will have, and the authority you will give them. Try to define things in terms of units or dollars and time. You might say, “in charge of making 500 donuts per machine per hour”, or in charge of making the week’s donuts”, or “in charge of selling all the donuts to make that month’s projections.”
When you think, outline, and start to hire with this chart as your guide, you should also start to think about what the pay range for the box should be. A specific person’s experience will help you place them within the pay range, and force you to think about pay raises. I like to hire the best person I can for every job, but when I hire somebody near the top of that box’s pay range, I know that I will have to plan on moving them up to a higher box soon, or when I tell them there’s no more room in that box’s pay range - I may lose them.
One other thing to consider with respect to pay; the range should reflect what you will pay for “standard” performance - handling the responsibilities and authority defined and generating the results required.
Page 2
Art Consoli's unique background and skills allow him to speak and write about how someone with limited experience can do a self-evaluation which will let him decide which business opportunity is best, how to evaluate opportunities and gain control over the one which offers the greatest potential and then manage that business to success. Readers of his book call and write to tell him how much his book has helped their lives and improved their business. The author can be reached at www.businessstrategyartconsoli.com.
For starters compensation data by job title (not by defined responsibilities) by industry by geographic area and by size of company is readily available. Employers use this information and as well as employees - it’s really how negotiations begin. It’s also why employees care so much about the title. Unfortunately many employers “give” titles away too easily.
To help you with these three decisions I think you should spend time creating an organization chart with the boxes clearly identified. That’s right; no matter what your company’s size make a chart. It can be very simple and I suggest you use simple terms not titles. Focus more on what is required of the “box.”
Label the top box, “Decision Maker.” Reporting to that box might be three boxes; “Makes the donuts (MTD)”, “Sells the donuts”, “Keeps us out of trouble.” Maybe under MTD you might need two more boxes; “Buys the stuff ” and “Gets the donuts shipped.” Even if it’s just you and a partner or a jack-of-all-trades person, create all the boxes - just put your name and the other person’s name in the boxes.
As you grow and more clearly see the future needs of the business you will add more boxes. You will also start hiring people and that’s when you need to get, titles, pay and responsibilities in sync.
I strongly, very strongly advocate - did I say VERY strongly advocate - that before you hire anybody, you look at the box they will fill and outline the results you want, the responsibilities they will have, and the authority you will give them. Try to define things in terms of units or dollars and time. You might say, “in charge of making 500 donuts per machine per hour”, or in charge of making the week’s donuts”, or “in charge of selling all the donuts to make that month’s projections.”
When you think, outline, and start to hire with this chart as your guide, you should also start to think about what the pay range for the box should be. A specific person’s experience will help you place them within the pay range, and force you to think about pay raises. I like to hire the best person I can for every job, but when I hire somebody near the top of that box’s pay range, I know that I will have to plan on moving them up to a higher box soon, or when I tell them there’s no more room in that box’s pay range - I may lose them.
One other thing to consider with respect to pay; the range should reflect what you will pay for “standard” performance - handling the responsibilities and authority defined and generating the results required.
Page 2
Art Consoli's unique background and skills allow him to speak and write about how someone with limited experience can do a self-evaluation which will let him decide which business opportunity is best, how to evaluate opportunities and gain control over the one which offers the greatest potential and then manage that business to success. Readers of his book call and write to tell him how much his book has helped their lives and improved their business. The author can be reached at www.businessstrategyartconsoli.com.
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