Compression for Production Worker Pay
Andrea
20 Posts
I'm curious if anyone out there is or has been in a similar situation, and if so, how was it resolved.
We are a non-union facility and pay our production workers on a scale (up to a certain level). Our workers start at the entry level and as they move up the steps each year, their pay goes up to the next level (step increases).
Once an employee reaches the top of the scale, they become Sr. or Advanced production workers and they receive pay increases based on merit. The nice thing for them is that they don't top out and can earn more than their peers if they are better performers. One of the downsides is that they are used to getting larger increases as they progress up the scale and then when they go to the merit system, their increases are smaller.
The issue that we are running into is compression. As these people are here for longer and longer periods of time, their pay starts to get closer to some in higher job grades. When we make adjustments, they get upset that their increase is smaller than the other production workers because they are getting the same increase as office workers, etc. even though they are production workers.
One thought that came out is that they get half of what the production adjustment increase is and the remainder is based on performance, however, that doesn't seem fair to everyone else who only gets performance based increases. It also increases the compression issue.
I'm thinking that most employers perhaps have a top scale and other than COLA's, they are topped out. Is anyone in a similar situation and can you offer any suggestions on how you improved it?
We are a non-union facility and pay our production workers on a scale (up to a certain level). Our workers start at the entry level and as they move up the steps each year, their pay goes up to the next level (step increases).
Once an employee reaches the top of the scale, they become Sr. or Advanced production workers and they receive pay increases based on merit. The nice thing for them is that they don't top out and can earn more than their peers if they are better performers. One of the downsides is that they are used to getting larger increases as they progress up the scale and then when they go to the merit system, their increases are smaller.
The issue that we are running into is compression. As these people are here for longer and longer periods of time, their pay starts to get closer to some in higher job grades. When we make adjustments, they get upset that their increase is smaller than the other production workers because they are getting the same increase as office workers, etc. even though they are production workers.
One thought that came out is that they get half of what the production adjustment increase is and the remainder is based on performance, however, that doesn't seem fair to everyone else who only gets performance based increases. It also increases the compression issue.
I'm thinking that most employers perhaps have a top scale and other than COLA's, they are topped out. Is anyone in a similar situation and can you offer any suggestions on how you improved it?
Comments
The solution that I suggest is easy for me to say, but will be somewhat painful in instituting. I suggest you go to an all merit system with the increases tied to two things:
1. Where they are in their payscale as a percentage of the midpoint.
2. The overall "grade" they receive on their performance review.
Then fill in the matrix with percentage increases.
I did that here and based the percentages on our typical learning curve and I used a 40% range for nonexempt and a 50% range for exempt.
Contact me privately and I will get you a copy of what I have.