A series of posts on the topic of compensation programs would not be complete without a few words on the documentation.
As I’ve referred to numerous times here on Executive Pastor Online, the Management System is where policies, procedures, forms, etc. reside. So, of course, the compensation program documentation is part of the Management System as well.
The compensation program should be a “policy” as opposed to an “operating procedure.” Why? While there is a procedural aspect to the program as far as the annual market comparison, for the most part, it’s more of a document that “states position or approach,” therefore a policy document. Make sense?
Here are the sections of the policy:
- Purpose – What is the purpose of the policy? This section usually says something to the effect of, “The purpose of this policy is to establish and communicate the approach for determining the rate of compensation for staff members … etc.”
- Background – What is the situation in the organization at the time the policy is written? Why is such a policy being documented and implemented?
- Scope – What does this policy include and what does it not include? In other words, put the policy between its “bookends.”
- Responsibility – Who in the organization is primarily responsible for the policy? In most cases, policy’s have shared ownership, but there should be one particular position in the organization that “owns” the policy, procedure, etc. You know what they say, “If everybody owns it, nobody owns it.”
- Definitions – If any unusual terms or jargon unique to the organization or particular policy are used in the document, they are defined in this section.
- Policy – What is the policy itself?
- Attachments – The compensation program policy has a number of attachments. Job descriptions are forms that are numbered as such to be connected to the compensation program policy. There are exempt and non-exempt salary ranges and grade levels. There’s a list of positions in order of grade level. There’s also a list of “comparison positions” that includes a “percent of median calculation” and other pertinent information needed for evaluation.
- Policy Effectiveness – How will the effectiveness of this policy be measured? Remember the Performance Cycle and the importance of “measuring results.”