Evaluations and salary increases

judy matt · October 2003

I am looking for suggestions on changing our eval/salary increase system. Currently we evaluatate everyone when they complete 3 months of employment. WE call that a "trial period". No increases are given at that time, however. Then, we evaluatate at the employee's one year anniversary date, they are eligible for an increase then. We recently formed a new company and would like to change all that. We would like to evaluate everyone once a year. We are thinking April of 2004. The question is how do we fairly treat those hired on in October or any other month that is currently or will soon be eligible for an increase? We would also like to d/c the use of trial period and only do evals once! Any suggesions or methods would be greatly appreciated!

Judy/N.O.

marc · October 2003

We evaluate after 6 months and then also at the first anniversary. Both of these events can lead to an increase. Usually the 6 month does not and usually the annual does, however, both are discretionary based on performance and availability of funding (we are a not-for-profit). Thereafter it is annually in December, and increases, if any happen in January for the bulk of the staff. No matter how you approach this issue, you have to acknowledge the stub period and deal with it. For the most part, we discuss it with the ees in question. There will always be instances when someone gets a larger or smaller increase than their peers when the annual increases happen, but they are still based on performance, not on longevity. With that at the base, you can generally deal with the inevitable question about why Jane Smith got a larger increase than John Doe.

judy matt · October 2003

Thanks for your input, I really appreciate it!

Judy

San Francisco · October 2003

Just this year, we started doing the same thing. All exempt evaluations were due in April and non-exempt in August. Those with anniversaries before and after April had raises pro-rated. To determine the amount of proration, a factor was automatically applied based on the month of the last increase and the number of months since that last increase to the next increase in April 2003. The factor will never be more than 1, meaning if it has been 12 months since the last pay increase, the employee will receive a 100% proration factor ie a "1". The factors were calculated by the compensation department, so the proration factor for a prior May anniversary (11 months since last raise) was 0.92, June was 0.83 etc. The manager then had to determine the salary increase (which was only 3% tops this year) and apply it to the proration rate.

So. Say the employee's anniversary was June and the employee earns $60,000/yr. Since only 3% raise can be given and the proration factor is 0.83, the employee would receive a raise of $1494. And on down the through the months to December which has a proration factor of 0.33.

I hope I've explained this correctly. This was done by compensation and math and computations elude me.

Elizabeth

judy matt · October 2003

Thanks, Elizabeth. I really appreciate your help. That really helps and it seems fair.

Thanks again!

Pork · October 2003

JUDY MATT: I highly recommend you get away from the wage increase being tied to an evaluation period.

For the last twenty (20) years I have been installing what I and others chose to call a "pay for performance system"; I brief every new employee that we know what the rate ranges are for each position, each work site, and each complex, and the entire company, therefore, we are able to ascertain who is working below, at, or above their level of service & time to benefit the whole team. Our management team will get you to the level you need to be, based on how strong you are becoming as a team member. Everyone started off at your present starting level and they have progressed, accordingly. We will not wait for a evaluation time to give you an increase if you are deserving one we will insure you get one. We also will not hold back on giving you a "SUPER STAR" increase and let you set the example for where everyone else should be!

Once you dis-connect these two activities the evaluations are much easier and truthful for the individual.

We eval in writing after 60 days, mid-year review in June and end-year in December all with deadlines for completion if there is a compensation change.

Because we have the "pay for performance system" in place with our 11 farms it has also become easy to go backward in compensation when someone is slipping or holding back the team's performance record. The teams are paid a seperate bonus program for performance and each member will quickly let the management know when xyz is not pulling his/her load. With their input, we move just as quickly to adjust one's compensation down and demotions happen in their levels of responsibility.

The compensation program remains difficult for those managers/Department Heads that have not heard me, and ever year it is a struggle to get beyond the evals and increases and who got what increase.

Hope this helps! PORK

blw · October 2003

Judy,
Have the managers & supervisors had the chance to give input into the change. It can be much harder on them if all their evals are done at one time. We changed this year from all being done in December to all of them done on anniversary dates. Supervisors were pleased they are spread out over the year.

Some people get increases at 90 days - the introductory period, but all other increases are effective January 1st with the beginning of the next year's budget.

Good Luck, Barbara

Evaluations and salary increases

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