Quentin Kowalski· Head of Reward, Calibre Software
Asked in Compensation ·
Our guideline is 8–12% for a one-grade promotion. I work for a pharmaceutical distributor in the US with about 3,400 employees and 15% midpoint progression.
The trouble is where people start from. Someone at 110% compa-ratio in the old grade gets 10% and lands comfortably. Someone at 85% gets the same 10% and lands below the new range minimum, so we top them up, and they still end up 20 points behind peers at the same level.
Is anyone using a target position in the new range, with the percentage being whatever it takes, and how do you keep the cost under control?
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Accepted answer· by Elif Lindqvist
We use the greater of 8% or the amount needed to reach 90% compa-ratio in the new grade, capped at 20%. Anything that would need more than 20% is paid in two steps, six months apart. Average promotion increase went from 9.6% to 11.4%, so budget for it. The effect on internal equity was worth it. The spread of compa-ratios among newly promoted people narrowed from 30 points to about 12.
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