Elif Lindqvist· Director of Benefits, Bellwether Consulting
Asked in Compensation ·
About 6% of our population sits at or within 1% of range maximum. We are a utilities company in the UK with around 4,000 employees, many with long service.
Today those people get whatever takes them to the maximum and nothing else. A top-rated engineer at the ceiling received 0.4% last year while a colleague in the middle of the range got 4%. We are considering paying the difference as a non-consolidated lump sum.
For those who do this: is the lump sum the full value of the forgone increase or a share of it, is it pensionable, and did it weaken the meaning of your range maximum?
5 helpful · 1 agree · 4 replies · 100 views · 2 following
Accepted answer· by Omar Quintero
We pay the full matrix value as a lump sum, non-pensionable and not counted for overtime rates, paid in a single instalment with March salary. It is only available for the top two performance ratings. Someone meeting expectations at the maximum gets the structure movement and nothing more. It has been in place six years and the maximum has kept its meaning precisely because base pay does not move past it.
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Compensation Consultant, Cardinal Insurance
Accepted answer
We pay the full matrix value as a lump sum, non-pensionable and not counted for overtime rates, paid in a single instalment with March salary. It is only available for the top two performance ratings. Someone meeting expectations at the maximum gets the structure movement and nothing more.
It has been in place six years and the maximum has kept its meaning precisely because base pay does not move past it.
Director of Benefits, Tidewater Utilities
Ours is 50% of the forgone amount. The reasoning was that a lump sum is not repeated automatically, so paying the full value each year gives the same cash without the organisation carrying a fixed cost, and the committee wanted some visible difference from a base increase.
Samir DelaneyCBS, CEP
Senior Compensation Analyst, Silverline Media
On pension, get proper advice for your own scheme rules before deciding. In our defined benefit section the definition of pensionable pay was wide enough that we had to amend the scheme documentation before making the lump sum non-pensionable. It delayed us by a year.
Senior Compensation Analyst, Cardinal Insurance
A dissenting view. If 6% of people are at the maximum and performing well, I would first ask whether some of them are in the wrong grade. We found a fifth of ours were doing work that had grown beyond the level, and regrading was the honest answer.
