Wren Zhang· Job Architecture Lead, Silverline Media
Asked in Pay Equity & Transparency ·
I run compensation for a hospital group in Colorado, about 6,800 employees. Our analysis this year flagged 190 people, across nursing, allied health and corporate roles, whose pay sits below what the model predicts by more than our tolerance. Cost to correct is around 1.1 million dollars, roughly 0.25% of base payroll.
Finance will support it if it comes out of the 3.5% merit budget. I think that defeats the purpose, because managers will then fund equity fixes by giving less to everyone else, and the people flagged will be told their correction is their merit increase.
How have others structured this so the money is approved and stays separate?
9 helpful · 5 insightful · 2 agree · 5 replies · 619 views · 9 following
Accepted answer· by Zoe Bergström
We got a separate pot approved by changing what we asked for. Instead of a one-off 1.4 million, we asked for a standing line of 0.2% of base payroll, held centrally, released by compensation and not by managers, effective on a different date from merit. Ours go in on 1 October; merit is 1 April. Finance were comfortable because unspent money returns to them, and because after the initial correction the annual need fell to about 0.08%. The separate date matters as much as the budget. The employee gets a letter that says this is a correction, not a reward, and the manager has nothing to trade it against.
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Director, Total Rewards, Halcyon Financial Group
We lost that argument in year one and it went exactly as you fear. Managers treated the adjustment as the raise, and several flagged employees ended up with a correction and a zero merit award. The gap reappeared within two cycles. Do not fold it in.
Total Rewards Manager, Larkspur Manufacturing
Accepted answer
We got a separate pot approved by changing what we asked for. Instead of a one-off 1.4 million, we asked for a standing line of 0.2% of base payroll, held centrally, released by compensation and not by managers, effective on a different date from merit. Ours go in on 1 October; merit is 1 April.
Finance were comfortable because unspent money returns to them, and because after the initial correction the annual need fell to about 0.08%.
The separate date matters as much as the budget. The employee gets a letter that says this is a correction, not a reward, and the manager has nothing to trade it against.
Compensation Consultant, Independent
In a unionised setting check what your agreements say before you pick a date or a mechanism. Our nursing contract in the Pacific Northwest required us to bargain the correction method, which added four months. We took counsel's advice on that and I would not have guessed it.
Amara SilvaCRP
Sales Compensation Manager, Ravenna Chemicals
Different view: we do fold it in, but as a ring-fenced first call on the budget. Compensation loads the corrections before managers see their pot, so the manager's allocation is already net and they cannot touch the equity money. It is less clean than a separate date, but our finance team would never have approved a second cycle.
Benefits Manager, Steinbach Industrie
Going with the standing line and an October effective date. I took the 0.2% framing to our finance lead on Thursday and the conversation was completely different from the one about a 1.1 million one-off. We will check the bargaining point for the two represented units before anything is announced.
