How to Price Comp When the Employee Wears Multiple Hats

Article main image
Jul 6, 2017

In a variety of settings and for a variety of reasons, we see jobs that are essentially hybrids; that is, they cover a combination of functions that are more typically found on a stand-alone basis:

  • The nursing director who also serves as director of volunteers.
  • The professional who splits her time between purchasing and inventory control.
  • The bookkeeper who also has responsibility for sitting at the reception desk for two hours every day.

Market pricing jobs like these – going out to compensation surveys to find comparable jobs in order to collect competitive pay information – can be a real challenge. My experience suggests  there isn’t one best approach to doing this, but that there are a few methods to consider. The trick, I believe, is matching the approach to the particular talent scenario you are facing.

Proportional split

The most common approach to a “mixed bag” job is what I will call the “proportional split.” This involves identifying job matches and collecting survey pay data for each function, and then giving the data for each function a weight that reflects the proportion of time spent on that function. If an employee spends 75% of her time doing inventory control and 25% of her time on purchasing responsibilities, the survey data for these two functions would be weighted accordingly.

This proportional split approach is best suited to situations where there isn’t much disparity in value or skill level being straddled, where the functional areas being combined are more closely related. A combination of compensation and benefits work probably fits this criteria; a combination of compensation and software development, not so much.

Unrelated job tasks are a different case

Often these “mixed bag” positions involve a job which requires a specialized skill set; say, a seasoned chemical engineer who also has the additional responsibility for performing another important but less specialized role, such as supervising a small group of hourly manufacturing employees. The proportional split approach is problematic here, where its outcome would be a compromise between the value of an experienced chemical engineer and the value of a plant foreman. If the going rate for an experienced chemical engineer is higher, as I suspect it would be, you can’t ding the value of this role because you’ve added an another set of responsibilities into the mix. In fact, there are those who would argue (and have) that you’d need to pay a premium in order to get a chemical engineer to also spend time supervising non-engineering workers.

When multiple hats are worn

In some cases, a job can be a combination of several positions that can only be market priced separately and on their own. And it may be that giving the job credit for the highest valued of these different roles doesn’t really do justice to the complexity involved in overseeing multiple discrete functional areas.

I can recall one particularly odd combination of a manager who oversaw accounting, purchasing and customer service. Separately, these managerial jobs were market priced at about the same level – but that didn’t do justice to this unique role, so we ended up adding a premium of 12% (essentially this organization’s midpoint differential – or differential between salary grades – kind of a “one up” adjustment) to the overall market value in order to account for the added complexity of this particular combination of responsibilities.

When market pricing is more ‘art’

This, of course, is where market pricing stops being strictly a science and crosses into the realm of art. And while we may prefer dealing in situations where we simply add up the numbers to get the right answer, we can also count on the fact that organizational needs and circumstances will throw us the inevitable curve ball. Rising to these occasions requires combining our best data analysis with sound business judgment to identify the approach which is fair and appropriate for the organization and the employee.

This article is republished from Compensation Force.