When They Wear Two Hats, How Do You Decide Pay?

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Jul 24, 2018

The competitive market pricing of jobs for an organization is relatively straightforward when looking at common benchmark roles – the ones that you can find in almost any organization. Administrative assistants, financial analysts, receptionists, help desk technicians, coordinators, etc. are easy to locate within commercial surveys, so their comparative market value can be collected without much fuss or muss.

But what if the job you’re reviewing isn’t so cut and dried? What if the organization has combined two benchmarks jobs into the one that you have to price? What if the job has finance and human resources responsibilities, or marketing and sales, or manufacturing and quality control?

What if your survey sources don’t report the job at all?

Dual hat jobs

In smaller organizations, it’s not uncommon for some employees to wear more than one hat, to blend responsibilities between more than one traditional role. The staff is small so incumbent responsibilities are stretched, some roles may be minor add-ons to the prime role, or outlier tasks that don’t warrant a full-time employee, so someone gets “tagged,” as in “You handle that whenever an issue arises.”

Unfortunately, your commercial compensation surveys will not be reporting these types of jobs. You’ll not find dual responsibility roles on the job list. The vendor’s view is that the job is “neither fish nor fowl” but something in between, and they typically don’t report in-between jobs. They will say to you, in effect, pick one.

The trouble is, of course, is that certain dual roles and responsibilities will still “fit” within your organization, whether surveys acknowledge an external market value or not. If dual, or even triple hat responsibilities make sense within your organization, you’ll still need to gauge the market value. Somehow.

Valuing these multi-role jobs

For some managers, the market value of a dual hat job is considered greater than the value of a single benchmark job because of those dual responsibilities, as if the employee is performing two jobs.  Their thinking often runs along the lines of, “Let’s find the two (or more) distinct roles in the survey and average the data points.” That, of course, presumes that one role is not valued significantly larger or smaller than the other.

However, what these advocates may fail to consider is that each supposed “job” is only a part-time effort for the employee. Each of the multiple hat roles is not significant enough by itself to be full time, while surveys report on those who have this element as their sole responsibility – not a partial effort.  This tends to inflate the internal impact of each disparate role.

Personally, I like to use the 70-30 rule, in that I would match the predominant role performed within a dual hat job. It’s not perfect, and of course won’t be a 100% match to the incumbent’s role, but we’re not going to find incumbents out there that do match our mixed-use, dual hat jobs. And I have always been uncomfortable with formulaic approaches to defining the “market,” so applying such a formula to a 70-30, 60-40 or other combination would merely give us an arithmetic answer. Which is more “made up” than I’d advise using.

Final thought: Always remain sensitive to the fact that external market rates can be different from perceived internal values within your organization, so there is nothing inherently wrong with providing compensation levels to employees that are higher or even lower than what the “market” shows. Survey sources should be used as information to aid in your decision-making, not as a rule or a pointed finger that you must obey.

This was originally published at Compensation Café.