How To Maximize Your Compensation

by Mae Lon Ding, President of Personnely Systems Associates, Inc.

Pay is based on

1. the required knowledge, skill, and responsibilities of a position
2. the qualifications and performance of the job incumbent
3. the profitability of the industry you work in
4. the profitability of the company you work in
5. the perceived importance of the training function in achieving organizational objectives in the eyes of top management
6. the geographic location of the job

In order to maximizing your pay you need to carefully pick the company you work for, plan your career and prepare, pay attention to compensation administration issues, and sell yourself.

Carefully Pick the Company You Work For.

In order to maximize pay you should try to work in the most profitable industries such as the oil industry, work for the most profitable and fastest growing company in your industry, work for a company where top management believes that the human resource management function has high strategic importance (on par with finance) to the success of the organization, work in a large city with high cost of living such as New York, Los Angeles, and San Francisco. In addition, managers almost always get paid more than their subordinates, and managing a large department usually pays better than managing a small department. Organizational change responsibilities of broad scope of impact on the organization usually pay better than skills training which is narrower in scope.

Plan Your Career and Prepare.

Recently, an editor at Training Magazine asked me to explain the reasons for compensation differences between jobs in the training and organizational development field. In their annual compensation survey, jobs like “Outside Consultants”, “Instructional Designers”, “Line/Staff Manager other than HRD”, and “Organizational Development Specialists” are paid more than people in jobs like “Personnel Manager/Specialists”, “Classroom Instructor”, ” and “Trainers in one person training departments”. This is because the higher paid jobs have one or more of the following knowledge, skills, and responsibilities that set them above other positions:

1. Job requires advanced degree, or incumbent holds advanced degree in industrial psychology, organizational development, instructional technology or similar area body of knowledge (preferably from a top tier university).
2. Responsibility for managing larger size of budget and greater number of people
3. Responsible for significant revenue generation (e.g. outside consultants)
4. Possess skills which are less commonly found in their profession
5. Possess significant experience in line or staff area outside of Human Resources Delopment where wages for similar level of education and experience are higher on average (for example a Sales Manager responsible for $50 Million Dollars in annual sales who becomes the Sales Training Manager).

Thus, the trainer currently in a lesser paid position can advance his/her pay by obtaining the education, responsibility, skills, and experience discussed above. These same concepts apply to other professions as well.

Pay Attention to Compensation Administration Issues.

Sometimes a company values a job incorrectly because the job description is poor. The trainer should look into how the job description has been written for the position. Most companies base the formal salary range for a job on the job description. Make sure the description is accurate, complete, and fully describes the complexity of the job, the managerial scope of the position, the impact of the job on company success, the knowledge/skills/education required to perform the job. A poor job description can lead to a lower pay range. If there are significant changes in the job description, resubmit it to the compensation department for re-evaluation.

You should also review where you are paid in the formal salary range set for your job. The midpoint of the salary range usually represents the level at which a company wants to pay people who fully meet expectations and have been working in that job for 4-6 years. Employees paid above the midpoint usually are outstanding performers and/or have significantly longer time in the job.

Sell Yourself.

Finally, it is important to educate management about how your function can help the company to make more money, save money, improve quality, improve service, and improve productivity. In order to have credibility you must demonstrate that you really understand the business objectives, operations, and cost concerns. Then gather and present objective data on the impact and return on investment of your efforts as well as results achieved by other organizations. Measure your results and feedback the financial impact of your efforts to top management. Doing your homework and “selling” your function will help you to persuasively demonstrate the value you bring to the organization.