Salary Matrix: Pay Transparency in a Small and Midsize Firm

How to Build a System and Culture Around Pay Transparency

Posted on Jun 16, 2022

Sharing Growth Pains

In a rapidly expanding and highly competitive consulting firm, a major challenge emerged: structuring a fair salary system and creating a clear framework for job skills and competencies.

After eight years in the industry, the company found itself dealing with a significant issue. Office politics and conflicts between employees at similar job levels were causing problems. As the company grew, diversified its roles, and introduced a more complex hierarchy, it struggled to ensure fair compensation and define the skills needed for each role. In the past, some employees had the ability to negotiate their pay, often leading to unequal pay for individuals with different levels of skill and experience, which left some employees feeling left behind.

What They Asked

    Our client was looking to have a salary pay structure that can tie together compensation and benefits with job duties and competencies. The organization also wanted to build transparency among various roles and their compensation so they could avoid politics and friction in the workplace and focus more on the sustainability of their business.

    It is crucial either to separate performance from the salary range or assign minimal weight to performance ratings when calculating salaries.

What We Offered

    1) Pay Transparency System

    To fulfill our client’s needs, we took the following approach:

    • Competencies: A competency architecture for each possible role in the organization was created in consultation with senior management and team members.
    • Growth Trajectory: Competency Structure was run parallel to the creation of a Growth Trajectory for each competency and each job role.
    • Company Budgets: A range of salaries was defined to align with the company's budget for payroll expenditures as well as market value.
    • Variables: A formula for the matrix considered the following variables:
      • Department
      • Position Level
      • Performance Rating

      2) Pay Transparency Culture

    We offered comprehensive training and facilitated open conversations, creating spaces for meaningful dialogues within the company to initiate the development of a culture centred on pay transparency. Through our efforts, we equipped the team with the knowledge they need to understand their responsibilities in this regard and encouraged them to contribute to the success of a fair and equitable workforce by shifting their mindset and transforming their everyday conversations

    Norm Building: Established norms and guidelines for shaping the company's approach to pay transparency, fostering a culture of openness and equity.
    Obligations Awareness: Ensured that all team members are aware of their responsibilities regarding pay transparency, clarifying their roles in maintaining fairness.
    Acceptable Behaviors: Defined clear parameters for acceptable behaviors and communication, promoting respectful and inclusive interactions within the organization.
    Unacceptable Behaviors: Identified and addressed unacceptable behaviors, setting boundaries to eliminate any actions that hinder the establishment of a transparent and equitable workforce.

    Continued Partnership

    This company maintains an ongoing partnership with us as their preferred associates for matters concerning their workforce and organizational culture. Our collaborative approach, engaging both management and employees, enabled us to establish an equitable salary framework devoid of any influence from bias or workplace politics. Moreover, thanks to our team of certified coaches and consultants, we successfully fostered transparency without unforeseen repercussions, while also providing employees with the necessary guidance to advance in their careers and enhance their compensation prospects.

    Are you also looking for a salary matrix and a growth plan that matches both your people and your business operations?