Compensation is an essential component of employee satisfaction and employee retention. As a manager, it’s important to understand different aspects of compensation for both incoming and existing employees. The tips and explanations below will help set you up for success.
To start, the state implemented a new pay structure in October 2022, which focuses on balancing external competitiveness with internal equity. The new pay plan utilizes salary grades to identify the appropriate range for each of the state’s job classifications. You can find more information about these classifications, salary grades and more at the INSPD Compensation webpage.
Compensation for prospective employees
When extending a contingent offer, these are some guidelines to keep in mind:
Compare with similarly situated employees and consider all the factors. Not only should a salary offer fall within the classification's salary range, but it should also be equitable to other employees within the same classification and within the agency as a whole. You can start by comparing the candidate to similarly situated employees within the same department. If the candidate has similar experience compared to a current employee in a similar position, it may be appropriate to offer a similar salary. Consider additional factors like the candidate's education, training, certifications, skills, etc. Compare these factors to other similarly situated employees and include the comparison in your detailed justification.
Make sure an equity analysis is performed for all hires. Under the State of Indiana’s former salary policies, current employees who were promoted or demoted typically received a 9% or 15% pay change. As of February 1, 2024, this is no longer our policy. Instead, there should be an equity analysis and a discussion with HR for any existing employee who is promoted, demoted or laterally transferred to another position to determine a new salary that is equitable and appropriate.
Seek guidance from your HR representative(s) and confirm your budget. If there aren’t any similarly situated employees you can compare your candidate to, or if you’re not sure how to conduct a comparison, reach out to your HR representative for support. They may also partner with INSPD Compensation for further analysis. Following the equity analysis, your HR representative will recommend an appropriate offer salary for your candidate. However, if your agency/division/program doesn’t have the budget for their suggestion, you may need to consider a lesser amount.
Use your resources. You can view salaries for similarly classified employees with the Transparency Portal and find resumes for candidates and many current employees with the Recruiting module in SuccessFactors. The compensation calculator is also a great tool to share with prospective employees so they can see the full value of their compensation package.
Changes to compensation for existing employees
If an employee has taken on extra responsibilities that don’t warrant a change in job classification, a salary increase may be appropriate. You and the employee will work with your HR representative to ensure that documentation like the employee’s current resume, a current job description, a detailed justification for the salary change, etc. is collected. Based on the percent increase, there may be additional steps for approval and additional documents required.
Salary adjustments may also be requested to address a change in market conditions, internal equity, or salary compression of an employee or a group of similarly classified employees. In these situations, you should consult with your HR representative to determine if an equity analysis and potential salary adjustments may be warranted.
Frequently Asked Questions
Q: Can/should we negotiate with a candidate if they make a counteroffer?
A: Each situation is unique and depends on the candidate, their qualifications, the position’s classification and the current employees in that classification. If the counteroffer doesn’t seem unreasonable, consult with your HR representative to see if the amount can be considered without creating inequity among current staff. Use your best judgment when deciding if the counteroffer is “unreasonable” or not.
Q: How many years of experience does a candidate need to have in order to offer them a salary at or above the midpoint?A: Because determining an equitable salary depends on several factors, there’s not a standard set of criteria that determines when it’s appropriate for an offer to reach the midpoint of the range. Ultimately, the salary offered to the candidate should be equitable when compared to similarly situated employees within the same classification.
Q: Aside from receiving an offer approval in SuccessFactors, are there any other approvals needed to make an above-minimum offer?A: Many agencies do have internal review processes for above-minimum salaries, promotions/demotions, salary adjustments, policy exceptions, etc. If you have questions about your agency’s internal approval processes, please connect with your HR team.
Q: What is the CCR?A: CCR stands for Compensation and Classification Review and it’s a process where representatives from agencies like INSPD and the State Budget Agency manage and review requests for new positions, pay plan changes, etc. This review process is only required for some compensation-related requests.
Q: What information should be included in a salary justification?A: A well-written salary justification will generally include the following details:
- Agency
- Candidate’s name
- If the candidate is a current or former State employee, this should also be indicated
- Title of the position being hired for
- Requested salary
- Summary of relevant qualifications (e.g., education, experience, training, certifications, etc.)
- Rationale for why the candidate was selected
- Equity analysis information (HR may assist you with this, if needed)
- Details of 1-3 similarly situated employees, describing their salaries and qualifications as compared to the candidate’s
- If the candidate is a current state employee, also include:
- Their current salary, position, salary grade and agency
- Whether the requested transfer is a promotion, demotion or lateral transfer per policy
- The percentage of salary change being requested
Q: How long does it take to get an Above Minimum salary request approved?A: Your HR representative will submit the Above Minimum new hire request for formal approval once an equitable salary has been determined. Offers that are less than or equal to the 25th percentile of the classification’s salary range only require INSPD Compensation approval and are generally completed within 1-2 days. Offers that are greater than the 25th percentile require a second approval by an SBA Budget Analyst and may take an extra 1-2 days for completion. These timeframes aren’t guaranteed, and don’t include time for pre-work like equity analyses, internal agency approvals, obtaining a Budget Impact Statement (BIS), etc. Requests for an Executive Hire will require additional review and approval.
Q: Can we pay a candidate more for being bilingual? What about for being a Working Leader?A: An employee using bilingual skills for 50% or more of their daily essential duties in a position where being bilingual is preferred may be offered an additional 5% compensation, subject to the approval of an INSPD Compensation Consultant.
Employees designated as Working Leaders also receive an additional 5% compensation. However, the position must meet the Working Leader Guidelines to qualify.
Q: Where can I find the compensation policies?A: Visit www.in.gov/spd/compensation to review the Compensation Policy, the Classification Plan and Position Management Policy, and lists of all current job classifications and pay plans/salary grades.
If you have any additional questions about compensation, please reach out to your agency’s HR representative.