How Do Companies Handle Pay Raises for Long-Term Employees in Unchanging Roles?

Compensation and Increment Policy for Long-term Employees

What kind of compensation and increment policy do organizations have for people who have been with the company for a long time, say for at least more than 5 years (chances that they will remain in the company until retirement being very high), but whose roles have not changed, have remained the same for all the years, and will remain the same?

For example, a Front Office Executive who is good in her role and is not willing to take up any new responsibilities, therefore, cannot be laterally moved nor could there be any further role enrichment, and additionally who may have already reached the limit of remuneration as per the market rates.

How does one determine the increase in compensation for such individuals or roles? Please do give your comments on the same.

Another way to describe "stagnant jobs" is to call them "dead-end jobs" because the nature of these roles does not allow for career progression. The job of a Front Office Executive is not considered a "dead-end job" because, with proper training and development, the role can be expanded.

In your situation, it appears that the jobholder may not be willing to take on additional responsibilities. Here are two possible options for you to consider:

1. When the job reaches the maximum of its salary range, a wage freeze comes into effect. There will be no further increments until either the job is expanded or there is an upward market movement that necessitates updating the salary structure. However, you may consider rewarding the employee with a lump-sum variable amount at year-end to acknowledge their contributions.

2. The annual increment could comprise the following components: Inflation percentage (across the board) + merit percentage (performance-driven) + market catch-up percentage. Since the jobholder is still performing satisfactorily and you wish to retain them, you might also think about adding a small loyalty component. Please ensure you calculate the figures before implementing any changes.

There is, however, a third option that requires an open mind to accept and implement:

Given that the market is recovering from a recession, consider this: With the same salary currently offered to the jobholder, you might be able to find a more competent replacement with the right attitude who is willing to learn and take on additional responsibilities. This change could significantly enhance your "Value Added per Payroll Dollar."

Regards,
Autumn Jane

Where the job roles are steady and defined, and it seems that the staff will stay until the age of retirement, you are required to do the following:

1. Explore the opportunities for job role enhancement and intelligently add planning, control, quality, and suggestions to management as an extension of the existing job role.

2. Estimate and project their leadership skills and find out the feasibility of assigning the job role to these individuals.

3. A policy could be an appraisal policy and should not solely focus on an increment policy. Increment is an outcome of appraisal, and hence, due weightage should be given to the appraisal and subsequently to the training and development of resources. How to increase the salary/wages and in what manner is a procedural part, and suitable logical assumptions should be made. For example, every increment percentage should contain a few elements, e.g.,
- Dearness%
- On-the-job performance (Technical or subject matter specific / Behavioral / Coordination and Management/achievement) %
- Outstanding achievements%
- Future job role enhancement viabilities%
- Multi-tasking capabilities%
- Make up the total % of increment
- Compare it to industry norms

If this has already been achieved, you may recommend to management the following:
- Add other benefits: Children Education / Medical Reimbursements / Dress / Mobile / Vehicle Loan / Children Marriage Support / Loans and Advances for specific purposes / Holiday Vouchers

Please let me know if you have any questions or need further clarification.

Regards