pay-pool-organization-tavfinal by fjzhxb

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									TA B L E

PAY

POOL

ORGANIZATION

At the beginning of the Plan phase, one of the pay pool manager’s responsibilities is to structure the pay pool or confirm that the previous year’s structure is effective for determining performance-based payouts. There is no single “right” way to organize pay pools; it depends on the needs, size, and structure of your organization. The NSPS Implementing Issuance SC1940.11.1.1 states, “Criteria to distinguish pay pools may include, but are not limited to, organization structure, employee job function, location, and/or organization mission.” The following table summarizes the benefits and drawbacks for some of the more frequently used models, and it can help you analyze the options as you decide on the best approach to use in your organization. These are examples only and should be adapted to fit your organization’s needs.
Type of Pay Pool Organization Organization Description Follows the chain-ofcommand for employees, grouping them under direct supervisors. Each pay pool (or sub-pay pool) consists of a limited number of supervisors and the employees that report to them. Groups employees by what they do, instead of where they fall in the organization. Pay (or sub-pay) pools consist of employees who shares similar job functions.
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Benefits Works well in a hierarchical organization Works well with chain-of-command Communication flow is already established Tends to be more readily accepted and understood by employees
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Drawbacks A supervisor further up in the chain-of-command may not be aware of employee contributions and performance. Employees with differing skill sets, job duties, pay bands, and salaries are reconciled together.

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Function

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Pay pool panel members are more familiar with the job duties and skill set of the employees. Employees with similar job duties and skill sets are reconciled together.

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The hierarchy and supervisory structure is more complicated. Pay (or sub-pay) pool panel members may be required to serve on multiple sub-pay pools based on the functions in their branch or division. Both the direct supervisor and the functional lead share responsibility for management of the employee. Employees with differing job roles or functions are reviewed in the same pay pool. Some regions may be smaller than others resulting in unbalanced subpay pools or some sub-pay pools that consist of a combination of regions. May result in lopsided structure, with one large pay (or sub-pay) pool and one or more smaller pay (or sub-pay) pools, leading to a potentially unbalanced workload for pay pool panel members Only appropriate for organizations with enough levels of supervision to allow for performance evaluation review beyond the immediate supervisor level (for both the supervisor and non-supervisor pay pools)

Geographic

Allows for geographicallydispersed organizations to form pay pools within their geographic area. Employees and supervisors are grouped based on location.

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Works well for geographically-dispersed organizations May decrease travel and coordination needs when conducting pay pool panel meetings

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Supervisor/ Non-Supervisor

Allows for employees to be grouped based on whether or not they have supervisory responsibilities. Supervisors across the organization are grouped together. Non-supervisory employees across the organization are grouped together. The next higher level of supervisors may act as the pay pool panel members. Groups employees together with others in the same pay bands. Pay (or sub-pay) pool panel members can either be from the next higher pay band or the supervisory level of the organization.

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Pay pool panel members can narrow their focus to a more limited set of relevant Performance Indicators and Contributing Factor benchmarks. Employees are reconciled with others of similar job duties and expectations. Supervisors are not part of the same pay pool as their employees, avoiding conflict of interest. Supervisory pay pools composed of supervisors from various subdivisions of an Activity provide the opportunity for increased communication and organizational knowledge exchange by the second-level supervisors, especially during pay pool panel meetings. Pay pool panel members can narrow their focus to a more limited set of relevant Performance Indicators and Contributing Factor benchmarks. Employees with similar salaries and expectations are reconciled together. Supervisors are not part of the same pay pool as their employees, avoiding conflicts of interest. Lower level supervisors may gain leadership skills in serving as sub-pay pool panel members.

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Pay Band

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Supervisors might not be pay (or sub-pay) pool panel members for the lower pay bands.

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SPRING 2009

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