How to Price Those Unique Multi-Role Jobs

How to Price Those Unique Multi-Role Jobs

How do you pay a unique and multi-role job? That is one of the biggest challenges that faces a company when it comes to the equity and effectiveness of its compensation practices.

But first, what type of job are we talking about? We see these in the real world all of the time. They are those unique jobs filled by one person who will often tell you they are wearing “two hats.” For example, I have seen an executive fill the jobs of both top sales officer and top engineering officer for a manufacturing firm. Or in a lower-level job, a single incumbent was both warehouse manager and also purchasing agent. But, do not confuse these with a senior job where multiple functions generally report—like a chief operating officer or top logistics officer. Those are single-task jobs.

Multi-role jobs are common in smaller companies where the firm may not have the critical mass to have two discrete executives or managers to fill as many important jobs, and assigns second-job tasks to someone with available time or who has the knack (or desire) to do the second job. Notice we are using the terms “first” and “second” jobs here.

These are also often seen in family-run firms and are frequently used with family members to create a job of some importance (and perceived value) while a family member is being mentored or learning the ropes of the business (under close oversight), or both. Of course, sometimes, a job is created for a family member that is an eclectic collection of tasks that adds up to something perceived to be enough to keep them busy or interested.

We often come across these types of situations when approached by a client to determine company and job pay competiveness for both salary and annual incentives. So how should determining the right pay practice for these unique jobs be approached?

  1. First, you want to determine what the incumbent really does. What is on their business card and what they actually do can be quite different. Also, their definition of the job (say CFO) can be quite different from that of the rest of industry. Usually, an hour of talking with the incumbent will give you a true picture of the job—title aside.
  2. Second and in concert with the first above step, find out where they spend their time. This will tell you what the first (primary) job actually is. Do not fall into the trap of going along with the argument that one person can completely do two real jobs. Generally without exception, one of the two jobs will get short shrift. Be sure to find out which one it is.
  3. Then, determine the market pay for their first job, or the one they actually do. We have discussed this process in the past, but generally we suggest two approaches: A) using title matching versus market data or B) a reliable guide chart profile method of job sizing (and market data linked to the profiling method used). Both are reliable and the data is readily available for both salary and annual incentive. By the way, you will find that in about a third of the cases the incumbent will suggest that because they wear “two hats” they should be paid the salary (and bonus) of both of the two jobs they fill combined. I generally reserve a broad smile and a hearty laugh for such debates. They always lose.
  4. Also be prepared to consider another pay strategy. I have seen truly conscientious executives who really try their best to do two jobs when there is no alternative to the situation. In such a case, you might consider adding an extra 10-15% to the salary when no salary premium exists. But a better solution is to make an upward adjustment in any annual incentive or bonus payment as recognition. But watch out for these true overachievers burning themselves out in the name of the company & loyalty.

If you are analyzing such a “two-hat” job, you can provide your CEO with some organizational advice along with your pay recommendations. If you observe that one of the two real jobs is not getting the attention it requires you should tell the CEO.  Further, if someone is over their head in either or both jobs, a gentle nudge to the top executive will likely be much appreciated.

Do you have executives or managers on your team that wear two hats? Do you know what they really do, and the basis for their current pay? If you do not know, you should.

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