Should CIOs get involved in determining how much employees get paid?

Should CIOs get involved in determining how much employees get paid?
Image Credit: 401(K) 2012

Psst – would you like to know a secret? It turns out that at most companies, how much any given employee gets paid is determined more by art than science. Yes, that’s right – most firms (and their IT departments) are making this stuff up on the fly. When you decide that that data scientist needs to be added to your team, nobody really has a clue what you should be paying him or her. Perhaps it’s time for the CIO to step in and create some structure to this task.

Why Should Companies Take A Look At What They Are Paying Employees?

A survey of over 7,000 firms was conducted just a while ago asking them about how they determined what salaries to pay their employees. The results were quite startling. It turns out that only 38% of companies have a formal philosophy or formal compensation structure that they use to determine what to pay their employees. There are lots of different types of jobs at each company. Salaried roles have the greatest variability because the hiring managers have the greatest amount of say in what an employee gets paid.

What a company decides to pay an employee can depend on a number of different factors. These factors can include the employee’s skill, their experience, and their performance. Because of the importance of information technology, more and more people with the CIO job are starting to take a closer look at how their company is handling salaries. The reasons for this closer look are many and varied: the job market is improving, fair-pay laws are being put in place in states like California, etc. What the survey also found out was that among firms that had no formal method of determining salaries, 34% are in the process of developing one.

A key motivation for the person in the CIO position to make changes to the way that his or her company handles salaries has to do with trust. CIOs realize that deep down, their employees do want to trust the company that they work for. They want to believe that at the company there is somebody somewhere who is looking out for that employee’s best interests. If a company is making pay decisions based on gut instincts, then it is all too easy for gender bias and other issues to creep in.

What Is The Correct Way To Set Salaries?

Given that the way that a lot of companies are coming up with salaries is probably wrong, what is the right way to go about doing this task? One thing that an IT department can do is to take the time to review the salaries of its workers regularly in order to excise any gender disparities. The goal of any IT department should be to take the mystery out of salaries for its workers.

At many companies, the way that the salary for a given job is determined is based on what the company was paying the last person who had the job. What many companies try to do is to pay at the 50th percentile level for a job with a spread of 20% on either side in order to account for a worker’s skills and experience.

In order to be able to do this, a company needs to have access to a source of outside pay data. The CIO’s goal needs to be to make the company’s pay system make sense to its employees. CIOs do need to be careful here, this all comes back to a question about how much transparency a company wants to allow into its salary system.

What All Of This Means For You

As CIO you are responsible for a department of people who are being paid to work for your company. However, you need to determine if they are being paid the right amounts – not too much and not too little. At most companies there is no fixed way to determine salaries and instead we go on our gut feelings. CIOs need to fix this situation.

Most companies are lacking a formal compensation structure and this especially shows when they are hiring for a salaried position. As the job market is improving and with the arrival of fair-pay laws, CIOs are now taking a closer look at how the company assigns salaries. The goal needs to get the employees to trust that the company’s salaries are fair. In order to make this happen, a company should review all of its salaries and make sure that they are fair. Next, they need to determine how much they want to spend for each type of job that they have. This will require some level of transparency.

How much an employee is making is very important to that employee. They want to make sure that they are being paid enough for the work that they are doing and they want to make sure that everyone around them is not making more than they are. If a company can create a sensible and easy-to-follow compensation structure, then all of their employees will feel better about the amount of money that they are being paid.

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World IT Department Leadership Skills™

Question For You: Are you willing to let all of your employees know how much you are paying for each position in the IT department?

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What We’ll Be Talking About Next Time

As the person at your company who has the CIO job and who understands the importance of information technology, it turns out that you have an additional job. This is building the best IT team possible. In order to do this, you are going to have to hire some people and when you do this the odds are that you are going to have to end up paying them. This is where things start to get interesting: just exactly how much should you be paying them?

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Smartphones are useful, but just exactly how important are they?

Smartphones are useful, but just exactly how important are they?
Image Credit: Pabak Sarkar

More than one CIO that I know has become very upset when what they were saying during a meeting was interrupted by one or more mobile phones going off while they were speaking. Just to make things worse, we’ve all had that sinking feeling that we get when we are addressing a group of our workers about the importance of information technology and at least one of them has their head down and is typing furiously on their smartphone screen – clearly they are not listening to what we are saying. What’s a CIO to do in order to get some attention around here?

The Importance Of Smartphones To Your Workers

This may come as no surprise to you, but your workers view their smartphones as being a very important part of their lives. You know this because as you’ve been driving home, you’ve seen people who look like the people who work for you sitting in their cars at red lights staring at their phones – unable to be away from them for even a few minutes. It turns out that your workers are not going to be able to do good work if they can’t get to their smartphones.

A study has recently been done of 18-24 year old iPhone users. What the study discovered was that the subjects of the study performed better on a cognitive test when their iPhones were nearby – in a purse or a pocket instead of located across the room. What makes things even more interesting was that when the people participating in the study could hear their iPhones ring but they could not answer them, both their blood pressure and their heart rates increased.

The take-away from this study appears to be that as the person with the CIO job you should not be thinking that you are going to be able to keep smartphones out the meetings that you hold. Instead, you’re going to have to take a different approach. It may turn out that a better approach would be to tell your workers to bring their smartphones, but before you start your meeting request that they set them in order to reduce the possibility that they will cause a distraction.

Why Smartphones Are So Very Important

The power of a smartphone is very strong on the people that it has cast its spell on. What this means is that if you are not careful, a smartphone can be a major distraction. This can have a significant impact on how much work these workers are able to accomplish and the quality of their output. However, we also have to realize that a lot of what the smartphones are being used for is communication and this may help the flow of information within the IT department.

One of the most important insights that the person in the CIO position has to have about their staff and their relationship with their smartphones is how the staff view the phones. In some ways, the phones are serving an almost “security blanket” role in your staff’s lives. Perhaps a better way to state this is that your staff now views their smartphones as an extension of themselves. The phone is key part of how they communicate these days.

Understanding the deep relationship that your staff have formed with their smartphones is key to being a good CIO. What this means is that when you host a meeting, you need to make sure that the people who are attending do bring their phones along. This will allow them to not feel any sort of “lessening of self”. However, you need to insist that everyone keeps their phone in silent mode. What you want to make sure is that the people in your meeting are not aware that their phones may be ringing because it will end up decreasing their attention when this happens.

What All Of This Means For You

The times they are a changing for CIOs. What this means for us is that when we are meeting with the members of our team, there is a very good chance that they’ll be bringing their smartphones along. This can start to annoy us because if they ring or distract our audience, then we’ll feel as though we’re not being listened to.

A study has been done about what happens to 18-24 year olds when they have their smartphones taken away from them. It turns out that they become distracted and when they can hear them ringing, but cannot get to them, then their blood pressure and heart rates go up. What this means for you as a CIO is that you need to allow people to bring their smartphones to your meeting; however, you do have the right to require that they silence them so that they don’t become distracted if and when they ring.

Here in the 21st Century, smartphones are a double edged sword. Now that they exist and because everyone has one, we can always get in touch with members of our team no matter where they are. However, smartphones can be a powerful distraction for young people and so we need to understand that allowing them into our meetings is a good idea, but we’ll need to set some ground rules so that everyone pays attention.

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World IT Department Leadership Skills™

Question For You: If during one of your meetings, someone’s smartphone starts ringing, what is the correct response from you?

Click here to get automatic updates when The Accidental Successful CIO Blog is updated.

P.S.: Free subscriptions to The Accidental Successful CIO Newsletter are now available. Learn what you need to know to do the job. Subscribe now: Click Here!

What We’ll Be Talking About Next Time

Psst – would you like to know a secret? It turns out that at most companies, how much any given employee gets paid is determined more by art than science. Yes, that’s right – most firms (and their IT departments) are making this stuff up on the fly. When you decide that that data scientist needs to be added to your team, nobody really has a clue what you should be paying him or her. Perhaps it’s time for the CIO to step in and create some structure to this task.

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