Honeywell is one company, but it is made up of many different businesses.
These businesses are united by a common set of values and common technologies.
Businesses differ on the other hand in respect to their products, size, customers, locations, and competitors.
Honeywell's management and pay philosophies reflect who we are, our unity, and our diversity.
Decisions that affect the company as a whole are made at the corporate level, but decisions that affect individual businesses such as decisions about pay are made at the business level.
Business decisions are based on objectives and values common to the company and on the requirements of each business.
This ensures that these decisions reflect both Honeywell's identity and individual business interests.
Honeywell has an ongoing corporate goal to be a leading multinational high technology and services firm.
A high quality workforce is Honeywell's best resource in meeting this goal.
Honeywell's pay philosophy is a key factor in maintaining the quality of the company's workforce in support of this goal.
Under this philosophy, Honeywell has established four basic pay objectives.
All Honeywell pay systems are designed to achieve these objectives.
To attract the best person available for each Honeywell job.
To encourage your growth both as an individual and as a participant on your work team.
To recognize the importance of high quality work performance and to reward it accordingly.
And to encourage you to make a career -long commitment to Honeywell.
Each business establishes and maintains its own pay system based on these objectives.
In addition, four basic principles apply to all Honeywell pay systems in support of these objectives.
First, your pay must be fully competitive in the market as defined by your business.
Second, your pay must be fair with respect to the pay other employees receive at your Honeywell business.
Third, your pay must be communicated to you, including general principles, the specific system that applies to you, and the process under which your own pay is determined within that system.
The fourth principle is that basic responsibility for establishing and maintaining your pay system must rest with your Honeywell business.
In all pay systems, basic pay levels must be set.
A variety of methods is available.
Market pay, the cost of doing business, ability to pay, or changes in the cost of living are examples of different ways pay levels can be determined.
The particular method used at Honeywell must support the company's goals of being a financially sound company and of attracting and retaining high quality people.
To be financially sound, the company must price its products competitively.
To attract and retain high quality people, the company must pay competitively, that is at levels that are the same as or higher than other companies pay levels.
Honeywell has chosen the market as the method that best meets both these goals.
Your Honeywell business looks at the market, that is pay levels at other companies, then sets its own pay at levels that are the same as or higher than these.
The market method of setting basic pay levels offers the best balance between company and employee needs.
The company is assured of having labor costs that are similar to other companies labor costs.
This enables your Honeywell business to competitively and maintain its sound financial position.
At the same time, you are assured of receiving pay that is fully competitive with the pay you can receive elsewhere.
A frequent question is whether pay set in this manner keeps pace with the cost of living.
Cost of living is only one of several factors that affect the market.
Market pay levels also respond to the demand for people in a certain field and the supply of people available to fill that demand.
Market pay varies too, depending on the general economic situation which affects companies ability to pay.
Because market pay levels reflect a number of factors, market pay may rise at the same or a different rate than the cost of living.
Nevertheless, basing pay on the market remains the best way to balance long -term company and employee needs.
The company is assured of being able to maintain its sound financial position and this is important for your job security.
At the same time, you are assured of receiving fully competitive pay.
Honeywell is a market driven company.
Let's take a closer look at what the term market means.
The responsibility for defining market rests with your Honeywell business.
In defining this term, your Honeywell business looks at leading companies.
That is, companies that have recognized leadership in their fields.
We want to compare ourselves with the best companies we can.
These companies may compete with your Honeywell business for employees or for customers.
The companies may be national, regional, local, or a mixture, whichever is appropriate.
From these companies, your business chooses a select group.
This select group of leading companies is your business's market.
Pay for jobs at your business is set at levels that are at or above pay for the same job at other companies in this select market.
Your business may define several different markets for different groups of employees.
For example, a business may compete with leading local companies for office workers but on a national basis for engineers.
Remember that the responsibility for defining the market or markets rests with individual Honeywell businesses.
This means that businesses markets may be different even if the businesses are located in the same geographical area.
Take two different Honeywell businesses that are in the same city, for example.
These businesses have different products, customers, and competitors.
So these two businesses may define their markets differently.
They may make comparisons for pay purposes with different groups of leading companies.
In addition to considering the market, all Honeywell pay systems are based on a second principle.
It is to make sure your pay is fair with respect to the pay of other employees in your Honeywell business.
One and sometimes two steps are taken to assure you of receiving fair pay.
The first step is to evaluate your job in relationship to other jobs in your Honeywell business.
Jobs are objectively assessed based on the tasks and responsibilities they involve and then assigned a ranking.
All jobs with the same ranking are paid at the same rate or if a range of pay is provided all jobs with the same ranking are assigned to the same pay range.
So you are assured of receiving pay at the same rates as other people whose jobs have the same ranking as your job.
There is a second step in determining fair pay in any job where performance differences are measured.
Honeywell wants to attract employees who prefer to work in a performance -oriented environment.
Therefore, performance quality is an important factor in determining pay in any job at Honeywell where performance differences are objectively measured.
Employees whose performance meets higher standards will advance through their pay rapidly or will be paid at a higher level in their range than others.
So as a Honeywell employee you are assured of receiving competitive pay in your business's market and fair pay with respect to other Honeywell employees.
The third principle that applies to all Honeywell pay systems is that they be effectively communicated.
It is important that you understand your pay.
Honeywell as a company is committed to communicating both the basic principles on which all pay systems are based and the details of the pay system that apply to you.
Your supervisor has some additional communication responsibilities.
Your supervisor is charged with communicating the company's expectations for your performance and the criteria under which your performance will be judged.
Your supervisor is also expected to review your performance with you from time to time.
Pay that is competitive within your market, fair with respect to the pay for other jobs in your Honeywell business, responsive to the quality of job performance, and communicated to you.
These basic principles are the foundation on which every Honeywell pay system is based.
Within this framework your business has the responsibility for establishing and maintaining a system that is appropriate in its own business environment.
Your Honeywell business defines the market in which pay will be compared and establishes pay rates based on this market and on job comparisons within the business.
Your Honeywell business decides on performance criteria and communicates your pay system and your relationship to this system to you.
By following basic principles while being tailored to fit each business's own environment, your pay system assures you of being paid fairly and in a way that recognizes your contributions and encourages career orientation while meeting Honeywell's goal of being a leading multinational high technology and services firm.
That's Honeywell's pay philosophy.
