Compensation Analytics with Market Ratios
Compensation Analytics: Alignment of Incumbents within Pay Grades
Once you completed some initial compensation analyses, like looking at how your salary ranges compare to the market and, if applicable, ensuring that your company follows through and creates a history of pay for performance, you can then move on to doing an analysis of how your employees align within their pay grades. This information can highlight unusually high or low base salaries and give you the opportunity to correct them or adjust your ranges.
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Voluntary Benefits Plan
The Advantages of Offering More Voluntary Benefits
It doesn’t seem that long ago that the extent of voluntary benefits plans for employees was limited to “buying up” extra insurance on the company’s group plan, or increasing short-term (STD) or long-term disability (LTD) benefit coverage from 50 to 66 percent. In 2009, it seems like every organization is looking for ways to reduce benefits costs and voluntary benefits plans are, often, the only way to expand offerings for employees.
The easy conclusion to be made of this situation is that employers are simply unwilling to add any additional costs to their budgets. While this is certainly true, it does not make this deal automatically negative for employees.
Common Issues in Internal Pay Equity
Roadblocks to Internal Pay Equity: Two Key Issues
Most of you in HR have seen some common problems with internal pay equity. Perhaps the most common is pay compression, often resulting when the pay market requires you to hire someone new at a higher rate than your longtime employees in the same job are getting paid.
Much has been written about the most common issues in internal pay equity. So, in this blog post, I’m going to take on some of the most common issues I’ve dealt with that don’t receive attention. The hope is that the information will help you tackle these common issues in internal pay equity.
Create a History of Pay for Performance
Compensation Analysis: Create a History of Pay for Performance
In our previous discussions on compensation analytics, we discussed why taking the time to review the effects of your compensation plan is valuable to a company and, also, how to perform an analysis of your salary ranges. In this next post on compensation analytics, let’s consider the company that has made a commitment to paying for performance and see how that company can assess whether it is really doing so. Do you really have a history of pay for performance at your organization?
Definitions of Employee Classifications
Understanding Employee Classification Issues
How do you determine whether an employee is classified as full-time, part-time, or temporary? It is really up to you.
Since federal and state laws generally do not define these terms, employers usually have a lot of flexibility when categorizing employees. Employee classifications are often based on the number of hours worked and job duties performed and typically determine eligibility for benefits.
The following outlines issues you need to consider in classifying employees.
How to Conduct a Compensation Analysis
How to Conduct a Compensation Analysis and Move Salary Ranges
In a previous post we reviewed why performing compensation analytics can provide value to an organization. In this next post on compensation analytics, we’ll look at how it is used to review salary ranges.
At many companies, the assumed answer to the question, “Do our compensation ranges need adjustment?” is usually, “Yes.” Compensation ranges are often adjusted every year to match industry trends and economic ups and downs. But, is it really smart planning to assume that you need to adjust your salary ranges every year – no matter what? I suggest that a key to long-term success is stepping back and having a conversation as a company about, “Do we need to move our salary ranges this year?”
The Value of Compensation Analytics
The Value of Compensation Analytics for Top HR Professionals
Is your compensation program really doing what you want it to? You have to make time to look at the data your compensation practices are producing to find out.
There are many to-dos when an HR professional or business owner is deciding on compensation at their company. You need to set up formal ranges, put people into the ranges, complete performance reviews and much more. But, an essential area that may not receive enough attention is to step back once all of that nuts and bolts work is completed and say, “How’s it working?” That is compensation analytics and the following post provides advice on how to perform it efficiently and effectively.
HR Advice for the Lilly Ledbetter Fair Pay Act
Expert Advice on Responding to the Lilly Ledbetter Fair Pay Act of 2009
Back on January 29, 2009, President Barack Obama signed into law the “Lilly Ledbetter Fair Pay Act of 2009 (“Act”). Although signed in early 2009, its effective date was May 28, 2007. The significance of the President’s signing was that he carried through on a campaign promise and that it represented one of his first official acts after taking office.
The significance for HR professionals and business owners is that there is some work to do now to protect yourself from claims of pay discrimination. Below you will find my legal advice for getting your pay practices and documentation up to date.
Continue reading HR Advice for the Lilly Ledbetter Fair Pay Act »
HR Guide to Leadership Training and Coaching
Leadership Training for Senior Management
It’s a new week at the office. You just found out that corporate is kicking off a new leadership training and coaching program and you will be participating. You know that it never hurts to receive leadership training on how to be a better manager. But, you’re skeptical.
You’ve been through leadership training exercises before. You’ve had high hopes that the training would help you to be a better manager. But, upon returning from the training, you settled back into your usual ways. Your boss has given you specific feedback on how you need to be a better manager. And your employees would really like it if you managed them better. You really do have the desire to be a better leader but how do you make what you learn “stick” this time?
Continue reading HR Guide to Leadership Training and Coaching »
Employer Benefits for Hiring Veterans
The Employer Benefits of Hiring Veterans and Ex-Military
During the period of time when I was preparing to exit the military and re-enter the civilian workforce, I read countless articles on what to expect while entering the workforce. Resumes tips, tricks on how to put a strong spin on military skills, so forth and so on. Unfortunately, I had a sinking feeling that potential employers weren’t reading similar articles about what to expect from job candidates that have a previous background in the military.
Changing Role of HR Technology
Talent Management Software: Why Free Trials Are a Smart Choice
Having been in the HR technology field now for 14 years, it’s refreshing to see more free trials for talent management software offered than ever before. This option gives organizations an opportunity to try before they buy. Yet, despite its value, many companies don’t take advantage of the offer or, when they do, they don’t involve those who will be directly impacted by the talent management technology. Maybe it seems like too much work upfront.
Based upon my experience, organizations need to look at the upfront work done to review a new HR technology system at their company as a smart investment. For many companies today, the investment in HR technology review by a variety of employees doesn’t seem worthwhile. Yet, the process can improve employee engagement in the software over time and lay the foundation for a widely adopted talent management strategy.
HR Guide to Social Networking Policy
The Facebook Policy You Never Knew You Needed
Right now, someone at your office is posting a message on their Facebook wall or sending out a Twitter tweet. You may write off these internet-based social networking tools as innocuous but they can pose serious legal risks if left untamed without an iron-clad employee social networking policy. Don’t believe me? Sit down and I will tell you a tale of a restaurant chain.
The Impact of Compensation Methods and Decisions
The Impact of Compensation Methods on Employees and Organizations
It’s time to think about the many, sometimes subtle, choices behind determining appropriate compensation of your employees. The success of your organization can ride on these compensation decisions.
From the mom and pop shop that needs workers to restock shelves to large corporations whose employees manage million dollar funds, your organization’s compensation decisions can either boost your bottom line or leave it in the gutter. The key is to make realistic, budget-friendly compensation decisions at each step.
Continue reading The Impact of Compensation Methods and Decisions »
Compensation Budgeting: Determining Merit Pay Increases
Perform Efficient Compensation Planning for Merit Pay Increases
We are in the post-season for HR. It’s open enrollment time, flu season and, for a lot of organizations it’s also the time of the year for performance management and merit pay increases. Basically, there’s so much to do and so little time to do it. Welcome to human resources. Did anyone tell you it was going to be like this? Probably not.
They also probably forgot to tell you that you would do this event-based activity on top of all of your normal day-to-day hr tasks including employee relations issues and recruiting. But, you are a superstar who can manage an employee relations issue in between phone calls with your benefits broker while drafting a revised sick leave policy to account for the swine flu epidemic.
Now, if you could just get some help from your managers. But, here’s the toughest part – your managers need help from you.
Continue reading Compensation Budgeting: Determining Merit Pay Increases »
Employee Compensation Policy
Writing an Employee Compensation Policy
For legal protection and good business sense, every company should have an up-to-date employee compensation policy. What is the status on yours?
An organization should not wait for dire circumstances, such as a pay inequity lawsuit, to write down or update their employee compensation policy. All organization leaders should create a written policy document or refresh their existing one for legal protection, and as a guideline or framework for the company’s compensation program.
Below is a list of helpful tips and tools for creating an effective employee compensation policy that is specific to your organization.
What Does the Employee Free Choice Act Mean for Employers?
Fast Politics: Latest News on the Employee Free Choice Act
Labor union membership numbers have changed in the last few decades and so have the union’s political efforts. As an HR professional, it’s important that you stay up-to-date on union activities since these politics can affect your company’s bottom line.
The two different, but linked, pieces of legislation to learn about and prepare for are the Employee Free Choice Act (EFCA) and the Re-Employment of Skilled and Professional Employees and Construction Tradeworkers Act (RESPECT Act).
Continue reading What Does the Employee Free Choice Act Mean for Employers? »
Effective Employee Communication
Effective Employee Communication Part 2: How to Avoid Trouble
Clear and effective employee communication is an element of everyday work operations and is absolutely vital to all aspects of business interaction. And, keeping it both accurate and efficient can be tricky.
Most of us were taught about the challenges to accurate communication as kids. You likely played the game at some type of youth camp where everyone sits in a circle and the game begins with a whisper. The first person whispers a word or phrase into the next person’s ear and can only whisper it once. Each person subsequently whispers into the next person’s ear until the very end. Usually, a phrase like, “I have two cats,” ends up being something akin to, “I live boo rats.”
The following is my advice on how to avoid an “I live boo rats” outcome at work.
The HR Role in 401(k) Participation
How to Increase Participation in a 401(k) Plan Among a Young Workforce
Here’s a known issue, at least in my experience: Most 27-year-olds can’t be bothered to save in their 401(k), unless you bribe them with a 401(k) match. “No match, don’t bother me.”
Rather than give up on 401(k) participation among 27-year-olds, let’s think through what would make it “inevitable” that they save. The first step to increasing participation in a 401(k) plan involves analyzing this as a sales problem.
Sales Obstacle #1: We insist on selling 401(k)’s to 27-year-olds as a retirement vehicle.
If they retire at 70, they’ll retire in the year …. 2052. For most 27-year-olds I’ve worked with, “2052” is just not relevant – yet. 2052 as the focus? No sale.
Solution: Sell the 401(k) plan as a savings vehicle to 27-year-olds in a way that is compelling to them.
What Is a Workforce Planning System?
Workforce Planning: You Don't Have to Be a Planner
I am a planner by nature and the choice I made of what business to go into - human resources and policy analysis - reflects this preference. The title of this blog is meant to appeal to the many business owners and managers who hear “workforce planning” and, unlike me, would rather not plan but just jump right in and “get ‘er done.” I’d like you to realize that you’re already doing workforce planning everyday and give you some tips on how to do it better.
Employer's Guide to Worker's Compensation
Top 5 Myths About Workers’ Compensation
If you want to give a human resources professional a migraine, just whisper two words in their ear: workers’ compensation. This system of government-regulated insurance for work-related illnesses and injuries is as complicated as it is vast. In most states, workers’ compensation is a “three-way” system: an employer can be self-insured, participate in the state-funded program, or obtain third party insurance. But fear not. The following pointers will dispel the top five myths about workers’ compensation.
Continue reading Employer's Guide to Worker's Compensation »
Strategies for Difficult Employee Communications
How Do Companies Communicate with Employees in Difficult Times?
In my experience, there are two main schools of thought on how companies should communicate with employees during a recession.
1) It is better to wait to communicate with employees until you have all the information you can gather. Otherwise, employees may ask questions you cannot answer and you may look bad from their perspective.
2) We all live in a world of uncertainty and waiting before presenting information will only stimulate the rumor mill and employee anxiety.
This blog post will summarize why I prefer the latter approach. I will use as an example the situation I wrote about recently, of having to layoff or terminate employees as a last resort to get through a recession.
Continue reading Strategies for Difficult Employee Communications »
Tips on Employee Communications
Employee Communications Part 1: Some Do’s and Don’ts
A key influencer of the bottom line in any workplace is communication. Be it with customers, internally or even with the media, communication can and does affect any business model at every level. Even the military views a unit’s ability to operate efficiently as having the ability to “shoot, move, and communicate.”
In my time in the workforce, both military and civilian, and I have seen some methods of communication – particularly employee communications internally from management - that are indeed either powerfully efficient, or dreadfully ineffective.
The Growing Interest on Corporate Responsibility
Layoffs, Terminations, and Corporate Responsibility
There’s no doubt about it. What’s going on now in the economy is tough. Everyone is stressed to meet payroll and to drum up whatever revenue may still be out there.
I commend for the foresight and humanitarianism of organizations that hold onto their workers in spite of declining revenues. The growing emphasis on corporate responsibility is possibly inspiring their noble choices. But they also know that, if possible in times like these, it is a good investment to retain talented employees who have proven their value and to wait out the downturn with them. They also realize few other employers are hiring and, if they let employees go, the employees and their families will have serious difficulty.
Continue reading The Growing Interest on Corporate Responsibility »
Developing a Compensation Philosophy
Why You Need a Compensation Philosophy
By Staff Writer
In a recent PayScale webinar, Stacey Carroll, MBA, SPHR, touched on a key HR process that can get skipped when life at the office becomes too hectic. Once you’re done sorting out a new hire’s training schedule or making sure current employees understand their medical benefits, it’s important to set aside time to review or create your company’s compensation philosophy. This philosophy will then inform your compensation policy. And, that policy acts as the foundation of smart compensation program.
How do you get started in this HR process and what is the difference between a compensation philosophy and a compensation policy?
Creating a Compensation Policy and Philosophy
Q&A Session – The Essentials of Developing a Total Compensation Policy
The following is a transcript of the question and answer session that followed PayScale’s webinar, Developing Your Compensation Philosophy & Policy. The topics covered in these questions include vacation time, salary comparisons and sharing salary range information with employees. The main focus is developing a compensation plan philosophy and creating a compensation policy that’s competitive. Answers are provided by PayScale director of customer service and education, Stacey Carroll, MBA, SPHR.
Continue reading Creating a Compensation Policy and Philosophy »
The Future Labor Shortage
What Happened to the Future Labor Shortage?
Whatever happened to all that talk about the looming labor shortage? You remember the experts telling us that we were going to see a labor shortage in the not too distant future? More open positions with not enough people to fill them. This effect would occur as the aging Baby Boomers start retiring and there would not be enough workers from the younger generations to replace them. Attention on this issue has not surfaced much these days probably due to our economic recession and high unemployment. It is difficult to think about labor shortages when there is currently a labor glut.
The Effects of Training on Employee Performance
Why Employee Development Is Important
Employee development is something that most people imagine as intrusive all-day group training sessions. Unfortunately, this dreaded approach to employee development is just the opposite of how employee development should occur and feel to employees. Employee development can manifest itself in many forms of training, evaluations, educational programs, and even feedback. If executed correctly, the effects of training on employee performance can often encourage growth within the worker and the organization itself.
Continue reading The Effects of Training on Employee Performance »
Ideas for Executive Compensation
Q&A Session – Expert Ideas for Executive Compensation
The following is a transcript of the question and answer session that followed PayScale’s webinar, How to Develop Your Executive Pay Strategy. The topics covered in these questions include adjusting to a down economy, finding salary data for a unique industry and total cash compensation. Answers are provided by author Sharon Koss, SPHR, CCP, president of Koss Management Consulting
Establishing Competitive Pay Rates
How to Target Pay Rates for a Job Position
Here at PayScale, the HR professionals that we work with often ask us, “What method should we use for targeting pay rates for a position?” While the compensation planning tool that we offer our customers gives them plenty of numbers and calculations, it does not provide a pay strategy for a particular job position. That's up to you to develop based on company goals.
So, how do you narrow down all of your salary data strategically?
How to Design an Executive Compensation Policy
How to Design an Executive Compensation Policy
By Staff Writer
If your company is looking to bounce back from a drop in profits or handle a growth spurt, you may be in the market for fresh talent at your executive level. What’s the best way to approach salary negotiations during the executive hiring process?
Continue reading How to Design an Executive Compensation Policy »
Hiring a Compensation Consultant
How to Draft an Employee Manual
Executive Compensation – Free HR Questions and Answers
Executive Compensation: Qualifying and Compensating the Top Levels of Your Organization
The following is a transcript of the question and answer session that followed PayScale’s webinar, Executive Pay 101: What You Need to Know. The topics covered include qualification and generalized methods of compensating top level executives, vice president and above. Answers are provided by Sharon Koss, SPHR, CCP, president of Koss Management Consulting.
Continue reading Executive Compensation – Free HR Questions and Answers »
Variable Pay Compensation
Implementing a Variable Pay Compensation Strategy: What to Beware Of
How do you reward top performers and keep employees loyal during tighter times? In a previous post I suggested a variable pay program as a way to incentivize your employees to stay with the company and help it reach its goals. From profit-sharing to discretionary bonuses, there are a variety of options.
Innovative Salary Programs
Using Variable Pay - A Compensation Strategy in this Current Economy
So there you are in the CEO’s office presenting your recommendations for next year’s salary budget. You have done the analysis, you have all of your facts lined up and your market data to support it. “The costs,” you say, “for next year’s salary increase budget will be … a gazillion dollars.” Well that’s not what you said, but that’s what the CEO heard! In fact, this is probably the fourth meeting that day going over all of the expenses that are needed to run the business and all that person sees is spending more money and an eroding margin. They ‘d probably rather hear about some low-cost salary programs.
Determining Supervisor Pay Grades
What Is Fair? Supervisor vs. Employee Pay Grades
In my time both in the military and civilian workforces, I’ve always been curious to know more about what weighs on my supervisors from day to day. Such things as scope of supervisor responsibilities, everyday demands, and supervisory skills required for them do their job. Sometimes I’ve wanted to know this information so that I can better support my supervisors. Other times, I’ve been in the mind frame that, “Heck, I could do their job.” And it comes down to, “Well, how much money do they make?”
How to Get a Job in Human Resources
How to Get a Job in Human Resources
Finding a new job in human resources is easy!
Now that I’ve lured you into reading my latest blog, I can confidently state that I’m only kidding. If you have experienced the same HR job market as I did over the past year, you may even demand that I see my EAP for substance abuse testing. In my 15 years within human resources (with various job moves interspersed), I have never, ever seen anything like the current human resources job market and am amazed at how quickly and fundamentally I observed a change in the landscape.
Non-Monetary Compensation
Non-Monetary Compensation and the Essentials of Developing a Total Compensation Policy
They say cash is king, but in today’s economy employees know that there is more to the story than cash alone. Today’s job seekers and your employees have become more savvy about non-monetary compensation. And there is a good reason they are paying attention to it.
Good health insurance and a generous retirement plan benefits are becoming more and more elusive. Employers who offer these non-cash rewards stand out among their peers.Employee Rewards
The Benefits of a Rewards and Compensation Strategy
There are not many second chances in running an organization. A misstep can cost thousands of dollars to correct. For instance, not setting up your compensation strategy correctly can mean you’re not able to attract the talent you need. By contrast, your overall rewards and compensation strategy is one area where you get a second chance.
Creating an Effective Compensation Plan for Sales Representatives
An effective sales compensation plan for sales representatives is critical to the success of any go-to-market strategy. Yet the design and management of a compensation plan for sales teams is rarely easy. After all, determining how people are paid is a sensitive matter which can become increasingly complicated when reconciling the disparate needs of key stakeholders in sales, finance, HR, and marketing.
Continue reading Creating an Effective Compensation Plan for Sales Representatives »
Managing Employee Skill Sets
Workforce Alignment Part 2: Managing Employee Skill Sets
In my last post on workforce alignment, I suggested that each part of your company should be well-informed about all aspects of the business so they can provide excellent service at any time. Perhaps you agree with this idea but aren’t sure how make it happen.
FLSA - Exempt Employee Guidelines
Guidelines for Managing Exempt-Status Employees
In the world of HR, one area that has produced a significant quantity of writing, thought, and opinion is that of employee exemptions within the Fair Labor Standards Act (FLSA). This area, however, is not particularly flashy or trendy. In fact, it is the boring material that HR professionals must learn and internalize in order to add value to their organizations. But, while not flashy, this knowledge area is one where millions of dollars can be saved by sound HR practices.
Pay and Compensation Data Case Studies
Real-Life Stories: PayScale Fills Compensation Data Gaps
By Staff Writer
Are you bumping up against stopping points in your salary benchmarking projects? You’re not alone. Everyday PayScale hears from companies that are looking to fill gaps in their pay and compensation data that traditional compensation surveys are either too costly or are simply not able to fill.
Below we’ve listed three examples where PayScale was able to help a customer out of a tricky spot. These examples were reported by the PayScale’s director of customer service and education, Stacey Carroll, M.B.A., SPHR.
Compensation Strategies for a Bad Economy
Pay for Performance: Compensation Strategies for Recessionary Times
By Staff Writer
Many companies will have modified their compensation and benefit plans during this economic recession in an effort to save money. They need to minimize costs now and, hopefully, get set to recover from the recession faster than their competitors.
You may have already reduced merit increases or even enacted a pay freeze. What are the trade-offs of cutting or freezing pay? Would an across the board pay-cut make sense or would it hurt certain key performers too much?
Let’s take a look at how the economic crisis has impacted compensation, and how you can maintain a pay-for-performance culture in recessionary times.
Continue reading Compensation Strategies for a Bad Economy »
HR Leadership Questions
Q&A Session – HR Leadership in Difficult Times: Implementing RIFs, Reorganizations and Freezes
Questions and Answers from Our HR Leadership Webinar
The following is a transcript of the question and answer session that followed PayScale’s webinar, HR Leadership in Difficult Times: Implementing RIFs, Reorganizations and Freezes. The topics covered in these questions include voluntary staff reductions, pay freezes and overtime pay. Answers are provided by PayScale’s director of customer service and education, Stacey Carroll, M.B.A., SPHR.
Compensation Plans for Part-Time Staff
Employee Retention: Compensation Plans for Part-Time Staff
By Staff Writer
Do you find that your part-time staff and hourly workers are harder to motivate and retain? Maybe you could improve your part-time employee retention by changing how you compensate them.
Employee compensation and pay plans are often the same for part-time staff versus full-time staff. But, there is one difference in compensation planning that can add up quickly: per diem.
Different Types of Motivation Theories
Employee Motivation in the Workplace: Different Types of Motivation Theories
Part 3
Does money motivate people effectively? In part 1 of this series on HR theories of motivation, we answered that question. No.
Well, if not money, how do we create an environment where people are motivated?
Check part 2. The key: create productive work relationships.
But people are different; so how do we build productive work relationships with all types of people? In this last installment on workplace motivation, we’ll cover some of the main theories for how various people motivate themselves.
Workforce Alignment: Employees Working Together
Workforce Alignment Part 1: Get Employees Working Together
Have you ever wondered why people working at the same organization sometimes seem to be working against each other? For instance, the C-suite does not know the issues confronting line workers, marketing is in a different world than sales, and no one talks to the technicians. In fact, this seems to be the norm more often than not.
The process of getting everyone in communication and doing their different jobs for the good of the whole is called workforce alignment.
Continue reading Workforce Alignment: Employees Working Together »
Reduction in Force Guidelines
Implementing RIFS: A Step-By-Step Approach
By Staff Writer
During these unstable economic times, many companies are making tough decisions about their workforce size and structure. If you are an HR professional in the middle of these changes, you will be asked to take a leadership role and keep staffing moves efficient and organized. How can you do so?
In this post you’ll get in depth advice on moving through the three phases in any changes in your workforce: analysis, decision-making, and communication. Working through these phases is similar to developing a new project; a project that requires assigned owners, clear goals, and implementation milestones along the way.
A Look at Executive Pay Limits
Do You Support Executive Pay Limits?
By Staff Writer
In the chaotic and frightening times we’ve all stumbled into, it sounds nice to get back at someone, something, an institution, anything, for what has happened to many people’s 401Ks, homes and jobs. Who can we point a finger at?
Of all the options, the one that has received a lot of media attention is executive compensation. Salary data abounds online, pointing out that executives' motivations are misdirected, resulting in an overpaid, profit-driven culture where the guy or gal in charge only looks out for number one. What do you think is a smart way to change the status quo?




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