FreshView
a publication of Cascade Employers Association
NOVEMBER 2010
Dollars & Sense Poll |
In This Issue:
- Build Loyalty with Honest, Direct Pay Communication
- 7 Keys to Incentive Plan Success
- Gender-Based Pay Discrimination —
Crack-Down on Equal Pay - Did You Know?
Build Loyalty with Honest, Direct Pay Communication
By Carey Klosterman, PHR, Human Resources and Compensation Consultant
Cascade Employers Association
cklosterman@cascadeemployers.com
In the best of all possible worlds, what you have done up until now will persuade employees to stay. Employee loyalty is an earned response to the trust, respect and commitment shown to the individuals in your company. -- Paul Sarvadi
Getting employees to understand your company compensation policies and practices will build trust and loyalty between you and your most vital resource ... your people. It makes sense that informed employees are more motivated to be accountable for the bottom line, especially if any type of incentive is offered. And in these turbulent times, being honest and direct about individual employee pay prepares you, and your employees, when facing a layoff, pay cut, or a year of no increases.
As business improves, many employees will be tempted to seek out other job opportunities. In response, the recent trend has been for organizations to establish and communicate formal compensation philosophies (about 90% according to WorldatWork's September 2010 Compensation Programs and Practices Report). These philosophies are generally detailed plans outlining how employees will be paid, when increases can be expected, the basis for increases, and whether there will be any bonus opportunities. However, that same report states that 40% of employers don't believe their employees really understand their company's compensation philosophy. To impact employee loyalty, the policies must be understood.
Effective communication of those things that impact your employees may be your greatest strength for ensuring your top talent is retained. By cultivating an open and trusting atmosphere with a well informed staff and reasonable pay practices, greater commitment and loyalty will follow.
Call us. We'd love to help you help your employees understand your pay policy.
7 Keys to Incentive Plan Success
By Jerry E. Bumgarner, CCP, Director, Research & Compensation Services
Cascade Employers Association
jbumgarner@cascadeemployers.com
7 important actions your organization needs to take to help assure that your incentive compensation plans are successful:
Strategize: Establish a total compensation strategy for those covered by the plan, while identifying the competitive talent market, pay positioning versus that market, and the basis for payments.
Set Objectives: Identify the target total cash objective compared to the market, including how much should be base salary and how much should be incentive pay when performance objectives are achieved.
Define Performance: Determine the incentive plan performance criteria, while assuring clarity about what the organization expects to be achieved by the team and/or individuals being rewarded.
Tailor: Select individual incentive award opportunities, and be clear about what participants can earn at threshold, target, and maximum performance levels.
Communicate: Take the time needed to effectively communicate the mechanics and impact of the plan to participants. The inclusion of participants in plan design generally helps with communications.
Evaluate: Model the plan to evaluate its impact at various performance levels and be sure the plan strategy and goals are being achieved. Build in flexibility as needed.
Monitor & Adjust: Continuously monitor the plan and make appropriate prospective adjustments to assure its effectiveness and alignment versus goals.
Interested in learning more about Incentive Plans? Contact Cascade.
Gender-Based Pay Discrimination — Crack-Down on Equal Pay
By Carey Klosterman, PHR, Human Resources and Compensation Consultant
Cascade Employers Association
cklosterman@cascadeemployers.com
All organizations will inevitably have a pay-related dilemma they will need to contend with. Yet, for those organizations that hold federal contracts and are required to comply with affirmative action regulations, these dilemmas can be an even greater challenge.
The federal government has aggressively targeted the equal-pay issue, making prevention of pay-related disparities a top priority by implementing several initiatives to equalize pay:
- EEOC focus on gender-based discrimination. After a significant increase in gender-based wage complaints to the EEOC, the Obama administration proposed increasing the budget and hiring additional EEOC investigators to aid enforcement, likely resulting in more gender-based lawsuits.
- DOL emphasis on elimination of pay inequality. The Department of Labor's (DOL's) crack-down on gender pay inequity includes the OFCCP's emphasis on the elimination of gender-based discrimination for federal contractors.
- National Equal Pay Enforcement Collaboration. The EEOC, DOL, the Department of Justice's Civil Rights Division, and the Office of Personnel Management have collaborated to ensure that equal-pay laws are thoroughly enforced.
In a recent case involving Astrazeneca and gender-based wage differences, the OFCCP claimed that Astrazeneca underpaid female pharmaceutical specialists as compared to male pharmaceutical specialists at one of their facilities. They claim that the salary disparity existed even after adjustments were made for any valid pay-determining factors. The OFCCP is insisting that all employees who have been affected must be relieved of any hardships that resulted from this disparity. The OFCCP has threatened to cancel all existing and any future federal contracts until the pay inequity is eradicated.
It is imperative that federal contractors have a system in place for evaluating pay practices, making sure they are non-discriminatory. The following practices could help reduce the chances of having gender-based pay discrimination issues:
- Review pay practices on a regular basis to prevent any biases or disparities.
- Use consistent and structured processes to avoid "subjectivity" in pay and promotion decisions.
- Proactively respond to disparities or inequities found in your company's payroll practices.
- Conduct regular anti-harassment and anti-discrimination trainings.
- Update affirmative action plans annually to ensure that no gender-based pay differences exist between employees.
- Participate in annual pay surveys.
Cascade Employers Association can help you meet all of these requirements whether or not you have federal contracts. Cascade can conduct an annual preventative analysis of your specific pay program to determine if gender or racial disparities exist.
Cascade also conducts the Oregon Regional Survey which contains pay information for over 550 job titles applicable to most employers in the region. And with Cascade's new online survey system, SalaryTrends®, it's easy to submit your pay data and in return get information you need for making the right pay decisions (survey results are FREE to participating Members and discounted for non-members that submit their data).
It is the responsibility of every organization to prevent inequities in pay. Federal contractors are held to a different level of accountability, as they are required to meet affirmative action requirements set forth by the OFCCP. However, by taking the proper steps and ensuring that practices are non-discriminatory, gender-based pay disparities can be avoided.
Did You Know?
Curious about "discretionary" bonuses? 30.05% of non-union organizations (between
1-500 employees) surveyed give a discretionary bonus.
Look here each month for a specific policy or benefit practice and see how your practices compare to other employers just like you.
©2010 Cascade Employers Association. All rights reserved.
SalaryTrends® is a trademark of Cascade Employers Association.
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