SalaryTrends 
 
FreshView
a publication of Cascade Employers Association
 

JUNE 2011    

   Dollars & Sense Poll

  In This Issue:

 

 

What Pay Strategy is Right For Your Organization?

By Jerry Bumgarner, CCP, Director of Research & Compensation Services
Cascade Employers Association
jbumgarner@cascadeemployers.com

Early in my career as a newly hired Compensation Manager for a large organization, I asked the VP of Human Resources what the compensation strategy was for the Company. Because I was hired to help improve Company pay practices, I thought this was a reasonable question. But his answer caught me by surprise: "We hired you to answer that question for us." It didn't take me long to realize that my new employer, which had been in business for more than 120 years, was not very strategic ... especially when it came to pay.

With Company profits significantly below industry standards and employee turnover averaging about 40% per year, I found myself questioning my decision to accept the position. Scary! But, because I like challenges (or because I'm a glutton for punishment), I stuck around.

As you might guess, pay was the primary reason identified by former employees for leaving the Company. Like most organizations I've encountered over the years, the compensation practices for this Company were simply intended to be "equitable and competitive," which is standard jargon for paying "similar" to the rest of the universe without regards to the specific needs of the business. Not strategic at all. Because of the apparent disconnect between HR and the "business" side of things, there wasn't much consideration given as to what kind of a pay package we needed to recruit, engage, and retain the right talent ... that is, the kind of talent needed to achieve the Company's diverse business goals. We had a one size fits all compensation program, but the one size simply didn't fit all of our business units.

As a result of an extensive evaluation of our existing compensation practices in relation to the organization's mission and goals, a compensation strategy or, more precisely, compensation "strategies" began to take shape for the Company and its business units. In brief, we retained the same employee benefits plans for all areas of the Company. However, salary and bonus/incentive strategies and plans could be "different" from the overall Company strategy and plan if it was deemed to be necessary for the business to succeed (and would not result in illegal discrimination).

Following are 7 examples of where pay strategies and plans could be different:

  1. A senior level executive, in order to attract and retain the "best" industry talent,
  2. Exempt level roles to recognize the expectation of flexible work schedules,
  3. "Key" roles/talent that are considered essential to the success of the organization,
  4. Industry specific roles/talent that are determined to be "hard to find",
  5. Product line roles/talent where pay practices were different from the core business,
  6. Sales roles/talent where market demanded different pay practices, and
  7. Corporate "experts" who provide specialized guidance to line and staff professionals.

EPILOGUE

As we realigned our pay practices to support our diverse group of businesses, a very encouraging relationship formed between HR and other areas of the Company. We were becoming true "partners" in operating the businesses. As a result of compensation and other improvements that were introduced by the HR partners, employee turnover declined to healthy levels, the Company became an employer of choice in the area, and Company profits soared to levels above industry norms within a relatively short period of time. The Company continues to this day to be a great employer to work for in the area.

Contact Cascade if you would like guidance or assistance in aligning your compensation practices with the mission and goals of your organization. Our staff of experienced compensation professionals is well trained and equipped to help you establish and maintain great compensation systems.

For more information about the Oregon Regional Pay Survey, or other surveys available through SalaryTrends, go to SalaryTrends.com.

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U.S. Supreme Court Blocks Sex Discrimination
Class Action Suit Against Wal-Mart

By Jenna Reed, Director of Human Resource Development Services
Cascade Employers Association
jreed@cascadeemployers.com

The United States Supreme Court decided in favor of Wal-Mart by blocking what would have been one of the largest sex discrimination lawsuits from proceeding as a class action. The Court reasoned that the claims by the women in the proposed class did not have enough facts or damages in common to allow the case to proceed as a class action. For example, the women in the proposed class were located all over the country, with different supervisors and managers who operated with mostly independent discretion and not as part of a larger predominating Wal-Mart corporate policy of discrimination.

The women still have the right to pursue individual claims against Wal-Mart. If this lawsuit had been certified as a class action, it would have involved nearly 1.5 million current and former employees and potentially billions of dollars in damages.

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Do Your Company's Benefits Include Strong Leadership?

By Michelle Toney, Director of Knowledge Development
Cascade Employers Association
mtoney@cascadeemployers.com

With the rapid pace of change in every workplace, Leadership skills are more in demand than ever. Do you have the knowledge and skill to be that necessary Leader in your culture? Join us on Cascade's GreatWork! blog as we take on a 30 Day Leadership Challenge series with fresh ideas and tips that you can use as your own.

Just sign up here to get blog posts delivered to your email. We promise we won't share your email information with anyone else.

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What Information Should Be Included in a Job Description?

Provided By: CCH
(a benefit to Cascade's Members)

Job title. A job title should be a mini job description, and generally it should not only give a general idea of what the job entails but also include an indication of the level of the job.

Example:

A job title like Senior Accountant tells you not only that the person holding the job is an accountant, but also that the job is not a junior-level or entry position.

Do not use gender-based job titles such as Salesman. While there is no authority for the proposition that a gender-based job title by itself is an unlawfully discriminatory practice, job titles can end up in recruiting advertising and then can be the foundation of discrimination actions. Therefore it makes little sense to use a gender-based title.

Date. The date the description was prepared is generally indicated at the top of the document, and is useful for planning periodic revisions.

FLSA exemption status. Job descriptions generally indicate whether the job is exempt or non-exempt according to the provisions of the Fair Labor Standards Act (FLSA).

General summary. This section, typically found at the top of the job description, summarizes the overall purpose and functions of the job. Consisting of four or five sentences, it should briefly set out the main purposes and functions of the job. The general summary should describe the job's reporting relationships—who reports to the person holding the job, and who the person holding the job reports to—if the job description does not have a separate section for this purpose. Because it is a mini version of the job description as a whole, the General Summary may be easier to write after the other sections of the job description are complete.

Principal duties and responsibilities. This section, usually following the General Summary should contain seven to ten statements that itemize the primary duties or essential functions of the job. Duties should be presented in a logical order and include information regarding the frequency or percentage of time spent on each task.

Tasks that do not account for at least five percent of the work are generally not included. However, if there is some aspect of a job's requirements, usually that occurs periodically, or as little as once a year, but whose impact is organization-wide, the task should be mentioned. A good example of this is a person who holds the title of corporate secretary. Several tasks that are insignificant in and of themselves are done for the annual stockholders meeting. If any are not done or are done incorrectly, the corporation faces significant liability.

Also, the listing of the job's duties and responsibilities should make clear the consequences or impact of the job holder making a mistake or being in error. The job description doesn't have to spell out this information specifically, but it should be apparent from reading the listing of the job's duties and responsibilities. Many jobs are paid at a specific level because of risk factors to the organization.

Job specifications. Job specifications detail the specific knowledge, skills, abilities and competencies that are required for a person to competently perform the essential functions of the job. Typical elements include education, years and type of experience, training, licenses, certifications, skills (e.g., analytical, detail-orientation), as well as mental and physical demands.

Job specifications may be a section of the job description (typically following Principal Duties and Responsibilities), or it may exist as a separate document.

To avoid discriminating against protected groups, it is important that specifications be realistic minimum requirements. Job specifications do not necessarily describe the skills and qualifications possessed by current job holders. To help ensure legal defensibility, include statements indicating why each specification is required to competently perform the specific job.

Physical and mental demands. To comply with the Americans with Disabilities Act (ADA), job descriptions should include statements detailing the physical and mental demands (lifting, bending, walking) required to perform a job. This information could be included under Job Specifications or it may appear as a separate section of the job description.

Alternatively, mental and physical requirements may be listed in a separate document specifically for ADA compliance.

Working conditions. This section describes things like the noise and temperature levels that must be endured, extensive travel, any dangerous machinery that the job holder must use, and even uncommonly high levels of electricity. Job conditions of "white collar" positions should also be considered. Do not make the false assumption that these employees are never subjected to adverse working conditions. Office noise and factors like having a poorly designed work area for the tasks to be performed should be included in job descriptions and taken into consideration in job evaluation. Defining and documenting working conditions is helpful for compliance with the ADA.

Note: Cascade recommends using words like "typically" or "generally" to allow exceptions when addressing the minimum qualifications, physical/mental demands, and working conditions associated with performing the essential duties of a job acceptably (e.g. typically requires a degree and 3 to 5 years of experience...). Tradeoffs are also acceptable ways of allowing for exceptions (e.g. ...5 to 10 years of related experience may be considered in lieu of a degree).

Approval. This is a section for the appropriate members of management to indicate their approval.

Disclaimer. For the protection of the organization, job descriptions should contain a disclaimer statement. This statement should say that the job description is not meant to be an all-inclusive statement of every duty and responsibility that will ever be required of an employee in the job.

The disclaimer statement will protect the organization from employees who refuse to perform assigned tasks on the basis that "it's not in my job description" and will provide limited protection from the changing nature of many jobs.

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FreshView on Compliance

By Cascade Staff

Question: I'm thinking about hiring a minor to work for me during their summer break. What should I watch out for?

Answer: As we head into summer, it is common for employers in Oregon to hire minors to do seasonal or temporary work. There are steps an employer must make before extending an offer of employment.

First, you must apply for and obtain an annual Employment Certificate from the Bureau of Labor and Industries (BOLI). Next, you must verify the age of the minor and keep a list of all minors hired. There are also hours of work regulations specific to minors. For example, when school is not in session, 14 and 15 year olds may work up to 40 hours per week during the hours of 7:00 a.m. to 9:00 p.m., while 16 and 17 year olds may not work more than 44 hours per week.

Keep in mind, many of these rules change when school is in session. Minors must also be provided a 15 minute break for every four hours worked and a meal period of at least 30 minutes must be provided no later than five hours and one minute after the minor reports to work. Finally, minors are prohibited from doing certain types of work due to their hazardous nature.

Contact Cascade to register for an in-depth look at hiring minors in the workplace.

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Did You Know?

58.3% of non-union organizations with fewer than 100 employees have payday on a biweekly basis (every two weeks). Only 3.1% of companies pay once a month.

Look here each month for a specific policy or benefit practice and see how your practices compare to other employers just like you.


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