FreshView
a publication of Cascade Employers Association
JULY 2011
Dollars & Sense Poll |
In This Issue:
- Think About the Best Job You Ever Had
- Diversity: Survey Indicates Continued
Pay and Career Disparity - Bonus Design Options: Get Creative
- FreshView on Compliance
- Did You Know?
"Think about the best job you ever had..."
By Patrice Altenhofen, President
Cascade Employers Association
Over the last 10 years, I have challenged hundreds of employees with that question. I have asked them to identify the most awesome job they had – maybe it was their first job, or the job they had in high school, or the job they have presently. I ask them to try to pinpoint what it was about that job that made it so great. Here is the list of some of the most common answers:
- Trust – I trusted my supervisor and/or my supervisor trusted me
- I had input into decisions which impacted me
- It was fun
- The work was challenging
- I was doing something important
- My schedule was flexible
- I loved my teammates
Conspicuously missing from this list? Pay. Out of the hundreds of responses I have received, I can only think of two times when someone has identified pay with a great job.
But, what happens when I ask "Think about the worst job you ever had..." Two answers consistently arise:
- My supervisor was a jerk
- The pay was lousy
My colleagues in the compensation field often squirm in their chairs when I mention this. I want to reassure them that the moral of this story is not "Pay is not important." Rather, I believe this shows that pay is a "hygiene" factor – to maintain employee satisfaction, it must be enough. Without adequate pay, even the best job is untenable. And while pay alone may lead to satisfaction, rarely will it transform a mediocre job into a great job.
If you are a "great" employer striving to differentiate yourself with promises of fun, meaningful work, do not overlook the importance of a competitive pay program. Without one, you may lose your best and brightest employees in their search for the best and brightest job opportunities.
Diversity — Survey Indicates Continued Pay and Career Disparity
By Jerry Bumgarner, CCP, Director of Research & Compensation Services
Cascade Employers Association
(Source: CareerBuilder Survey)
According to a recent CareerBuilder Survey, ethnicity, sexuality and disability continue to make a difference when it comes to workplace earnings, advancement and feelings of discrimination. The survey, covering more than 1,300 workers in 20 of the largest U.S. population centers, points to continued inequalities between diverse and non-diverse worker groups.
Following is a summary of the results comparing diverse workers. The survey was conducted between February 21 and March 10, 2011.
Disabled workers are the most likely to earn less than $50k (58%), compared to 31% of non-diverse workers. Asian workers are the least likely of all segments to earn less than $50k (just 25%).
Lesbian/Gay/Bisexual/Transgender workers are the most likely to earn six figures (18%), outpacing non-diverse workers by 1%. At 6%, women are the least likely to earn six figures.
26% of non-diverse workers reported holding management titles, followed by 22% of LGBT workers. This compares to 15% Asian, African American and women workers who are the least likely to hold management roles.
Asian and African American workers are the most likely to change jobs when the economy improves.
African American workers are the most likely to report feeling discriminated against in their current jobs, while Asian workers are the least likely to feel discriminated against among all segments.
More than half of non-diverse workers feel diverse workers have a better chance of landing new jobs; one-third of diverse workers agree.
Some demographic groups are also more likely to fall into certain professions, according to CareerBuilder:
Hispanics (49%) and women (40%) are most likely to work in entry-level administrative and clerical roles, which is reflected in their lower earnings compared to their peers.
Asians are the least likely to be managers (just 11%), while 69% were in professional/technical jobs. Disabled workers also ranked high in the professional/technical job category (at 62%).
Non-diverse workers are the most likely to be managers, with one in four indicating they are in such positions.
According to CareerBuilder, while the survey points to inequalities between diverse and non-diverse groups in pay, career advancement and feelings of discrimination, these associations can't necessarily be attributed to discrimination. In fact, some diverse worker groups ranked higher than non-diverse workers in compensation, reflecting a movement toward better equality. However, some minorities felt that discrimination still remains:
25% of African-Americans reported feeling discriminated against.
Asians were least likely to describe themselves as being discriminated against.
"The U.S. workplace has experienced fundamental shifts over the last two decades that have had a major impact on business, including economic downturns, the introduction of new technology and the strengthening of laws designed to promote equality," said Dr. Sanja Licina, Senior Director, Talent Intelligence & Consulting at CareerBuilder.
"While companies have made strides in creating an inclusive workplace for all workers, there is still work to be done, especially in the areas of hiring, compensation, and career advancement."
Bonus Design Options: Get Creative
Provided By: CCH, HR Answers Now
(an online resource for Cascade's Members)
Bonuses are discretionary lump-sum payments made in addition to an employee's regular salary or wage. Frequently, bonuses are based on employee earnings, thereby preserving pay differentials.
Technically, bonuses differ from incentives in that they are granted "after the fact," and not based on predetermined objectives. In practice, however, the distinction between bonuses and incentives is often blurred. Employers do develop "bonus programs" that are based on the achievement of short-term objectives or long-term goals.
Annual bonuses.
Annual bonuses are commonly awarded based on the attainment of profit objectives that have more to do with unrelated market conditions than employee effort. As the name suggests, these bonuses are paid out on a yearly basis. Although annual bonuses are simple to administer, they can be expected to do little to motivate employees.
Even when annual bonuses are based on employee performance, they are long-delayed rewards for what may have been excellent work at the beginning of the year. The more an employee sees his or her job as a long-term "career," the more an annual bonus makes sense because the employee is already thinking in terms of long periods of time. The less an employee thinks of himself as investing in career growth, skills and abilities, the more he or she will need immediate rewards for work well done—if the rewards are to achieve their motivational purpose.
Spot bonuses.
Spot bonuses are an effective means of providing immediate recognition for going above and beyond the regular duties of a job. A spot bonus generally consists of a small cash award of $500 or less that can be delivered within a few days. By decreasing the time between performance and the reward, spot bonuses have a greater motivational effect. More immediate rewards, however, mean more frequent evaluations and higher administrative costs.
Referral bonuses.
An effective way of recruiting qualified job applicants is to ask current employees to refer friends and relatives for employment and provide a bonus if the referred candidate is hired. The most common incentive employers use to encourage employee referrals is cash. The bonus can be calculated as a flat amount or a percentage of the new hire's salary or dollars saved. Many plans break the cash award into two parts—one to be given to the employee at the time the referral is hired and the other awarded when the referral completes a probationary period.
Retention bonuses.
Cash retention bonuses are a popular means of attracting and retaining key employees. They are most frequently offered to staff in hard-to-fill jobs, such as information technology professionals. Payouts are often tied to length of service and may be expressed as a percentage of pay.
Holiday bonuses.
Some bonuses are awarded regardless of individual effort. An example is the type of holiday bonus where every employee receives the same bonus, regardless of individual performance. These bonuses may be in the form of cash, food, or gift certificate for a local retailer.
As this is not a complete list, if you have any questions or want to have a conversation on what might work within your organization, please give Cascade a call! We'd love to hear from you.
FreshView on Compliance
By Patrice Altenhofen, President
Cascade Employers Association
Question: How is overtime calculated when employees work at different rates of pay in the same workweek, such as when a premium is paid for weekend work?
Answer: The weighted average rate of pay is used to compute overtime.
For instance, if an employee worked 16 hours at $7.00 per hour and 30 hours at $8.00 per hour, the total straight time amount earned is $352.00. That amount is divided by total hours worked (46) resulting in an average hourly rate of $7.65.
Since the employer has already paid the straight time rates for all hours worked, only an additional ½ the average hourly rate is due for each overtime hour worked (½ x $7.65 x 6 hours = $22.95 overtime).
Need to know more? For fast answers to frequently asked employment-related questions, call AnswerSource at 866.232.7378, a helpline for Cascade members.
Did You Know?
51.8% of organizations (non-union, less than 100 employees) do not give any severance pay. Within organizations that do give severance pay, 37.2% give it for a permanent reduction in force, and 30.6% for an indefinite layoff. Only 1.8% of organizations give severance pay for a voluntary resignation, and only 5% do for a disciplinary discharge.
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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