JUNE 2012
In This Issue:
Setting Standards for Employee ExcellenceBy Jerry E. Bumgarner, CCP While working as the Compensation Director for a large insurance company, I was once contacted by a Claims Office Manager who complained we were not paying his Claim Processors enough to retain them. He was training them and many were leaving to work for our competitors. After some research, I found the turnover among processors was high (40%) and pay rates were about 20% below the local market norms. Because it appeared that our turnover was due to low pay, I quickly secured pay increase approval for all Claim Processors in the office. Problem solved? Wrong! One year later the manager called me back with the same complaint. Low pay was causing high turnover again. Upon further investigation, I discovered that while Claim Processors were leaving because of low pay, the real problem had to do with performance expectations. We had been treating the symptoms and not the real problem. As it turns out, the manager had been applying the same performance standards to inexperienced and highly experienced processors alike … and their pay was linked to their performance versus those standards. Are you beginning to see what the real problem was? Because the required standards addressed the volume, complexity and variety of claims processed, many inexperienced employees were “failing” to meet the standards and consequently were not receiving pay increases. To top it off, they quickly discovered they could take their experience and get higher pay elsewhere. Good for the employees but not for the company. So how do you set up employees to experience success?
Contact Cascade if you would like guidance or assistance in setting performance standards and aligning your employees with the mission and goals of your organization. Our staff of experienced professionals is well trained and equipped to help you establish and maintain effective systems. FreshView on BenefitsBy Curtis Farmer, Director, Group Benefit Programs Question: Can I pay for my employee's individual health insurance plan outside of our normal group coverage? Answer: No, this practice is prohibited by federal law, though it is has been a very common question asked recently. While an employer may find very valid and rational reasons for giving an employee a stipend to cover outside insurance premiums, there are several reasons this practice is not allowed by law and is also not good business. If an employer pays for an individual health insurance plan, it is basically endorsing that individual plan as part of its group offering. In many cases, this would put your group plan out of ERISA (Employee Retirement Income Security Act) compliance and could disqualify the tax-advantaged status of your group health plan. Secondly, this creates “adverse selection” as it relates to risk to the group insurer. Putting it simply, no carrier wants to insure a plan where all of the young, healthy, low-risk employees opt out for the “better deal” of a lower cost individual health plan that is fully or partially subsidized by the employer. If this were allowed, an organization would just see its group premiums increase to even higher levels. Finally, it's disadvantageous to both parties from a taxation standpoint. Any funds paid to the employee under this type of arrangement would be taxable at the state and Federal level, as opposed to group insurance premiums that are typically routed through an HRA (Health Reimbursement Account), making them tax free contributions for both the employee and the employer. Survey SpotlightBy Tina Hamel, Survey Manager SalaryTrends® surveys from Cascade Employers Association cover the pay practices of diverse organizations from various markets (Oregon, SW Washington, Northwest Regional, and National), and include multiple relevant data summaries. These valuable tools enable users to evaluate their competitiveness within specific talent markets. Now Open for participation:
Contact us with questions at surveys@salarytrends.com. More Audit Letters Sent by the OFCCPBy Jenna Reed, Director, HR & Compliance Services Watch your mail! The Office of Federal Contract Compliance has recently (May 2012) sent out another new round of audit scheduling letters. Typically these letters are sent to the CEO/President or the top HR person in the company. Please make sure your CEO/President is notified that any correspondence from the Department of Labor should be opened and reviewed immediately. As a reminder, contractors selected for an audit only have 30 days to respond to the initial notice, and the documentation required can be time consuming to pull together if your company is not maintaining its AAP in a timely manner. If you receive a notice of audit or a scheduling letter, please contact Cascade Employers Association for assistance. We can also assist you if your company is a new federal contractor or subcontractor and needs an Affirmative Action Plan or if you are behind on developing your annual plan. Guidance: Tips to Increase Direct Deposit ParticipationSource: CCH/Cascade Staff Direct deposit of paychecks provides many benefits, but getting “straggler” employees to enroll in an up-and-running program can be a challenging task. In Oregon it is not allowed to mandate participation in a direct deposit program for current employees, but there are some ways you can encourage participation. Educate employees. Employees who are educated and informed about how direct deposit works and what the benefits are to them may be more likely to sign up for a program. Some of the benefits may be:
Education can be creative, and doesn't have to be difficult. Payroll could conduct an analysis of where employees are cashing their checks and show them how much they could save by not having to pay fees to a check-cashing business. Another possibility is inviting a bank to conduct money management classes, including the advantages of direct deposit. Provide opportunity to enroll. The most effective way to encourage enrollment is to include an enrollment form in with the employee's paycheck. A simple form with a way to return the information in a secure way may be all the employee needs to encourage them to enroll. ©2012 Cascade Employers Association. All rights reserved. |