Planning your budget? – Create Your Compensation Strategy Now

Now is a great time to start planning for your yearly strategic budgeting meetings. And since employee compensation is often the largest line item in a budget, it will pay big dividends to think through your compensation structure and get the data you need to make informed budgeting decisions, and to back up your budget requests.

Here are some compensation budgeting tips to get you started:

  • Know where you are in the marketplace when it comes to compensation. Now is a good time to focus on collecting the data you require as you prepare for first of the year/end of the year performance reviews. The market has moved a lot in the past two years, and some positions – especially tech positions – are still continuing to outpace the general market. If you think the 3% across the board average applies to your Software Developer, or your QA Engineer, you may want to do some research with more current salary data.
  • Always ask for more than you think you’ll need. It’s always better to have some extra budget to work with, or to use for the unexpected raise request that may be well-deserved, than to come up short.
  • Be strategic with pay increases. Are you giving people increases just for keeping a seat warm (i.e. cost of living adjustments)? Or are you being more strategic with your available dollars and linking pay to performance and results? If your CFO gives you a 3% budget increase for base salaries, are you going to give everyone a 3% raise? What do you think that does to your top performers, when they see Lazy Len getting the same increase they got? Why not give Rockstar Rudy a 5% raise and Lazy Len a 1% raise? If you’re afraid of having the ensuing conversation, then you likely don’t have the right performance management process in place, or you may need some new tools in your management toolbox for having difficult conversations. Either of these we can help with.
  • Better results should result in better rewards, whether that’s cash or some other form of reward that is more meaningful to that employee. Find out what motivates your staff and leverage it to the company’s benefit, creating a win-win possibility.

Having a consultant in your pocket to help with providing expert guidance and data can be very helpful in making informed decisions. A good one can also work as your ally to provide objective recommendations and supportive data to your company leadership.

More Resources

For more tips and information regarding creating a successful compensation structure including, how to have good conversations about compensation, how to use performance reviews effectively, and how paying the right wage can create a successful business check out these latest blog posts:

Compensation Conversations: How to make them better for your managers and employees.
Thanks to the Internet and social media, employees and potential candidates have access to salary information. How do you make sure that your employees feel fairly compensated? It turns out that paying more money isn’t the only answer. Learn more!

Do Ratings Help or Hinder Performance?
Grading on the curve may have worked for high school and college students, but is it really appropriate to use in evaluating employees? Microsoft recently abandoned their bell-curve-based rating system. Companies need some way to measure and reward performance, so what’s the solution? Learn more!

A Pay for Performance Perspective and Tips
When you give out pay raises, are you giving your worst performers the same raise as the guy or gal who brings in three times as much revenue? Many organizations tend to give across-the-board raises of about the same percentage to all employees. Which means the poor performers have no incentive to work harder, and the top producers have plenty of incentive to find a job with another company that rewards them better. How can you use pay incentives to create a successful business? Learn more!

HR and Startups – Planning for Successful Growth and Greater Productivity

Over the years Resourceful HR has had the opportunity to work with many cutting edge startups in both the Bay Area and the Pacific Northwest. It has been a pleasure to help these companies put a plan in place for recruiting, compensation, performance management and compliance. We have had the wonderful opportunity to watch them achieve their growth and productivity goals including hiring top talent and receiving the funding they require to continue to grow.

Accomplishing these initiatives is often easier said than done though, because many entrepreneurs and startup founders have many other responsibilities to focus on. As the Wall Street Journal recently reported, often startups do the bare minimum when it comes to HR because there just isn’t enough time in the day. As the article shares, HR is an important component to add to your bench in order to get most out of your most expensive line item – your people – and to avoid current and future people, performance and policy issues. We encourage you to read the entire article here as several HR consultants and executives share some great tips.

Four important things to remember:

HR is more than recruiting. Often startups are focused on acquiring the talent they need without thinking about the HR structure and initiatives needed to support them after they join your company. Don’t lose sight of the long game.

Your office manager may need HR training or support. Many times HR responsibilities fall to the office manager by default. He/she may need additional HR training or an HR expert that can provide support when it comes to employee, performance, or compliance issues, as well as guidance on which HR activities will bring the greatest return on investment.
Be conscious of the culture you want to create and work towards creating it from the very start. It is much easier to start as you intend to finish rather than find yourself in a situation where you may need to make big culture changes when you’re already well underway.

Assess which policies are required by law and which policies will clarify company expectations and offerings. You may also want to consider policies that are specific to your work environment and/or demographic such as social media, telecommuting, and relocation policies. At this point, it’s probably safe to say that every company should have a social media policy given its ubiquity in our current society.

Be aware of the nepotism. Startups often tap their own networks for hiring, which has its plusses and minuses. While hiring from referrals tends to be less risky, you can end up with a homogeneous and/or cliquish and divided staff.

Additional resources as you grow your startup:

Are you hitting the 20-employee mark?
Employment laws we advise you to embrace
Create structure for successful growth and greater productivity

Grades and Ranges – What are they and why are they important?

Pay grades and pay ranges are key components to creating a successful compensation plan and driving performance.

Pay Grades and Pay Ranges Defined

A pay range sets a minimum, midpoint, and maximum dollar amount that your company has determined it will pay for a given job. Employees’ salaries are determined within the range parameters based on their performance quality, proficiency, internal equity, scope of responsibility and tenure. Pay grades are a mathematically determined set of pay ranges with increasing midpoint differentials (the difference between the midpoint of one range and midpoint of the next range up) based on the nature of the positions included in the range and usually with overlapping boundaries. Grades provide a way to give structure to various pay ranges within a company.

Why are they important?

Grades and Ranges:

  • Help with financial planning and projections.
  • Ensure your business and compensation strategies align.
  • Ensure pay equity and can be perceived as legal protection against an inequity claim.
  • Inform salary movement related to career paths.
  • Help determine how to pay unique positions.
  • Makes administration and employee conversations related to compensation more transparent.

As an organization grows, grades help to ensure fairness, make it easier to make compensation decisions and share with employees how you make those decisions. As we shared in our blog post on tips for making compensation conversations more productive for managers and employees, employees who are well informed and communicated with clearly about the pay-setting process in their organization, walk away feeling much more satisfied even if they don’t agree with the actual number.

Is it time to create a compensation structure with grades and ranges?

If you answer yes to one of the following questions this may be a good time to create a compensation structure.

  • Do you have jobs that may need to be leveled?
  • Do you have unique or hybrid jobs that you can’t figure out how to pay?
  • Do you have known pay issues that a structure would help fix? (i.e., legacy issues, compression issues, equity issues, budget issues)

For more tips on compensation including tips on using pay to drive performance visit our blog.

A Pay for Performance Perspective and Tips

A Pay for Performance Perspective and Tips

Recently Business Insider reported that one of Gawker Media’s writers, Neetzan Zimmerman decided to leave the company to work at a startup social media organization. While the news of someone making a career move may seem mundane, this move is interesting when you start to delve into this particular reporter’s performance successes and how they relate to a pay for performance model. Gawker employs approximately 15 writers and it turns out that Zimmerman was responsible for bringing in 99% of Gawker’s web traffic. 99% of the results that Gawker needs to be successful. 99%! And while we of course don’t know the complete story of why Zimmerman left the company, the statistics provide an interesting perspective regarding whether an organization should use a pay for performance model as an incentive to ensure top performers don’t even think about leaving.

Many organizations have a tendency to give a cost of living pay or ‘thanks a latte’ increase across the board, which usually amounts to about 3%, without truly measuring which employees are bringing the most value. This means that even poor performers are being rewarded. By not differentiating financial rewards between top and poor performers, there is no incentive for poor performers to “up their game” to accomplish the tasks that are most critical to the bottom line. And it’s a slap in the face to the ones who are giving it their all (and then some) to achieve success for the company when they receive the same, or minimally different, increases as the slacker sitting across from them.

Quick tips for creating a successful pay for performance model:

  • Define what metrics are driving your business success (revenue, number of clicks, safety, service quality, clinical outcomes, patient experience, efficiency, etc.).
  • Communicate clearly and often with employees to track their progress.
  • As part of your performance management plan, create SMART (specific, measurable, attainable, relevant, and time-bound) goals for employees.

By creating a pay-for-performance culture, employees have a clear line of sight on how their daily actions contribute to the success of the organization and the size of their paycheck, which puts organizations in a position to thrive.

To help you have productive conversations with employees regarding compensation, we have put together these tips.

Compensation Conversations – How to make them better for your managers and employees

Employees and potential candidates are more knowledgeable about salary data than ever before, either through the internet or colleagues, so ensure your organization is confident with its base pay compensation plan and understands how it compares in the marketplace. Having the ability to share with employees the process by which your organization makes pay decisions increases employee engagement and satisfaction as they feel like they are thoughtfully considered and valued.

Why is compensation communication important?
This is the time of year when you have either already administered salary increases or are getting ready to do so. And inevitably, this process brings up questions regarding pay that managers may not be properly equipped to answer. If your employees feel that your pay decisions are arbitrary or do not understand how your compensation strategy tracks back to the organization’s overall business goals, it leads to confusion and a sense of powerlessness. Disengagement naturally follows, possibly leading your employees to look for other opportunities, taking with them their skill set and institutional knowledge. Giving your managers the tools to explain base pay setting, raise increases (or no increase), reasons for differences in starting pay and wage differentials, makes conversations more productive and clear while also making the employee feel like you are being thoughtful and straightforward with your approach.

According to a study done by Mercer in 2002, when employees are well informed and communicated with clearly about the pay-setting process in their organization, they walk away feeling much more satisfied even if they don’t agree with the actual number. The bottom-line is that employees who understand the process in which pay is determined have greater engagement and satisfaction. Not to mention your managers will also feel empowered and supported during the salary review process.

Top three compensation communication tips:

  1. Communicate throughout the year – Instead of having a conversation about pay practices once a year, keep employees informed throughout the year specifically when it comes to how performance tracks to your compensation plan. Ongoing communication makes employees feel informed and empowered, and helps them understand how their actions and contributions can help improve the bottom-line – both their own and the company’s.
  2. Train your management team – Ensuring your managers have the tools they need to help roll out a compensation plan or answer questions about the plan will help to increase employee buy-in.
  3. Educate employees on their total compensation package including benefits, rewards and other items unique to your culture (such as education and development opportunities as well as work life balance programs) they receive throughout the year.

In the coming weeks and months we will be sharing tips and information for creating an effective compensation strategy, communicating compensation details with employees and developing a benchmarking process. Let us know if you have a specific question or an aspect of compensation you would like us to explore in more detail.

Do you use Independent Contractors? If so, this is a MUST read.

While the classification of independent contractor versus employees has been a hot topic for a while, it is coming to the forefront again and should be something you review for your organization right now. New York recently became the 15th state to sign the agreement allowing the IRS and Department of Labor to share information to identify independent contractor misclassifications. Washington and California signed the agreement in 2011. And we expect that businesses will continue to receive increased scrutiny in 2014 as more and more states sign the agreement. By taking the necessary steps now, you can alleviate future headaches and fines.

Test for Defining an Independent Contractor

If you are considering independent contractor as the classification for your new hire you will want to verify that the engagement meets the considerations the Department of Labor takes into account during their evaluations.

If any of these considerations are questionable, the employee classification is the likely designation.

The Department of Labor uses the following to evaluate independent contractor status:

  1. Control Factors – Independent contractors control their own work, set their own hours, obtain their own training and are generally evaluated on the end result only.
  2. Financial Controls – Independent contractors provide their own equipment and tools and have the ability to work for many employers at the same time.
  3. Relationship – The IRS looks at how the parties work together, not just whether the independent contractor pays their own taxes. They look for a verified business license, the independent contractor’s payment of taxes, the above control factors and the permanency (length of time) of the relationship.

Next Steps:

  • Analyze your current classifications and create a process for ensuring you are classifying new hires correctly.
  • Requirements may differ from state to state so research any differences for the states within which your employees and independent contractors work.
  • If you decide to use the independent contractor classification you may want to contact an attorney to ensure the classification is indeed correct.
  • Put in place a legally reviewed Independent Contractor Agreement that covers your liability and protects your organization’s proprietary information and states that the nature of the relationship is work for hire.
  • We also recommend obtaining Emergency Contact Information for your independent contractors and liability insurance that protects you from applicable independent contractor negligence.

You can learn more about independent contractor classifications here, or purchase our INDEPENDENT CONTRACTOR VERSUS EMPLOYEE CLASSIFICATION RESOURCE GUIDE (FOR WESTERN WASHINGTON STATE BUSINESSES).

Interesting Work More Important Than Money

Are you concerned compensation is what’s preventing candidates from joining your organization?

In our recent Bay Area Bioscience Recruiting Trends Survey we asked organizations to share the most effective ways in which they attract talent. And here are the results:

  1. Providing challenging or cutting edge projects
  2. The organization’s environment/culture
  3. Products and/or services offered
  4. Compensation

You read that correctly – compensation came in fourth. These results serve as a good rule of thumb as you create your hiring plan as well as your retention strategy. Happy employees (employees that are going to contribute to your organization over the long term and truly invest in the goals you are looking to accomplish) are ones that are working on projects that engage and challenge them. There are many different ways to motivate employees. The most important things you can do is check out the research available to you and then ask your employees (they know better than anyone). Until you have the projects, culture, and products candidates can get excited about, you’ll always struggle to bring in and retain quality talent.

You can check out all the results by downloading the full white paper here.

Is Your Internship Program Legal?

A new case law went into effect this summer, which is driving the requirement that interns be compensated for their work. The case is dubbed the Black Swan case, named after one of the movies in which the defendant (Fox Searchlight Pictures, Inc.) ‘employed’ interns for zero pay. In his ruling, the judge referred to a Department of Labor (DOL) “Fact Sheet” that includes six criteria that an intern program must meet.

As graduates look for opportunities to gain on the job experience and organizations look for ways to garner talent while minimizing payroll costs, it’s important to test your internship program’s legality.

The Test

In a nutshell, the law says that your intention for employing an intern should be to provide them training or job experience that they can apply to their studies or to further their career. It is key to understand that the employer should not be receiving the benefit (e.g. a free cost employee) of having the intern work for their organization and that instead it is the organization’s responsibility to provide the benefit (e.g. on the job training) to the intern.

Here are the criteria your program must meet in order for it to be legal NOT to compensate interns:

  1. The internship is similar to training, which would be given in an educational environment;
  2. The internship experience is really for the benefit of the intern, not for the benefit of the employer;
  3. The intern does not displace regular employees, but works under close supervision of existing staff;
  4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
  5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
  6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

Learn more information and view the fact sheet..

Worried your internship program might not pass the test? Send us your questions and comments below.

Hitting the Magic 50 Employee Mark Part 3 – Performance Management, Compensation/Benefits, and Human Resources Staffing

Companies who have not yet instituted a formal performance management system are likely to set this as an important goal once they hit fifty employees. In the past goal setting may have occurred quite successfully on the back of a napkin while chatting around the lunch table with everyone. However, at 50 employees this strategy becomes ineffective.

Over the past several weeks I have been sharing a series covering the changes to make and the things to consider when your company grows to 50 Employee. This is the third in the series. I welcome your comments and questions if there is anything you hoped I would cover that I have not.

Read Part 1 – Hitting the Magic 50 Employee Mark Part 1 – What You Need To Think About?

Read Part 2 – Hitting the Magic 50 Employee Mark Part 2 – More Formal, More Frequent Communications.

Performance Management & Goal Setting

Companies who have not yet instituted a formal performance management system are likely to set this as an important goal once they hit fifty employees. In the past goal setting may have occurred quite successfully on the back of a napkin while chatting around the lunch table with everyone. However, at 50 employees this strategy becomes ineffective. There are likely at least three reporting layers by this time – senior management, management/supervisory and individual contributors. The goal setting system, by necessity, must get more formal so that everyone is on the same page and supporting the same goals. The same goes with performance feedback. Employees deserve feedback and the more employees there are the more helpful feedback is to keep everyone motivated and moving in the same direction.


At fifty employees you will see changes in health plan offerings as fifty member groups is often a differentiation point for plan offerings and pricing. Incentive plans tailored to different levels or job classes tend to be implemented around this time. Formal salary analyses are occurring more regularly. Where the company previously had one engineer they may now have three or more. Internal as well as external salary equity comes in to play now. At fifty employees, companies who do not already have a formal recordkeeping system will want to begin investigating their options. It becomes very difficult to track employee changes on an excel spreadsheet. Most payroll services offer a human resources module and there are many cost effective HRIS (human resource information systems) on the market for smaller employers.

Human Resources Staffing

As you have read through this blog, you may already have come to the conclusion that many, if not most, companies that hit the 50 employee mark begin considering the addition of a Human Resource professional to help with the challenges of reaching this exciting benchmark. For some companies it takes the form of hiring an internal part or full time Human Resources professional. For others it means contracting with an external provider to provide project expertise or mentoring for an internal staff member.

Be Prepared – Questions about the DOL’s New Fee Disclosure Requirements

The Department of Labor’s new fee disclosure requirements we discussed in last week’s blog are likely to trigger questions from your employees.

The Department of Labor’s new fee disclosure requirements we discussed in our last post, The Employee Retirement Income Security Act (ERISA) – New Regulations for Employers, are likely to trigger questions from your employees. To help you determine how to respond to some of the most common questions they will ask, I sat down again with Kirsten Curry, President of Leading Retirement Solutions, LLC. Kirsten shared four scenarios that her experience says employers are most likely to encounter:

Scenario #1: Employees ask, “What are all of these new fees I’m paying?”

Because the fees have until now been hidden, the majority of plan participants believe they are not paying fees. According to DalBar, a leading independent financial research firm and a recent AARP survey, anywhere between 71% – 83% of plan participants (i.e., your employees) believe they pay no fees for their plan.

So be prepared! When they get their first quarterly statement that highlights all of these “new” fees, if you haven’t already addressed it, your employees are likely to be surprised and upset at what they see.

Scenario #2: Employees say, “I want out!”

Employees leaving the plan can affect overall plan pricing as it is generally based at least in part on the number of participants. In addition to cost, because lower compensated employees will be more likely to see the disadvantages of the plan when they consider the fees, your plan can become or have the appearance of favoring your higher level and more senior executive employees.

Scenario #3: Employees say, “What am I paying for?” and “Should I continue with this plan/is it worth it?”

What these employees are most likely looking for is a cost/benefit analysis. The information they want concerns how well the plan is performing. This is when it is beneficial to have a plan that offers Investment Advisor support at the plan participant level; someone who your employees can call to ask specific questions about their plan and their account. This person is a plan representative who can answer their individual questions accurately.

It is in your best interest to learn as much as you can about the plan (in comparison with other plans), the fees and the performance of it so that you can speak intelligently. You want to be able to say honestly and with confidence that you are familiar with the plan, have reviewed it, and that you stand by your decision to go with that plan.

Scenario #4: Employees ask, “Why aren’t you looking for a cheaper provider?”

You need to become familiar enough with your plan’s benefits to talk about why you made the decision to go with this plan provider in the first place. Understand it, believe it and say it with confidence.

Most importantly, Kirsten cautions that you do NOT make things up! If you don’t know the answer it is better to say that you don’t know (then find out and follow up) or direct them to the specific person who you have designated to answer questions. This can be somebody in your company and/or a plan representative.

Have you encountered any of these or other questions as a result of the buzz about the upcoming changes? What are you doing to prepare yourself and your employees?

Kirsten CurryAn attorney and entrepreneur, Kirsten Curry is the founder and President of Leading Retirement Solutions (LRS), a full service company retirement plan provider. Curry founded LRS with a commitment to three core principles: transparent and un-biased services; custom open architecture retirement plan solutions; and access to traditional and non-traditional investments. Her company offers consulting services, plan design, administration, recordkeeping, government reporting, and correction and compliance services.

Curry is dedicated to supporting and promoting businesses, their owners, operators, employees and investors. She is committed to providing consultative and strategic company sponsored retirement plan services for new and seasoned business operators; designed to successfully transition clients through each business cycle, assuring business and personal objectives are achieved.

The Employee Retirement Income Security Act (ERISA) – New Regulations for Employers

The Department of Labor (DOL) now requires employers/plan sponsors to provide information to employees/plan participants regarding the fees they are paying for their retirement plans.

The Department of Labor (DOL) now requires employers/plan sponsors to provide information to employees/plan participants regarding the fees they are paying for their retirement plans. It is no longer enough to rely on your plan service provider to communicate this information to employees. While they certainly may, it is your responsibility to ensure that the information is complete, clear, and easy-to-understand.

To better understand the requirements I met with Kirsten Curry, President of Leading Retirement Solutions, LLC. She offered the following tips for employers to help get them prepared for the change:

What you need to know:

Important dates:

– July 1, 2012: all service providers must disclose all fees to plan sponsors.

– August 30, 2012: the participant assessed fees must appear on participant statements.

It is in your best interest as an employer to make certain that your employees are not surprised by the information they will see. They are more likely to read a communication from you explaining what will change than from their retirement plan provider. You have the opportunity to present the information in a transparent way that will help maintain the trust you have built with them. Start preparing now for questions your employees may ask.

Here are four steps to get you started:

  1. Obtain information from plan
  2. Compare the investment options to other plans
  3. Consider changing service level
  4. Reconsider how plan fees are paid

At each of these steps it is advised that you make certain that you understand and document your evaluation process and decisions.

Make certain you know not only what information your employees will receive from the plan, but what it will look like so you know where you will be required to provide information and possibly where you want to provide “translation” into language that your employees will understand.

Contact your service providers to arrange for support. Make sure you are as up to date as possible on the details of your plan including an understanding of what the fees are for, what services you are getting for the money, and why you went with the service you did in the first place. You also want to have some understanding of how the plan is performing, if only generally. You should have direct and quick access to a plan representative that is willing to take the time to speak individually with each of your employees to explain how their particular plan is performing.

Kirsten cautions you to not be surprised if your plan representative tells you that the information they are providing is still preliminary. It is! The Department of Labor has yet to adopt the regulations. Also, don’t wait for the final draft is adapted by the DOL as it is not uncommon for them to wait until the last minute to provide final information. Learn what you can to get as prepared as you can by asking to see preliminary information. You do not want to wait until the last minute. It is entirely possible that, based on the regulations, you will be required to implement the changes before they are adopted by the DOL. This is nothing new for the plan representatives, who will be prepared to work with you now.

In our next blog I will be sharing employee scenarios/questions you may face as you roll out this change. We want to hear from you – let us know what you are doing now to plan for this change. And if there are specific employee questions and scenarios you think you may need to address.

Kirsten CurryAn attorney and entrepreneur, Kirsten Curry is the founder and President of Leading Retirement Solutions (LRS), a full service company retirement plan provider. Curry founded LRS with a commitment to three core principles: transparent and un-biased services; custom open architecture retirement plan solutions; and access to traditional and non-traditional investments. Her company offers consulting services, plan design, administration, recordkeeping, government reporting, and correction and compliance services.

Curry is dedicated to supporting and promoting businesses, their owners, operators, employees and investors. She is committed to providing consultative and strategic company sponsored retirement plan services for new and seasoned business operators; designed to successfully transition clients through each business cycle, assuring business and personal objectives are achieved.

Select the Right Salary Survey for your Company

According to a recent Society of Human Resource Management survey, “salary is by far the leading cause of employee dissatisfaction among U.S. workers,”. Given this statistic, it makes sense that employees want to know how their company determined the salary for their position. Employers who deliberately select the appropriate salary survey can be confident about their response to employees and where their salaries lie in relation to the market average.

The key is to be strategic about selecting the appropriate survey for your company, industry and your workforce. There are many to choose from as evidenced by a quick online search. To help you develop a deliberate approach, we’ve compiled a list of questions that will help you with your salary survey selection process:

  1. Do you have management support? Purchasing a survey can be costly. It is important that your management is educated about why the survey is necessary and how the data will benefit the company.
  2. For which jobs are you seeking salary data information? The type of job you are benching can narrow down your search. Ask yourself the following questions:
    1. Where, geographically, do I recruit to find the most qualified candidates for specific jobs? – locally, nationally, internationally?
    2. Which companies/industries employ people in the same positions? Another way to arrive at the answer is to ask, “To what companies/industries do I lose my employees”? – private, public, large, small, start-ups, mature. Type of industry – research, manufacturing, government, retail, etc.
    3. What types of jobs do I need data on?
      • Generic jobs that cross employer segments like Receptionist, Accountant, and IT Help Desk are generally easier to find data on than positions that are specialized like Biotech Pharmacology Associate, Environmental Safety Engineer and Microchip Manufacturing Manager. The specialized positions may only be found in industry or job specific surveys. In addition, because there tend to be fewer qualified candidates a company must cast a wider net to find them. This means that you may need a survey that provides national and international data cuts.
      • Do I need senior management and executive position data? Because higher-level management positions often require additional data like long-term incentive, stock, revenue and operating budget, they often are found in “executive compensation surveys”.
  3. Where can you find the best survey based on the questions you have answered in step 2 above?
    1. Search the internet
    2. Call colleagues in your industry and inquire about which surveys they participate in
    3. Contact professional associations like American Electronics Association (AEA), National Pharmacy Technician Association (NPTA), National Association of Manufacturers (NAM)
    4. Contract with a third party to locate an appropriate survey

What has been your experience with salary surveys? How often do you update your salary data? We love hearing from our readers. Please respond via the comments area below.

Paycheck Fairness Act: How Fair Are Your Practices – The Sequel

At the beginning of this year, I introduced you to Lilly Ledbetter and the Lilly Ledbetter Fair Pay Act. As early as this Wednesday, November 17, 2010, I might be introducing you to Lilly’s bigger and more formidable sister, the Paycheck Fairness Act. This is the date that the U.S. Senate is currently scheduled to vote on this legislation which, if passed, will have drastic effects on wage and hour laws. Regardless of its passage, it raises a good question as to how fair and equitable your current pay practices are.

>> READ MORE about the Paycheck Fairness Act >>

Salary Increase? – How to Answer the Raise Question During Tough Times

The economic status of many companies has been challenged over the past year and a half. Many companies reacted by scrutinizing the budget and slashing line items to help them “get through” this tough time. Most of these organizations decided raises should be among the first to go. Whether these were merit based or just an annual cost of living increase, these organizations went through the exercise of weighing out the pros and cons of “freezing” this annual salary change.

>> So, how do you respond to an employee who is requesting a raise?

Payroll Cost Control Strategies: Lifting a Wage Freeze

Last year, wage freezes were widespread among employers looking to control costs. Now as the economy begins to recover, many employers are looking to lift those freezes.
>> Employers Are Beginning to Lift Their Wage Freezes >>

Benchmarking – The Compensation Building Block

Benchmarking is a skill that every human resource practitioner involved in the compensation process should perform efficiently and correctly. Accurate benchmarking is the foundation of appropriate salary assessments and market comparisons. If one benches internal positions incorrectly it may result in selecting the wrong market salary data and setting an inappropriate salary which in turn creates employee dissatisfaction and a higher turn over rate. Clearly, this is a skill that impacts your organization.

The definition of benchmarking for salary survey purposes is “matching an internal job to an external job of similar content”. The goal is to match each job being performed in your company to the survey benchmark job that most closely resembles the essential functions of that job. Once this is accomplished one can then review the market salary data to determine market rates.

>> How To establish effective benchmarks >>

Lilly Ledbetter Fair Pay Act: How Fair Are Your Pay Practices?

Do you know who Lilly Ledbetter is? Well, you’re about to get to know her story and the impact that she has made in the workplace. She is an Alabama woman who lost her pay discrimination case at the Supreme Court on the basis that she had not filed her discrimination charge in a timely manner. On January 29, 2009, President Obama overrode that Supreme Court decision and signed into law the Lilly Ledbetter Fair Pay Act.

How Could The Lilly Ledbetter Fair Pay Act Affect Your Company?> >>

Executive & Employee Bonuses: No Merit Pay Increase?

Many companies are beginning to look at year end results. Were business goals achieved? How does 2010 look? Do we need to re-forecast goal initiatives? Often times, current year outcomes dictate merit increases the following year. When a decision is made to implement or continue a salary freeze due to business need, communicating this news effectively can be difficult.

Educate your staff on business requirements and results. Employees have an easier time buying into something once they understand why. If a company simply states the salary freeze with no information, the negative impact can be quite severe. No one likes to hear their hard work isn’t going to be recognized with a salary increase but recognition can take others forms. Increased visibility and input into the business as well as spot awards of time off are examples of recognition always appreciated.

As you prepare your message, ensure all employees hear the same news and can trust its truthfulness. Respect your staff by giving them as much information as possible and solicit their ideas. It is during difficult times that some of the best ideas surface.

Protecting Fiduciary Responsibility – Increased Accountability In Our Soft Economy

Directors & Officers Insurance

We hear much lamenting about “these days”, but let’s not miss the positive trends afoot. People are donating their time and energy to boards and non-profit organizations. People are more aware of their responsibility to be “part of the solution”. And those in decision-making roles, both in non- and for-profit organizations, are being held more accountable for their actions.

READ MORE >> Now is the time to review your corporation or organizations D&O insurance.

RIF (Reduction in Force) Alternatives

“Dial 911 – company in distress! The economic climate has driven us to death’s door. We need immediate attention before we go in to fiscal failure. Please send help!”

The aid car was sent and for many ailing companies, the immediate response/cure to the “fiscal failure” was the dreaded RIF (reduction in force). Now many of those same companies are starting to stabilize but are still in intensive care. They want to move out of intensive care and back to a healthy state of being. They are stabilized enough to consider alternatives other than a RIF.


Best Recruiting Practices During a Down Economy

By now, most recruiting managers are dealing with the impact the economic downturn has had on both recruitment and talent management. During the “good ol’ days”, hiring managers and recruiters spent a majority of their time seeking out the best talent from small candidate pools. Now, we have large candidate pools coupled with a limited number of openings and in some cases, no openings. How can you make sure your organization’s recruitment practices are aligned with current economic challenges and your business goals? Read more best recruiting practices

Investing Employee Compensation in Product Development

Companies are looking for solutions to increase employee loyalty, eliminate layoffs and determine clever funding for product development in the absence of outside investment opportunities. When clients face these challenges, we often discuss ways to increase employee ownership in the business. Read more for innovative compensation ideas

Tweaking Employee Benefits During Hard Times

As we continue to see reports of companies cutting jobs, it’s important to think about creative ways to proactively work toward keeping your work force in place, yet addressing the economic needs of the company. We’d like to generate some ideas and discussions on what employers can do to mitigate this situation, starting with employee benefits. Read more about tweaking benefits