MERIT BUDGET ALLOCATION

A primary goal of any compensation program is to motivate employees to perform at their best. Most organizations have pay for performance at least in the form of a merit pay system. An accurate, reliable and credible performance-appraisal program that is aligned with company goals, core values and industry best practices is the foundation of a successful merit pay program. Performance measures should be tailored specifically for the organization and its jobs with clear outcomes that minimize bias and misinterpretation. Consistency, manager training, effective communications and a periodic review are also essential for success.

The merit pay budget has two aspects to it: 1) determining the size of the budget and 2) allocating the budget to organizational units and its employees. Determining the size of the budget will be based on competitive trends, the organization’s financial situation and other factors that may impact pay such as minimum wage and cost of living changes. For the past several years merit budgets have been small and therefore it has been a challenge to adequately reward top performers as well as those that are rated ‘Good’ and ‘Average’. Employees with performance ratings of ‘Good’ and ‘Average’ can be the largest percentage of employees and therefore the backbone of the workforce. These employees should not be overlooked but raises for these employees often do not keep up with the cost of living. Also the differentials between performance levels may not be large enough to motivate and retain employees. These factors reduce the motivational potential of the merit pay program.

Using a merit increase matrix may help to maintain internal equity but may not properly reward top performers. You want your reviewing managers to be engaged in the merit award process and to give appropriate thought and consideration to their pay decisions. A certain amount of guidance and training is needed but the merit matrix can be too structured and rigid as well as make it too easy for reviewing managers to simply follow the formula rather than spend the time and effort for a thorough review. Greater rewards for top performers and greater deviation of awards between good and average performers can be accomplished by providing zero increases to employees whose performance falls below average. Providing broad increase guidelines in lieu of a matrix to your reviewing managers using factors such as performance rating, time in position, and position in salary range can eliminate the rigidity of the merit matrix and drive a more thoughtful approach to the merit award process. Once tentative award amounts are determined, reviewing managers should perform an analysis of the awards looking at the whole department and at each individual award using these and other factors as well as any unique or special circumstances.

Annual pay increases not only help keep employees’ pay at market, providing awards that are accurately linked to performance are important in retaining employees, especially your best ones. Compensation frequently emerges as a driver of retention, and when pay increases aren’t provided regularly and fairly, it will negatively impact job satisfaction.

At WageWatch our compensation consultants are focused on your organization’s compensation needs and ready to help you ensure that your compensation programs are supporting your company’s business strategy and objectives and that your pay practices are fair, equitable and non-discriminatory. We can provide your business with compensation surveys and salary reports to help you establish a budget for your merit pay program, including bonuses and incentives. Our innovative company is a leader in the collection of data for surveys and salary reports, which allows us to provide services to a wide range of industries in both the private and public sector. To learn more about our compensation surveys, salary reports, and other services please call 480-237-6130 or contact us online.

ALIGNING COMPENSATION WITH COMPANY CULTURE

Many organizations today are focusing on their company’s culture including determining their culture, deciding what it should be, aligning with strategic goals and transitioning to the desired culture. Culture is important because it reinforces the values of the organization, which in turn shapes team members behavior. There are many success stories of companies with cultures that are aligned with their business goals including Google, Zappos, and Patagonia. These companies have not only developed a culture that supports their business but has fully embraced their culture.

Organizational culture is the collective behavior of the people who are part of the organization and has important effects on the morale and motivation of the organizational members. It includes the values, norms, systems, beliefs, attitudes, and habits of the organization and affects the interactions of the employees with each other, and with customers. Even before you define it, you know it is there and that it has an impact on your business. This is why it is so important to internalize the culture and understanding when company activities are in sync or not with the culture.

Once the company values and desired culture are defined, compensation can support and help drive the values and corporate culture. It is important that the role of compensation in an organization and the compensation strategy are also defined. For example, where does the organization want to set pay levels in comparison to the competitive market? Perhaps the organization’s culture is strong on training and developing its employees, acknowledging their successes and offering advancement opportunities. This, in turn, may allow the organization to set lower pay levels than what is paid in the market. Of course, when recruiting it is important to align the compensation strategy to support the values of the culture through highlighting performance management, performance appraisals and the goal setting process for each team member.

Once values, business objectives and desired behaviors are determined then compensation plans can be put in place to support the culture. For example, if the business objective is innovation and the desired behavior is risk-taking, then short-term incentives may be the compensation strategy. If the goal is for a highly-trained workforce and the behavior is learning and upgrading skills, then skill or competency-based pay may be the compensation strategy.

Corporate culture is about people’s behaviors – how goals are accomplished – so to establish a culture that drives company success, organizations should link a significant component of their compensation systems to behaviors.

At WageWatch our compensation consultants can assist with your organization’s compensation needs and help you ensure that your compensation programs are supporting your company’s business strategy and objectives. WageWatch also offers accurate, up-to-date benefit survey data, market compensation data and salary reports that will allow you to stay current with the times. This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards. For more information on our services, including consulting, salary survey data, benefit survey data and market compensation reports, please call WageWatch at 888-330-9243 or contact us online.

AUTOMATION OF THE HOTEL EXPERIENCE IS THE FUTURE

(Note: The following article was published in the June 7, 2017, Hotel News Now magazine; it was written by Randy Pullen, the founder and current CEO/President of WageWatch.)

Artificial intelligence and robots are here, and increasingly will be able to do much of the work in hotels. Coming to terms with that can help manage fears and uncertainty.

Hotels are on the edge of a new era driven by automation, artificial intelligence (AI) and robotics. Of course, I am not the first one to say this as there are many published articles extolling the virtues and sins of automation in the workplace and AI technology in the hotel industry.

Automation of guest messaging, mobile check-in and check-out, room assignments, motion detection, mobile key cards and facial recognition are already in service in many hotels around the world, and this is just the beginning.

A futuristic view is provided by Hideo Sawada, president of Sawada Holdings Co., which built the Henn na Hotel in Japan—Henn na is Japanese for “weird,” so this is the “Weird Hotel”—as a futuristic hotel and as a novelty add-on to an existing amusement park. The Weird Hotel is an automated limited service hotel, in operation though it has a few glitches that need to be worked out. Interestingly, it is not that highly rated by guests, but they keep coming to experience the future.

Tractica, a market intelligence firm focused on AI and robotics, forecasts global robotics market revenues to grow from $28 billion in 2015 to $151 billion a year by 2020. They predict the majority of the growth will come from “non-industrial” robots.

Tractica’s forecast does not include the future growth of AI and its impact on robotics. When you add AI to robotics what you end up with is a friendly robot that can learn and adapt to changes in the workplace. Both PricewaterhouseCoopers and McKinsey & Company have researched and written several white papers on the rapid advancement of AI and automation, and their coming impact on the workplace. In a study issued in March, PricewaterhouseCoopers estimated 38% of jobs in the U.S. would be automated by the early 2030s. For the accommodations and food service sector, they estimated that 25% of jobs would be automated.

While 25% of the jobs in the accommodations and food service sector amounts to more than 3.3 million jobs being automated, this is low when compared to other studies. A report issued by McKinsey & Company in July 2016 calculated that, of all industrial sectors, the potential for automation is the highest in accommodations and food service. According to that analysis, 73% of the activities performed by workers in accommodations and food service have the potential for automation. Essentially, up to almost half of the jobs in hotels and restaurants could be automated in the next decade and a half.

Both studies likely underestimate how rapidly AI and automation will transform the workplace and our personal lives. It is not possible to predict with accuracy the speed with which new technologies will advance. Disruptive technologies such as desktop computers and smartphones changed the workplace and our personal lives much faster than predicted when first introduced into the marketplace. I predict the assimilation of AI and automation into our lives will happen much quicker in what is now being called the Fourth Industrial Revolution.

Klaus Schwab, executive chairman of the World Economic Forum, stated in his address to the Forum in January 2016: “We stand on the brink of a technological revolution that will fundamentally alter the way we live, work and relate to one another.” He goes on to say, “This will give rise to a job market increasingly segregated into ‘low-skill/low-pay’ and ‘high-skill/high-pay’ segments, which in turn will lead to an increase in social tensions.” I believe his is a linear projection of the future, not taking into consideration how human beings rapidly adapt to a changing environment.

As we have already seen, it is not just low-skill/low-pay jobs that are impacted by AI. Wall Street is going through a transition as financial advisors are being replaced by software programs with algorithms that make reliable, profitable investment decisions faster and with more accountability than humans. Speaking of accountability (note, I am a CPA), much of what accountants do is very susceptible to automation—audits, inventory tracking, supply chain automation and tax returns, just to name a few.

Hotels have already automated or are in the process of automating repetitive tasks for personal and work activities, and the rate of adoption is accelerating at a pace that was unimaginable just a few years ago. For the hospitality industry, all levels of the business—including the front of house, back of house and administration—are susceptible to automation in total or in part. Automation and AI are and will become the driving forces in the lodging industry, as management companies and team members learn to adapt and apply the new technology to improving the guest experience at their hotels.

As automation and robots with AI become the 800-pound gorilla in the workplace, the uncertainty of what people will do if their jobs disappear is always a fear. No doubt there will be a shift in jobs; however, new conditions create new opportunities. During the first Industrial Revolution, as people moved from the farms to the cities to work in factories, there was much turmoil; but in the long-term, the outcome was good as more jobs were created than lost. People learn to adapt to change and move from the old to the new as their expectations for the future change. We only need to look to our children to see the future. Kids say the future of tech is robots.

ADVANCED COMPENSATION ANALYSIS

In order to stay in line with industry trends and economic ups and downs, salary ranges should be compared to market each year. Adjustments to salary ranges may not be needed every year. Depending upon how fast or slow the market is moving, adjustments normally are needed every 2 – 3 years. During your annual salary range to the market analysis process, make notes and keep a record of any changes or movement that you see with any jobs and departments from year to year. It is prudent to avoid making changes to your salary ranges for temporary fluctuations or anomalies. Look for trends that are long-lasting.

In addition to an external compensation analysis to market, an analysis should be performed to identify internal pay inequities that could potentially become the focus of an OFCCP audit. Pay inequities should include women statistically paid less than men and/or minorities statistically paid less than non-minorities. Records should consistently be kept regarding all pay decisions to determine whether there are legitimate business reasons to support the pay patterns that exist in those areas. The results of this analysis will not necessarily be used to adjust individual employee compensation. Rather, the analysis results should be used to target areas where suspicious statistical pay patterns exist.

Since the purpose of the analysis is to anticipate areas potentially of concern to OFCCP, start the analysis with the salary grades or levels as these are most often used as the units of analysis by the OFCCP. You will need to determine which unit or units of analysis most appropriately reflect how compensation is administered. The objective is to find potential problem areas by targeting employees who would reasonably be expected to be paid on the same basis due to factors such as job grade, market location, and business unit.

Though the OFCCP will typically use median to perform analysis and determine pay inequities within pay grades or other units. A thorough compensation analysis should include:

Median and mean analyses (to identify areas of OFCCP concern): In each pay grade compare the median and mean of women and men and of minorities and non-minorities.
t-Test analysis: This test will determine whether the observed differences in pay within the grade levels are statistically significant. Results of the t-statistic (t-Stat) in the t-Test are considered to be statistically significant if they are 2.00 or greater representing differences of two or more standard deviations.
Regression analysis: Any unit where the differences in pay are statistically significant a regression analysis should be performed. Factors that influence grade levels such as time in service, time in a level, time in the job, department, education, and performance can be incorporated into the regression.
Cohort analysis: Perform this analysis where it has been determined that the differentials are statistically significant, and where the regression analysis has not accounted for the differentials. A primary cohort analysis would normally be completed on job titles within grades, across department designations and within departmental designations. Each of the various job titles within the database would be sorted by grade, job title, and then base salary from highest to lowest.
Outlier report: The average salary of protected class of employees is compared to the average salary of the non-protected group within a salary grade and/or job title. When a protected employees’ average salary falls below a set percentage of the non-protected, this should be flagged for further review. This analysis identifies protected employees who are at the lower extremes of the salary range.

At WageWatch our experienced compensation consultants can assist with your organization’s compensation needs. We can help you ensure internal equity and compliance with regulations as well as help you structure your compensation programs to support your company’s business strategy and objectives. WageWatch also offers accurate, up-to-date benefit survey data, market compensation data and salary reports that will allow you to stay current with the times. This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards. For more information on our services, including consulting, salary survey data, benefit survey data and market compensation reports, please call WageWatch at 888-330-9243 or contact us online .

DOCKING EXEMPT EMPLOYEE PAY

The application and rules for the federal FLSA salary basis test are often misunderstood and not administered accurately or consistently.

First, let’s understand what the term “salary basis” means. An exempt employee that regularly receives a predetermined amount of base salary each workweek is paid on a “salary basis”. This applies to employees who are determined to be exempt under the federal FLSA exemption tests including both the minimum salary test and qualifying under one of the duties tests (i.e., administrative, executive, professional, outside sales, etc.). The minimum weekly salary that must be paid to ‘exempt’ employees under the federal rules is $455. Please refer to your federal and state wage and hour for exceptions to the salary requirements. The salary basis pay requirement for exempt status does not apply to some jobs (for example, doctors, lawyers, and schoolteachers are exempt even if the employees are paid hourly).

Now let’s talk about the Salary Basis Test. An employee’s ‘exempt’ status can be jeopardized if the salary basis test rules are not followed. The Salary Basis test provides rules regarding what pay deductions can and cannot be made to exempt employees’ weekly base salary. Generally, the predetermined weekly salary cannot be reduced because of variations in the quality or quantity of the employee’s work. Except for a few permissible deductions, an exempt employee must receive the full base salary for any work week in which the employee performs any work, regardless of the number of days or hours worked. This includes any work done remotely such as checking email and voicemail. An employer cannot make deductions from an employee’s predetermined base salary, because of a business slowdown or lack of available work.

The FLSA salary basis test applies only to reductions in monetary amounts. Requiring an employee to charge absences from work to leave accruals is not a reduction in “pay,” because the monetary amount of the employee’s paycheck remains the same.

Full Day deductions from pay are permissible when an exempt employee:

Is absent from work for one or more full days for personal reasons other than sickness or disability
For absences of one or more full days due to sickness or disability, if the deduction is made in accordance with a bona fide sick leave or PTO plan, policy or practice of providing compensation for salary lost due to illness
To offset amounts employees receive as jury or witness fees, or for military pay
For partial week worked during the initial or terminal week of employment
For weeks in which an exempt employee takes unpaid leave under the Family and Medical Leave Act,
Deductions in pay are also permitted for intermittent FMLA leave when the weekly base salary is reduced to coincide exactly with the reduced work week
When an exempt performs no work for a full workweek.

For the following two permissible deductions, you should have communicated formal policy(s) detailing disciplinary procedures:

For penalties imposed in good faith for infractions of safety rules of major significance
For unpaid disciplinary suspensions of one or more full days imposed in good faith for workplace conduct rule infractions

It is important that as an employer, you have a clearly communicated policy permitting or prohibiting improper deductions from exempt employees’ base salary including a complaint mechanism and reimbursement to employees when improper deductions are made. You should also have a clearly communicated policy for your exempt employees stating that under no circumstances should work be performed during unpaid time off. The exempt status of your employees will be safe as long as you have clearly communicated policies in place, make good faith efforts to comply with the salary basis test and can show that willful violations have not been made. For full details regarding federal FLSA, visit http://www.wagehour.dol.gov and links to your state labor department can be found at http://www.dol.gov/whd/contacts/state_of.htm.

At WageWatch our compensation consultants are focused on your organization’s compensation needs and ready to help you ensure that your compensation programs are supporting your company’s business strategy and objectives. WageWatch also offers accurate, up-to-date benefit surveys, salary surveys and pay practices data that will allow you to stay current with the times. This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards. For more information on our services, including consulting, salary survey data, benefit survey data and market compensation reports, please call WageWatch at 888-330-9243 or contact us online.

EFFECTIVE NEW HIRE ORIENTATION

An employee’s experience during their first few days will affect the rest of their tenure. It is critical, to begin with, an effective, positive, and fun new hire orientation for the future success of your new employees. Even before the employee’s hire date, you can make a positive impact with a call to the employee two or three days before their start date, welcoming them, letting them know what time to arrive, and what they can expect during their first day and first week on the job. Studies show that a well-planned orientation can contribute to the length of employment, better work attitudes, more effective communication, and fewer mistakes. Your new hire orientation is your chance to set a positive tone for a long-lasting and mutually beneficial relationship.

A new hire’s early experience is highly influenced by his peers, managers, subordinates, HR team members, and the organization’s top management. Ensure that new hires are welcomed by their team members. Plan a welcome breakfast meet-and-greet for their first morning on the job. The new hire’s immediate supervisor should schedule daily meetings with the new employee at least for the first week, then at least weekly for the first month or two. Schedule informational meetings with key people in the department and in other departments to provide the new hire with the general knowledge that they will need to perform their job. Include an office tour in the orientation process that includes introductions. Be sure to include introductions to top Executives, Human Resource personnel as well as receptionists, administrative assistants, and copy/mail room attendants.

An effective orientation program will put emphasis on the new employee, their individuality and what they have to offer rather than focusing solely on the company’s culture and how the new employee can fit in. You are probably hiring in part to get new ideas into the organization. Make sure to capitalize on that. Make your orientation meetings fun and be sure to provide a meal or at least snacks. Keep it interesting and not too long. Too much information will be boring and will not be retained. Orientation should reflect culture through interactive activities. One way to make it memorable is to present the company’s goals, mission, and values in an interactive activity rather than simply providing the information. Allow the new hires to get to know each other on a personal basis, not just professional – go around the room and have them tell one professional and one personal thing about themselves. You can also turn this into a game by writing one thing about each person on a piece of paper. At the end, state items one at a time out of order and have people guess who said what.

Promote communication with a team building activity such as learning the employee handbook through a scavenger hunt. For example, divide the orientation group into teams and see which team can answer the most handbook questions in a set amount of time. Cover company ethics to let them know what is expected, and also include ‘unwritten rules’. Don’t end there. After orientation, schedule follow-up meetings with each new hire to gain their feedback and answer any follow-up questions they may have.

Don’t forget the basics. Provide them with all the office supplies they will need to start their job, include contact information they will need. And let them know how to get additional office supplies. Teach them how to use the phone, how to forward calls, set up and change voice mail, and how to do a conference call.

Today, many companies are adding programs such as flex-time, telecommuting as well as accommodating and encouraging alternative work styles in an effort to provide a work environment where employees are happier and thriving. Therefore don’t neglect or underestimate how impactful beginnings are, and provide your new hires with an orientation program that is effective and unique to your company and its culture.

Implementing the above suggestions will help your company to build a culture that encourages retention of employees, which in turn will attract top talent. In addition to providing a great work environment that respects employees and provides opportunities for learning and growth, it is also important that they receive a solid compensation and benefits package. At WageWatch we offer accurate, up-to-date benefit survey data, market compensation data and salary reports that will allow you to stay current with the times. This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards. For more information on our services, including consulting, salary survey data, benefit survey data and market compensation reports, please call WageWatch at 888-330-9243 or contact us online.

IT’S TIME TO ADJUST YOUR SALARY STRUCTURE

Maintaining a salary structure that aligns with the organization’s pay philosophy and is competitive to the labor market is imperative for any organization. Most organizations update their salary structure every one to two years, as budget permits. However, during the recent recession, some organizations chose not to increase their salary structures for cost containment and/or a lack of competitive pressure to do so. For 2017, the stronger U.S. economy and increased employer confidence should continue to bolster job gains, and economists expect the previously sluggish wage growth to accelerate. Whether or not you’ve adjusted your salary structure during the past few years, it is certainly time to do so now.

The review of your salary structure should determine whether it is still aligned with the company’s needs, pay philosophy and the labor market. Salary structure adjustments maintain the structure’s competitiveness with the external labor market and protect an organization’s ability to compete in the market place for talented employees. If the salary structure gets out of sync with the overall labor market, a company may find itself paying employees too much and needlessly increasing operating costs, or paying employees too little and having difficulty attracting and retaining talent. Salary-structure issues are less expensive to address early on so it is best to review your salary structure annually for any needed changes. If you wait two or three years to review and adjust, the labor market can move significantly upward in that period of time and the cost of salary range adjustments and resulting salary increases can be substantial.

Other business changes and events may warrant a review of the salary structure, such as the company’s merger or acquisition, or a competitor opening or closing a facility that impacts the company’s operations. At times during the year hiring managers may alert you to possible salary-structure issues and their insight can indicate that specific areas of the salary structure are out of alignment. But there may be other factors that the manager is not aware of, such as an organization’s strategic decision to set pay levels above or below the market median.

There are two basic methods for updating your salary structure and many companies will alternate the two methods, performing the ‘quick’ adjustment one year and the ‘in-depth’ adjustment the following year.

The Quick Adjustment method is where you collect and consider trend or annual merit increase information, then adjust your ranges by a percentage you view as necessary to remain competitive. Trend and annual merit increase surveys are published every year and most companies rely more on average or median salary increase figures.
The In-Depth Adjustment method is where you select a representative sample of benchmark jobs using currently published compensation surveys for your competitive market. Collect the competitive salary data, and then compare your salary range mid-points to the market medians or the percentile that you chose to compete with for the benchmark jobs. The results will help you determine the degree to which your ranges should be adjusted and also identify any jobs or job families whose pay is moving at a different pace than the rest of the market and may need re-graded. This methodology requires more data and time to complete.

Alternating annually between these two methods should maintain competitiveness, cost efficiency, and save time from performing the In-Depth Adjustment analysis every year. Any resulting increases from the structure movement should be minimal and workable within the current budget year.

It is also important to remember that established pay grades, the jobs’ placement within the pay grades and well-maintained job descriptions are the nuts and bolts of the salary structure. Companies change over time and job functions and duties can also change. Keeping job descriptions accurate and reflecting the core duties of each position will be essential to appropriate and competitive salary ranges and pay.

Companies should consider the reassessment of their salary administration programs, along with all of their compensation plans, as a vital and ongoing part of the program’s success. Assessing the program to ensure that it continues to meet your company’s needs is perceived as a credible and functional part of the Human Resources process, and will enhance your company’s ability to remain a competitive force in the marketplace. When was the last time your organization reviewed its salary structure(s)?

At WageWatch, we offer accurate, up-to-date benefit survey data, market compensation data, salary reports and consulting services that will allow you to stay current with the times. This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards. WageWatch, Inc. is the leading compensation survey provider for the lodging and gaming industries with 6,000 properties participating in its PeerMark™ Wage Survey. WageWatch also conducts compensation surveys for other business and industry segments including healthcare and non-profits. For more information on our services, including market compensation data, benefits survey data, salary reports, and consulting services, please call WageWatch at 888-330-9243 or contact us online.

BUDGET SEASON: ARE YOU PREPARED?

It’s that time of year again when companies are preparing their budgets for the upcoming year. For HR professionals, it is probably not one of your favorite tasks, but by embracing the process, it can be an opportunity to reinforce the HR function as a strategic partner.

Budgets are used to monitor progress toward goals, help control spending, and predict cash flow and profit. The challenge is predicting the future 100% accurately and in turn developing effective budgets.

It is valuable for HR to gain a strong understanding and appreciation for the value of good annual budgeting. In most companies, employee costs constitute the majority of fixed costs and therefore the HR budget contains key and critical elements of the overall company budget.

Here are a few things you can do to make the budget process a smoother one:

Throughout the year, ensure to include the CFO when reviewing such things as pay increases with the CEO. This can go a long way to developing a partnership with the CFO.
The credibility of the HR function is significantly improved when you can demonstrate real savings and value for HR projects and processes.
Empower your HR team. Every HR team member should own their line items in the budget. For example, recruiting is responsible for their search firm fees, recruiting tools, and relocation.
Link the development of your budget to corporate strategy. This gives a clearer understanding of strategic goals. And, in turn, should create greater support for the goals, and, a stronger company-wide performance. The key to linking the two is communication. In order to communicate strategic goals, top management needs information about customers, competitors, technology, etc., and this information must come from support units such as Human Resources.

Budgeting requires the collection of many forms of data. From a human resource perspective, listed below are some items that would be included in the budget:

Recruiting

Advertising & agency fees
Employee referral program
Background checks / drug testing
Recruitment expenses
Applicant tracking system costs

Training

Training programs
Travel expenses
Consulting fees

Compensation and Benefits

Payroll costs
Salaries & overtime
Compensation surveys / benefit surveys
Incentive compensation
Health and welfare benefits
Retirement plan
Employee assistance program

Employee and Labor Relations

Recognition program / Service Awards
Employee Opinion Survey
Performance appraisal software
Employment and Labor relations expenses (attorneys, consultants)

Other

Strategic planning (data/consultants)
HR databases such as HRIS/subscriptions/memberships/books

At WageWatch our compensation consultants can assist with your organization’s compensation needs and help you ensure that your compensation programs are supporting your company’s business strategy and objectives. WageWatch also offers accurate, up-to-date benefit survey data, market compensation data and salary surveys that will allow you to stay current with the times. This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards. For more information on our services, including consulting, salary survey data, benefit survey data and market compensation reports, please call WageWatch at 888-330-9243 or contact us online .

TO CHECK OR NOT TO CHECK: A BACKGROUND CHECKS PRIMER

Conducting thorough pre-employment background checks are a critical tool in mitigating new hire risks. There are many types of background checks available to HR professionals that can be conducted in-house or externally by vendors who specialize in employment screenings. HR professional should take a strategic view of onboarding as a process. By doing so, several layers of checks and screenings are implemented to best reduce new hire risks. It is the old adage that the result is more than the sum of its parts.

The new hire selection process starts with the job advertisement or announcement. The announcement needs to be designed to attract specific skills and behaviors while discouraging those without. Posting in the advertisement that the position requires a drug test or criminal background check is a potent deterrent. Those still interested should be directed to a job application that captures information that will form the groundwork for the pre-employment screenings in the next recruitment phase.

The EEOC enforces Title VII of the Civil Rights Act; Age Discrimination Act; Title I of the Americans with Disabilities Act; Equal Pay Act; and Title II of the Genetic Information Act. Employers are welcome to use all manner of pre-employment screenings – as long as they comply with EEOC standards. None of these Acts directly prohibit employment discrimination based on credit information, conviction records, previous employment, education, or psychological/behavioral profiles. However, the EEOC has a published a Compliance Manual and provides guidance on a number of pre-employment scenarios, because of the disparate impact facially neutral policies can have on these numerous protected classes.

This is the tightrope that causes many HR professionals to gloss over background checks out of fear of inadvertently triggering an EEOC investigation. What you don’t know, can hurt you. HR has a duty to the company to traverse this tightrope and understand the often gray and contradictory playing field (between state and federal guidelines) in which they conduct pre-employment screenings.

Criminal Background Checks – Treat each criminal record individually in the context of the job sought, work environment and conditions, and risk to the organization. Ask the candidate about the situation. Deliberate omission and lies can be used a basis to disqualify the candidate.

Credit Check – Most commonly used for positions that have are executive level, have financial responsibility, or have access to confidential information such as social security numbers to reduce the risk of theft or embezzlement. Allow candidates the opportunity to explain negative results as some reasons, such as medical bills, are protected.

Physical/Medical Exam – This screening is allowed only after a conditional offer of employment is extended and is used in specific jobs that require a proof of fitness in order to safely perform duties. All candidates in the job category are required to have the same medical examination. The candidate medical history is confidential and must be kept separate from employment records. HR professionals need to keep in mind that the medical examiner does not make the final hiring decision.

Motor Vehicle Record – This is a critical check for positions that are required to operate a company vehicle as part of the job requirement. In some states, DUI convictions are kept with the DMV not the criminal court system. There are vendors that make multi-state verification easier by consolidating searches.

Work & Education History – Past performance is a strong indicator of future performance. The goal of the work history and education background check is to establish that the glowing resume represented to the recruiter is factual and accurate. On education, check with the governing body on the authenticity of the degree. We recommend asking for full transcripts for recent graduates with a short work history.

As a company, it is important for you to understand the new regulations set forth by the EEOC and implement them in your hiring and workplace practices. Additionally, for the good of your employees, it is helpful to analyze benefits survey data, compensation surveys, and salary reports. Having this information at hand allows you to plan a budget, including competitive employee salaries and benefits, which will help you to hire and retain a happy, talented team.

At WageWatch, our expert evaluators provide businesses in a large range of industries with accurate and beneficial benefits survey data, compensation surveys, and salary reports to ensure that payment and benefits plans are on par with those in the industry. For more information on market compensation data, please call WageWatch at 888-330-9243 or contact us online.

ANSWERS TO ADA ISSUES QUIZ!

Day in and day out, we at Pautsch Spognardi & Baiochhi Legal Group get more questions about disability discrimination and accommodation than any other law. Listed below are the questions AND answers!

The Americans with Disabilities Act and state laws providing protections against disability discrimination cover employers with 15 or more employees, and not those with less.
False: Many states have laws protecting individuals with disabilities working or applying for jobs at companies that employ as few as one (1) employee. Illinois and Wisconsin are among these states.
So long as you treat an employee who is an individual with a disability the same as all other employees you will comply with the requirements of ADA.
False: It is true that individuals with a disability are entitled to treatment equal to that which you give non-disabled employees. But, you are also required by ADA to afford these individuals with disabilities reasonable accommodations that allow them to perform essential functions of their job.
ADA and state discrimination laws against disability discrimination require equal treatment between employees with disabilities and those employees that do not have disabilities.
True: It is true that this is required. But as noted in the answer to question #2, more is required—reasonable accommodation.
Depressive disorder is a covered disability under ADA.
True and False: It all depends on whether the condition of the employee or applicant is such that it meets the definition of a “qualified individual with a disability” under ADAAA or applicable. In other words, does the physical or mental condition substantially limit the employee or applicant in a major life activity such as walking, seeing, talking, working, etc., or does the employee or applicant have a record of such impairment, or is the employee perceived as having such a condition? This is often a difficult analysis that must be made based on the individualized circumstances of that individual’s condition. So, some cases of cancer will be determined to be a disability, and some will not.
An employee who suffers a compound fracture of their tibia and fully recovers from this injury and receives a full release for work in four months’ time is likely covered by ADA due to this condition.
False: Under the Americans with Disabilities Amendments Act of 2008, Congress set six months as the minimum time for coverage as a disability protected by the law. Beware, however, of terminating an employee based on this premise and law. It is particularly risky to terminate an employee based on the assumption that the disability won’t last more than six months, when it may.
An employee who suffers an Achilles tear in her left foot and is fully released for a return to work after exactly one year is covered under ADA.
Probably True: Given the length of time involved, see the answer to question 5 above; it is likely that this condition is covered.
An employee whose only physical limitation on her medical release for work is a 15-pound lifting restriction is not covered by ADA.
Probably False: If this release is permanent, then almost certainly the employee is covered because this has been held by many courts and agency’s to be a substantial limitation on the major life activity of lifting.
An employee whose only physical limitation on his medical release for work is a 50-pound lifting restriction is not covered by ADA.
True: Many cases have decided that this sort of condition is not a covered disability because it does not “substantially limit” a major life activity. In other words, the employee is still a pretty good lifter.
Migraine headaches are not a covered disability under ADA.
True and False: For all of the same reasons noted above with respect to “cancer”, some cases of migraine headaches are covered, while others are not.
The definition that sets forth the requirements for qualifying as an “individual with a disability under ADA” is essentially the same as that defining a “serious health condition” under the FMLA.
False: The two definitions are vastly different. FMLA’s definition focuses on the need for continuing medical treatment and in-patient hospitalization while ADA’s definition is, as noted above, far more focused on the length and the long-term severity of the condition.

As you can see from these answers, ADA, and the state disability, discrimination laws are difficult laws to interpret and apply to the facts and conditions that occur and are present in your workplace. The definition of who is a qualified individual with a disability is a particularly knotty one. The Supreme Court has tackled this definition many times and Congress reversed a number of these decisions in passing the Americans with Disabilities Amendments Act of 2008.
Pautsch Spognardi & Baiocchi Legal Group, LLP; http://www.psb-attorneys.com/ Office: 414-223-5743