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Archive for October, 2012

Lodging Industry 2012 Wage Increases- Part 2

As reported in last week’s iBrief Blog, the lodging industry experienced across the board wage increases for both hourly and salaried employees this year. Overall, wage and salary increases were reported as 2.6% for 2012, which was almost double last year’s increase of 1.4%, as reported by WageWatch in its PeerMark™ Wage Survey of over 5,000 hotels nationwide. Last week, the iBrief Blog focused on hourly increases. This week in the Blog, we will review wage increases for salaried employees.

Managers in key front of the house and back of the house positions received salary increases in excess of the average wage increase of 2.6% reported in last week’s iBrief Blog. The largest salary increase went to Chief Engineers, who on average received a 17.6% pay increase in 2012. This trend is a continuation of what WageWatch reported last week where maintenance technicians I and II received on average 5.5% hourly wage increases. Pay for experienced technical positions continue to lead the way.

Other key management positions receiving above average salary increases in 2012 include front desk managers at 3.7%, marketing and sales directors with 3.9% average increases and food and beverage directors with a 4.3% average salary increase.

As reported last week, there was little difference in the wage increase for full service hotels and focused service hotels. However, the results of the Wagewatch compensation survey for salaried employees do show some differences between full service and focused service hotel employees. The most notable difference was the salary increases for general managers. Overall, general managers received a 1.9% increase in average base salaries; however, focused service general managers on average received only a 1.5% increase while their counterparts at full service hotels received on average a 3.5% increase. The number of full service and focused service hotels surveyed in 2011 versus 2012 was not statistically significant.

Another key trend we are beginning to see emerge in the lodging industry is the hiring of more college graduates to the fill the ranks assistant managers and the management training programs. Our ongoing discussions with hotel management companies as well as with the AH&LA discloses a need for filling entry level management positions that were reduced during the severe national recession of 2008-2009.

This is a trend worth watching. If the economy continues to improve next year and rate and occupancy levels continue to climb to the degree they have the past two years, we will begin to see increased interest on the part hotel management and ownership companies to explore expansion programs. Having a strong bench of middle level managers that can fill the positions at new hotels will be critical to their plans.

WageWatch, Inc. is the leading compensation survey provider for the lodging industry with over 5,000 hotels participating in its PeerMark™ Wage survey. The PeerMark™ Wage Survey is the only Web-based custom survey tool that allows individual survey participants to select their competitive set for comparison purposes.

Lodging Industry 2012 Wage Increases- Part 1

The year 2012 will be remembered as the comeback year for hourly wage and salary increases for the employees of the lodging industry. The industry had across the board wage increases for both hourly and salaried employees as reported by over 5,000 hotels in the WageWatch hospitality compensation survey for 2012. Overall, wage and salary increases were reported as 2.6% for the year, which was almost double last year’s increase of 1.4% reported by WageWatch in its PeerMark™ Wage Survey for 2011 and follows a period of wage stagnation reported in the industry from 2008 to 2010.

This past January, WageWatch surveyed over 3,400 hotels and disclosed in its 2012 wage forecast budgeted pay raises averaging 3% for exempt and nonexempt employees in the lodging industry. The median and mode were also 3%. There was also very little difference between full service hotels and limited or select service hotels, with the later budgeting 2.9%.

Compensation increases reported in the WageWatch wage survey for the lodging industry as of October 23, 2012 shows little difference between the percentage wage increases for full service hotels and limited or select service hotels for similar positions. This is the first year since 2008 that limited/select service properties have kept pace with their full service brethren.

Pay raises for 2012 came in the face of slower than expect economic growth in the U.S. The consensus economic forecast last December was for economic growth in the range of 2.0 and 2.5 percent for 2012. Through the third quarter of 2012, economic growth is estimated to be mired at 1.7%. In spite of this lackluster economic performance, the lodging industry continues to strengthen.

The President of WageWatch, Randy Pullen, stated earlier this year that he expected strong wage increases, as well the as the WageWatch forecast for an increase in lodging employment of an additional 25,000 jobs, to come to fruition as the lodging industry continues its post-recession improvement in both occupancy and rate.

Interestingly, if the lodging pay raises are examined at a more detail level, several “hot jobs” or hard-to-fills jobs can be identified nationally as well as in several city markets. We will focus on a few of the hourly jobs for the lodging industry this week and take a close look at salaried jobs in next week’s Blog.

Front of the house and back of the house wage increases were essentially the same, with front desk agents receiving on average 1.8% increases, while housekeepers and house persons received 2.4% and 2.1% increases. The relatively smaller increases for these positions when compared to the lodging industry average is not unusual as they are entry level positions with higher turnover, which results in the starting wage rate having more impact and are tipped positions In the hotel kitchens, bakers and cooks received 3.2% and 2.1% pay raises. Again, cook is an entry level position and more dependent on the starting rates, which changed very little from year to year.

The biggest increases for hourly workers went to the maintenance department with maintenance technicians I and II receiving on average 5.5% pay increases. Qualified maintenance technicians are hard to find due to multi-industry demand on this skill set and are considered to be hot jobs.

At the supervisor level, housekeeping supervisors received on average a 2.3% increase while front desk shift supervisors received 2.9% increases and night auditors receiving 3.7% increases. In the kitchens, sous chefs received on average 2.9%.

Next week, we will review the salary survey increases in our blog. Needless to say, the maintenance department does well with chief engineers receiving on average 17.6% increases … more next week.

WageWatch, Inc. is the leading compensation survey provider for the lodging industry with over 5,000 hotels participating in its PeerMark™ Wage survey. The PeerMark™ Wage Survey is the only Web-based custom survey tool that allows individual survey participants to select their competitive set for comparison purposes.

Performance Review of Employees

Performance reviews are meetings scheduled with employees to analyze the performance of assigned responsibilities within the workplace. They are designed to help managers assess the abilities of each employee, praise workers in areas they are doing well, identify areas that can be improved, design training to further development, and set goals for the future.

It’s no secret that both managers and employees can come to dread performance reviews as the process can cause a great deal of stress on both parties. If done right, however, the review process will help employers create a more productive workplace. The following is a list of tips to conduct an effective performance review:

Continuous Feedback

A review should be an ongoing process conducted throughout the course of a year. An employee cannot be evaluated fairly with a review process that is done over a very short period of time. As a manager, you should check in on your employees regularly to assess how they are accomplishing their assigned tasks. Take notes on how they go about completing these tasks, both the things they are doing well and those that could use improvement.  Having this on file over the period of a year will allow you to conduct a thorough, accurate performance review. This is will reduce the stress levels going into the review as there will be no surprises.

Gain Insight from Co-Workers

Talking with people who work closely with the employee will help you to gain further information on the strengths and weaknesses of the individual. This is known as a 360-degree review and can include feedback from co-workers, customers, vendors, and subordinates. These are the people who likely know the worker best as they interact with them the most, so it is beneficial place to go for further insight.

Provide Information Ahead of Time

Inform your employees about how the review will be conducted and how their performance will be evaluated ahead of time. Some managers provide the employee with their evaluation form before the review, so they are able to process it and have an emotional reaction alone as opposed to feeling blindsided and flustered in the face-to-face meeting. This provides employees with the framework of what to expect and will reduce some of the anxiety that comes along with a performance review, making the process smoother and more effective. It also allows the employee to perform a self-assessment using the same criteria as the manager.

Have a Conversation

Treat your employee respectfully by actually participating in a conversation with them. While it is important for you to discuss their performance, you shouldn’t be doing all the talking. Make sure you are engaging with the employee by asking questions and actually listening to what they have to say. You should document the employee’s feedback directly on the performance review document. Sitting in a room and lecturing the entire time will make that person feel attacked and uncomfortable, and will make them less likely to open up to you. The process will be much more effective if you understand the employee, so you are able to focus on the best strategy for improvement in the workplace.

Be Goal Oriented

Discuss the changes and additional expectations in the individual’s job description as they approach their next year. Providing the employee with a list of personal goals during the review session will help them to understand their part in achieving the overall goals of the company. In this conversation, you should convey support for the employee and excite and encourage them to improve, even if they are already a top performer.

WageWatch can help you to establish a budget for market compensation, salary ranges, including merit pay, based on a well conducted performance review. We have over a decade of experience working with industry associations and employer groups, providing online salary, wage, compensation and benefits surveys. To learn more about our services, please call 480-237-6130 or contact us online.

Benefits of Merit Pay

Merit pay is a pay for performance compensation strategy that provides base pay increases centered on demonstrated performance and desired outcomes. It not only rewards high performers for their additional contributions to the business, but also aims to retain key talent and rising stars. WageWatch has found that for 2012, 71% of 4,515 hospitality and lodging employers use merit as either their primary method for increasing base pay or in combination with other methods depending on the job title.

Merit programs need to be closely aligned with performance management systems and the compensation model. One way for HR to illustrate this alignment to management is with a merit matrix. The merit matrix is a decision making tool that combines an employee’s performance score and the position in the salary range to produce a merit pay recommendation. The merit matrix is used by department managers to plan and forecast their merit budgets.

The following are some advantages of adopting a merit based compensation system:

– The connection between individual effort and reward motivates employees to exceed expectations. Their performance is evaluated based on demonstrated ability and objectively according to measureable standards.

– Merit pay drives individuals to further develop skills that are important in succeeding in their role.

– Merit pay is a company’s investment in high performing employees. This investment encourages high performers to stay with the company. At the same time, the absence of reward for poor performance encourages this group to either improve or look elsewhere.

The widespread use of merit pay comes from the wide acceptance by employees that paying for performance is a fair and equitable way of rewarding individual contribution and high performance. When implementing a merit base pay system for the first time, it is critical that the performance evaluation criteria be valued, measureable, and well communicated. The rewards need to be meaningful to the employees and competitive with what others in the marketplace are paying their top performers.

Compensation surveys or salary reports from WageWatch can help you to establish a budget for salary ranges and merit pay, including bonuses and incentives. We are an innovative, cutting-edge organization that is constantly developing new ways to collect data for surveys and salary reports, which allows us to provide services to a wide range of industries. To learn more about our compensation surveys, salary reports and other services, please call 480-237-6130 or contact us online.