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Archive for May, 2015

THE FIGHT FOR $15 IS NOT GOING AWAY

This week ‘s blog is from an article written by Randall Pullen, President and CEO of WageWatch that appeared in Hotel News Now earlier this week.

The Fight for $15 being waged by Unions and Social Advocacy groups around the country will continue against businesses and industries that pay a minimum wage whether it is $9 or $20 an hour.  Why? Because there will always be someone who is making more than the average for the same level of work. It is the antsiest to capitalism.   

The argument for workers to be paid a fair and equitable wage for their work is not a new idea. It goes back for centuries; it was codified by Karl Marx and Friedrich Engels in the 19th century and became the basis for Communism.  With the collapse of Communism in the Soviet Union and China in the late 20th Century, the Progressives in the United States became the remaining standard bearers for the continuing fight for a living wage. 

As pointed out by our CEO, Randy Pullen, in the article published yesterday in Hotel News Now, (Who Really Won the LA Minimum Wage Fight), a $15.37 hourly minimum wage does not improve the living conditions of the working poor.  While this may seem counterintuitive, the fact is that the bundle of social services and tax credits that low income workers and their families receive from the federal and state governments may far exceed the wages earned.  Increasing their wages to $15.37 an hour is more than offset by the loss of benefits. The social safety net we have in place raises the living standard of the poor to well above any other nation in the world. 

Mr. Pullen’s article did not even consider the impact that increasing the minimum wage to $15+ an hour would have on the prices of goods and services.  One only has to look as far away as Australia to understand the impact a living wage has on prices of goods and services (US vs Australia Prices). Australia implemented a living wage early in the 20th Century and Consumer prices in Australia are 20% to 25% higher than in the United States for the same commodities. 

Sadly, the Fight for $15 is a great sound bite but an empty promise to hard working Americans.

WageWatch offers accurate, up-to-date HR metrics, 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. 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.  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.   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.

Posted in Uncategorized on May 28th, 2015 · Comments Off on THE FIGHT FOR $15 IS NOT GOING AWAY

HUMAN RESOURCES ROLE IN INNOVATION

How can human resources contribute to innovation?  How can we turn new ideas into reality, break old paradigms and step outside of the box with new solutions to old problems?  Innovation may begin with creativity but it is more than an idea — it takes place when great ideas come to fruition and make their mark in the world.  In the past, most businesses focused on continuous improvement of their products and services to maintain a competitive edge.  But in today’s economy, that’s not always enough.  

As Human Resource professionals, we are fortunate to be responsible for many areas of an organization that can directly impact and contribute to innovation; including recruitment, performance management, recognition, rewards, training, and employee engagement.  Human Resources can also play a key role in creating an organizational structure and overall culture that fosters and supports innovation. 

Recruiting can focus on hiring for innovation by identifying people who can “think outside the box” or have skills and capabilities that lend toward innovation.  Performance management can serve as a valuable tool in the creation of a sustainable culture of innovation.  Performance measures can give consideration as to whether or not employees are given the time and resources to experiment, generate and explore ideas, and make presentations to management.  Rewards can be used to reinforce the importance of innovation and recognition can be used to encourage and inspire employees to innovate and share ideas.   HR’s role in organizational design provides huge potential for enabling innovation.  For example, organizational design can be used to facilitate easier exchange of employees’ ideas across boundaries and functions. 

An example of a human resource driven innovation that used an out-of-the-box idea to improve the recruiting process is La Canterra Resort in San Antonio, TX, A Destination Hotel, they have incorporated an idea made popular by Disney, the Fast PASS. In Disney’s version, guests can avoid the line and use a Fast PASS to get a ticket to ride an attraction at a specified time with limited to no waiting. This helps improve the guest experience, improves wait times, improves communication and enhances the ability to meet the expectation of guests. At Destination Hotels, they have incorporated this concept into their recruitment practices. Special “FAST PASS” cards are given to managers who can spot people in their daily interactions (at grocery stores, restaurants, bars, the mall, etc…) providing exceptional customer service and invite them to consider an employment opening/opportunity with Destination. They can call a specific number and get a “prioritized / guaranteed” in person interview as opposed to filling out an application during certain hours and hoping to a chance to be considered. Like Disney, the approach at Destination Hotels, improves the experience for the candidate and the HR function / hiring managers. It speeds up the ability to source the most qualified talent and create a match to open positon needs at the resort. Destination competes on innovation. 

While HR can have a significant impact on many of the key drivers of innovation, it is a collaborative process and requires many areas to come together in order to succeed.    Executive leaders hold the key to the level and success of innovation in their organization. They control the strategic direction, influence the culture, and directly and indirectly control all organizational practices.   Managers must know how to lead innovative teams, and individuals must know how to apply innovative thinking.  Every department or function must be part of the process.  For example, Information Technology has become an enabler of innovative ideas, but it is also often the starting point for innovative products or services and Finance has a unique opportunity through the budget development to add innovation either as a line in the overall budget or as a percentage of every departmental budget. 

Organizations need to develop practices that make it easier to innovate.   For example, at the core of an organization’s  culture should be an acceptance of the need to experiment and understand that this comes with the risk of failure and that failure needs to be seen as a learning experience and an important step in the process.  Culture is definitely key to sustainable innovation.  The mindset and culture of the HR team has an exponential impact and influence on the entire organization.  HR leaders can help enable their organizations to differentiate themselves by understanding the critical importance of innovation today and how their role can contribute by attracting and keeping the most innovative people, constantly improving their skills and creating and enabling a culture of innovation.

WageWatch offers accurate, up-to-date HR metrics, 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. 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.  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.   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.

Posted in Uncategorized on May 21st, 2015 · Comments Off on HUMAN RESOURCES ROLE IN INNOVATION

HOW TO DETERMINE NEW HIRE SALARIES

Without established salary ranges and salary structure, setting a salary can be like spinning the roulette wheel.  Most companies have salary offer guidelines based on competitor market data and established salary ranges for positions.  Ideally, you will have these established tools and practices in place before you have to make a salary offer.  Salary scales are a valuable tool in recruiting and hiring new employees as well as providing baseline amounts in making salary adjustments for existing employees. 

There are many things to consider when determining where to set a salary for a new hire including the candidate’s experience and qualifications that are either required or needed for the job, current salaries of employees in the same or comparable worth jobs, salary range, geography, industry conventions and company budget.  Other considerations may be bargaining agreements, prevailing wage contracts or arrangements, and the company’s compensation philosophy.  

To determine accurate external wage comparisons, employers should carefully define the appropriate market and competitive set.  Defining the market too narrowly can result in wages that are higher than necessary. Conversely, defining the market too broadly may cause an organization to set wages too low to attract and retain competent employees. Paying prevailing wages can also be considered a moral obligation.  This focus on external competitiveness enables a company to develop compensation structures and programs that are competitive with other companies in appropriate labor markets.  Employee perceptions of equity and inequity are equally important and should be carefully considered when a company sets compensation objectives. Employees who perceive equitable pay treatment may be more motivated to perform better or to support a company’s goals. 

Internal equity is of equal importance to external competitiveness when setting pay.  You want employees to feel they are paid fairly as compared to their co-workers as well as to adhere to regulations regarding pay discrimination.  If starting salaries are negotiated, ensure that such a practice does not have an adverse impact on women or minority workers.  Generally, jobs do not have to be identical for equal pay to be required, only substantially equal in terms of skill, effort and job responsibility, and performed under similar working conditions. For discriminatory purposes, pay refers to salary, overtime, bonuses, vacation and holiday pay, and all other benefits and compensation of any kind paid to employees.  Pay disparities may be allowed under a seniority system, a merit system or a system measuring earnings by quality or quantity of production.  Hardly anyone notices when you pay “above average” compared to the outside world; but any perceived deficiency in “internal equity” can come back to bite you. 

As you can see there are many factors and considerations when setting pay and it can sometimes feel like a delicate balancing act.  But doing your homework, keeping up with the external market and addressing internal pay inequities will go a long way to simplifying the task of setting new hire salaries.  It is important to ensure that the approach taken is guided by the compensation philosophy and is applied consistently. An effective Salary Administration Program allows a company to meet the basic objectives of compensation:  focus, attract, retain, and motivate.

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.

Posted in Uncategorized on May 14th, 2015 · Comments Off on HOW TO DETERMINE NEW HIRE SALARIES

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 2015, the stronger U.S. economy and increased employer confidence should continue to bolster job gains, and economists expect the previously sluggish wage growth to finally 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 2 or 3 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. 

  1. 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.
  2. The In-Depth Adjustment method is where you select a representative sample of benchmark jobs using current 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 to 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 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 their compensation plans, as a vital and on-going 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.

Posted in Uncategorized on May 6th, 2015 · Comments Off on IT’S TIME TO ADJUST YOUR SALARY STRUCTURE