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UNDERSTANDING SALARY SURVEY RESULTS

Every organization uses its own methods of analyzing and applying salary survey results.  Different surveys are used for different purposes.  Some emphasize industry data, while others look more to geographic competitors.  Some salary surveys look closer at organizations that match their size in in terms of revenue or number of employees.  Diversity, in analyzing survey results can reflect the flexibility of the compensation manager to adjust their analysis to deal with a variety of circumstances.  Important questions to ask are; with who are we competing with for the job(s), and to where and why are we losing good employees.  The answers to these questions may vary for different positions in your organization.   For example, you are probably competing nationally for your top executives, and will want to look for national executive surveys and compare to companies of similar size, and revenue.  You also may want to look at your own industry as well as all industries.  For your line level managers and hourly staff, you are most likely competing on a local market level and will want to select a survey with local competitors. 

While there may not be a standard approach to salary survey analysis, there are best practices to assist you with quality and accuracy.  A common first step is to ensure you are matching your jobs to the survey jobs accurately.  This is the foundation on which you will build your analysis and results.  Most surveys will contain only benchmark jobs that will be essentially the same across the participating companies and industries. If the job description is similar but not identical, and the survey data is not disaggregated by closeness of match, the data may be weighted according to the match.  This technique is called survey leveling.  If the job in the survey has more responsibilities, some analysts adjust the survey data by multiplying a percentage factor to bring its pay closer in comparability to the employer’s job.  For some hybrid jobs, you may be able to look at two or more survey jobs and adjust each survey job by a percentage factor, then combine for a total salary comparison of your hybrid job. The WageWatch PeerMark™ Surveys are designed for individual industries and the job descriptions will be for the industry for which it was designed.  

After you have matched your job descriptions, selecting competitors is an important next step.  First, you need to select as many comparable competitors as possible in your market.  Too few will not provide a good statistical output.  When you look at the survey report results and see pay data that looks surprisingly high or low, it is likely that you did not have a large enough sample and a low number of matches for the position may be the cause.  More than one survey report can also be helpful in analyzing data.  After selecting your competitors and running your report, if you find you are missing data for some key positions or simply finding low matches on many positions, you may want to run a second report.  If there are more competitors in or near your local market, rerun the report with the same competitors as your first report, adding additional competitors, select the same positions and you may find data for the additional positions.  To analyze this data, you will need to compare both report results for each position.  Understanding that your second report may have included competitors that may not be as close a match as your original competitor selection, the comparison of the two reports will help guide you with your analysis of the results. 

Make sure you are familiar with the statistics used in the survey.  For example, frequency distribution is the arranging of the data reported in the survey from lowest to highest.  From the frequency distribution, surveys report the varying percentiles of the data (i.e., 25th, median, and 75th percentiles).  The Median is often used by organizations as their baseline because it is the center of the data distribution. In distributions that are not symmetrical and or I which there are outliers, the Average maybe located somewhat away from the central tendency..  The median should be compared to the average.  This comparison will give you a better sense of the range of pay in the data reported. A close alignment of these two will give added weight to the value and usefulness.  Weighting the data is important especially when a significant amount of the data is coming from one or two competitors.  A weighted average will equalize the data and provide you a better statistical result of what the market is paying for that job.

Survey analysis is about studying and understanding the data, comparing the market data to your organization’s data, knowing your competitive market, and identifying anomalies and then finding the reason.  You should also include into your analysis what the survey does not give you.  For example, maybe the survey is telling you that the market is paying considerably higher for a position than you are.  While this is not something you want to ignore, you may find that you have long term employees in the position and have had no problems with turnover. Perhaps there are other perks or incentives that your organization provides that make up for the lower pay level. 

WageWatch 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. 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 September 23rd, 2015 · Comments Off on UNDERSTANDING SALARY SURVEY RESULTS

KEY OBJECTIVES OF A COMPENSATION PROGRAM

Compensation can be defined as a reward earned by employees in return for their time, skills, effort and knowledge.  Compensation includes direct financial compensation, such as wages, bonus and commissions, indirect financial compensation such as health and welfare, retirement and leave benefits and non-financial compensation such as job training and development, recognition and advancement opportunities.  A large percentage of the company budget is compensation, and therefore is a key component of the overall strategic human resource management plan. 

A compensation package can include more than salary and bonus.  It can include health and welfare benefits, retirement plan, leave benefits and various other benefits and perks.  Companies that offer a mix of salary and incentives have the highest employee morale and productivity.  It is most effective to pay incentives as soon after goals are met as feasible such as month or quarter incentive payments, rather than annual.  A good incentive plan should be easily understood by the employees with no more than two to four performance factors.  How you train, develop and manage your employees will also drive retention and performance.

When developing your compensation program, primary objectives to consider are: 

  • To attract the best people for the job
  • Retain high performers and lower turnover
  • Reward performance on specific objectives by compensating desired behaviors
  • Motivate employees to perform their best
  • Improve morale, job satisfaction and company loyalty
  • Align with overall company strategy, goals and philosophy
  • Achieve internal and external equity
  • Comply with all pay and non-discrimination regulations

While compensation is not the only thing that motivates people, compensation that is too low will demotivate employees.  Studies have found a direct correlation between top performing companies and employees that are satisfied with their pay and benefits package.  Competitive and appropriate pay can positively impact customer service.  Employees receiving fair and competitive compensation packages are generally happier with their jobs and are more motivated to perform at their peak.  Motivated employees can add to the bottom line of the organization and contribute to growth and expansion. Studies show that motivated employees take fewer sick days and have fewer disability claims.

While there are many objectives to a successful compensation program, two key objectives are ensuring internal equity and ensuring external competitiveness.  Salary Surveys provide the necessary market data to build competitive pay structures.  Good Salary Survey data provides you with the information needed to ensure your compensation package is competitive.  Salary Surveys are an invaluable tool for the setting right compensation strategy and for following and monitoring the desired pay market.  It is important that you select the right salary and benefits surveys and market data for your employees based on where you are competing for talent in your industry and outside your industry as well as geographic location.

WageWatch 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. 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 September 16th, 2015 · Comments Off on KEY OBJECTIVES OF A COMPENSATION PROGRAM

WHEN DOES SALARY MOTIVATE EMPLOYEES?

Studies have shown that salary can just as easily de-motivate employees as motivate them.   In fact, salaries generally operate as negative reinforcement rather than positive.   For example, an employee receiving a lower than expected merit increase or bonus payment can certainly de-motivate.  On the flip side, receiving the status quo merit increase or bonus amount every year can create an entitlement mentality.  However, when it comes to motivating employees, salary is always one of the top factors, and therefore, it has to be part of your total rewards strategy.  Many believe that the amount of money that is needed is at least enough to satisfy basic needs which vary by person.  Obviously, when salary does not, at a minimum, cover essential needs, this serves to de-motivate.

In this article we will focus on monetary rewards. Motivated employees make a difference to the workplace.  They affect the working environment positively as well as improve customer service, sales or production.  So, how can you determine if the salaries you are paying are motivating your workforce?

First, determine where to focus your compensation spending plan.  This can vary depending on factors such as the current economy, the competitive environment, and where the company is in its life-cycle.  For example a growing company with variable sales and income, may be better off focusing on base salaries.  When business is good, it may be prudent to tie more bonus dollars to goals achieved.

Second, do your research, know your competition.  Every organization can benefit from reputable industry salary surveys such as the WageWatch PeerMark™ and Benchmark reports, to determine competitive salaries.  You should utilize salary survey data from the local market, your industry and from organizations of similar size.  Work within your organization’s salary philosophy and the given financial situation to determine where to set salaries.

In addition to looking externally to market competition, look internally to ensure your internal pay structure and salaries are fair and equitable.  Whether you like it or not, employees will discuss pay with one another.  Ensure fair and equitable pay levels between employees in the same jobs, in the same departments, and jobs of comparable worth within your organization. Formal salary ranges within the organization where people with similar responsibilities and authority are grouped into the same salary range help to maintain internal equity.   Set clear goals for what you want to achieve by setting salaries at certain levels.  For example, you may pay an entry level manager less than market if you are hiring inexperience and providing a training and growth opportunity in exchange.  Open and clear communication regarding the company’s salary structure and pay philosophy can aid in employees’ understanding of the methods used in determining their salary level and assist in demonstrating fairness and equity.

Merit pay is one of the most frequently used methods to drive employee performance.  To be effective it needs to be linked to performance in a manner that is consistent with the mission of the organization.  Merit increases can become de-motivating when your performance measurement system is flawed and/or inconsistently applied or when the merit increase amount that is linked to performance is inconsistently administered.  Also with merit increases typically averaging 2 to 3 percent, studies show that increases lower than 7% are unlikely to have any impact on employee performance.  What can help is applying behavioral principles to your pay for performance program such as giving employees a personal stake in the success of the company by showing a clear link between their efforts and results.  Many companies base their compensation plan on time and not results. Of course, time is a factor and needs to be part of the equation. However, if you pay for results, you will get results.

A well planned salary and total rewards package will motivate your employees, help your company maintain a competitive advantage and help retain key employees.  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 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 September 10th, 2015 · Comments Off on WHEN DOES SALARY MOTIVATE EMPLOYEES?

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. In the WageWatch 6/12/13 blog, Budget Boot Camp, we covered the fundamentals of the HR Budgeting process.  Now we will dive a little deeper into the specific elements of the HR Budget.

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:

  1. 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.
  2. The credibility of the HR function is significantly improved when you can demonstrate real savings and value for HR Projects and Processes.
  3. 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.
  4. 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 companywide 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, 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 .

Posted in Uncategorized on September 3rd, 2015 · Comments Off on BUDGET SEASON: ARE YOU PREPARED?

THE DATA TELLS A STORY

Determining the appropriate salary level is never as simple as we would like. The reason is that despite all the diligent work that goes into salary surveys, the resulting pay data for a given job is always a broad range.  So deciding what precisely to pay an individual takes good judgment that comes with experience.

 The challenge in the interpretation of salary survey data is that it requires a combination of good analytics and common sense. The reality is that often a lot of work is required in order to analyze market pay and determine your pay point and pay range. This often involves analyzing several surveys and/or survey reports and considering other factors such as company strategy, payroll budget, and internal equity before landing on an appropriate salary.  As Compensation and HR professionals we have to be able to say, here is the data, here is how it is analyzed, and here are the judgments we made as experienced professionals.

 The WageWatch PeerMark ™ report allows our survey participants to build their own competitive sets, select from a list of 300+ job titles, and quickly generate a market variance report for the participant’s local market.  For the more demanding and complex data needs, a WageWatch Consultant can build your custom reports for you that will meet your specific needs. We will work with you to define your report specifications, target market areas, competitive set and any other specifications.

 WageWatch compensation consultants are your data partners on whom you can rely on to get the most comparable data from your market, with the expertise to know how and what data to extract from each market or sub-market in order to provide you with survey report(s) containing the best competitive results.  Custom reports solve many compensation problems.  For example you may run into a market area that is heavy with one or two competitors not allowing you to report any data or perhaps the survey market does not contain enough competitors of a similar size and scope that fits your organizational needs.  This is where our compensation consultants can assist having the experience needed to work around some of these challenges and capture your specific needs such as peer groups, industry focus or geographic cut.  This additional data analysis can enhance the overall story that you will have to present back to your executive team.   We can build multi-market competitive sets across multiple locations. These many be niche markets in highly competitive hyper segments or broad multi-city or state benchmarks for management companies entering new markets. Custom reports can also be powerful resources for developing union defense strategies, management and executive job pricing, pricing jobs in rural markets with few competitors, segmenting markets into micro markets, and blending markets into macro markets.

 WageWatch compensation consultants can also help you with your analysis of the market data compared to your current salary ranges and incumbent salaries to update your current structure or in creating a whole new structure.  Perhaps you are looking at moving more toward performance based pay.  We are prepared and experienced to be able to help you with a variety of compensation needs, for example,  analyzing the compensation impact of organizational changes with an internal equity and external competitiveness analysis. Our analysis is full service.  In addition to the compensation review, our consultants can help with FLSA classifications, hybrid jobs, writing job descriptions, mapping new organization charts, and crafting employee communications.

 As the economy continues to improve, we expect to see more pressure put on salary budgets and merit increases in order to meet rising demand for talent. Our consultants can work with you to get the balance right on budgeted wage increases and their relationship with structure adjustments.  When wage increases and adjustments are made, often other potential concerns are uncovered such as wage compression and paying out of range. WageWatch consultants are here to offer comprehensive guidance on your structure maintenance and adjustment requirements.

 WageWatch salary surveys provide data tools and report statistics for analysts of all experience levels. Please contact WageWatch if you need assistance with interpretation the statistics reported, help building custom reports, or have a need for our wide range of consulting services. For more information on our services and surveys please call WageWatch at 888-330-9243 or contact us online.

Posted in Uncategorized on August 27th, 2015 · Comments Off on THE DATA TELLS A STORY

BLENDED OVERTIME RATE IN HOSPITALITY

HR knows that employers must pay an overtime premium of 1.5 times base pay to non-exempt employees who work in excess of 40 hours in a workweek. This calculation is complicated in the hospitality industry due to the use of the common utilization of the tip credit to the federal minimum wage and prevalence of multi-job employees.

Many hoteliers have employees that operate in two or more job functions. This could an employee who is a housekeeper during the first shift and a maintenance technician in the second shift, for example. In the hospitality industry, all hours worked for the same employer, which is defined as the management company and not simply the specific hotel property, must be added together to determine if total hours work exceed 40 hours in the workweek.

If the base rates of the two or more jobs are the same, the overtime calculation is straight forward it is simply 1.5 times the base rate. If the base rates of the two or more jobs are different, then the employer needs to blend the base rates to recreate a new regular rate of play before applying the 1.5 overtime multiplier.

Here is an example of calculating the blended overtime rate for an employee who works in two jobs at two different hourly rates.

Job 1: Housekeeper: $12.50 per hour

Job 2: Maintenance Tech: $16.50 per hour

For the week in question, this employee worked 25 hours as a housekeeper and 20 hours as a Maintenance Tech. With 45 total hours in the week, this employee is eligible for 5 hours of overtime premium pay. What question is how do we calculate the blended regular rate of pay and arrive at the weekly total earnings?

Housekeeper  = $12.50/hr x 25 Hours = $312.50 straight-time earnings

Maintenance Tech  = $16.50/hr x 20 Hours = $330.00 straight-time earnings

$312.50 + $330.00 = $642.50 total straight-time earnings

$642.50 total earnings / 45 hours for the week = $14.28 blended regular rate of pay

Remember, the straight-time earnings have already been calculated for all hours worked, so the additional amount to be calculated for each overtime hour worked is one –half the regular rate.

$14.28 regular rate x 0.5 half x 5 overtime hours  = $35.70 additional half-time pay

Adding the straight-time earnings with the additional half-time pay comes out to our total pay with overtime premium.

$642.50 + $35.70 = 678.20 total pay with overtime

 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 .

Posted in Uncategorized on August 20th, 2015 · Comments Off on BLENDED OVERTIME RATE IN HOSPITALITY

COMPENSABLE TIME

Employers need to ensure they count all worked hours as paid hours for their non-exempt staff. For example, when an employee eats lunch at their workstation or desk and their lunch is interrupted by work such as answering phones or email, the employee is working and must be paid for that time because the employee has not been completely relieved from duty.

If the employer has a policy that is expressly and clearly communicated to the employee regarding a specific length of time for a break, any unauthorized extensions of that break time do not need to be counted as hours worked.  Bona fide meal periods (typically 30 minutes or more) generally need not be compensated as work time. However, the employee must be completely relieved from duty for the purpose of eating regular meals.

The federal Fair Labor Standards Act (FLSA), doesn’t require employers to provide meal or rest breaks, though some states do require such breaks and the rules can also be different for younger workers.  You can find a list of state meal and rest break laws at the Department of Labor’s website at  http://www.dol.gov/whd/state/meal.htm and  http://www.dol.gov/whd/state/rest.htm.

Employers that fall under the federal guidelines do not have to pay for meal or rest breaks unless:

  • The employee works through or during their break, or
  • The break lasts 20 minutes or less, or
  • The break is interrupted by work

Some other compensable time under the federal rules can include waiting time, on-call time, attendance at meetings and training programs, travel time and performing work outside of work hours such as checking emails.

Waiting time may or may not be hours worked depending upon the circumstances.  If an employee needs to wait before a duty can start such as a firefighter waiting for an alarm, then the employee is ‘engaged to wait’ and this time is worked time and must be paid.

On-Call Time is paid time if the employee is required to remain on the employer’s premises.   In most cases the on-call time does not have to be paid when an employee is not required to remain on the employer’s premises.   However additional requirements put on the on-call time that further limits the employee’s freedom could require the time to be compensated.

Attendance at meetings or training programs is paid time when any of the following conditions are true:

  • It is during normal hours,
  • It is mandatory,
    • If the employee feels that they should or need to attend, then it is mandatory
    • It is job related

Travel time may be paid time or not depending upon the kind of travel involved.  Regular commute time to and from the work site is not paid time.  When the employee works at a different work site location then any commute time that is greater than the employee’s regular commute time to their usual work site needs to be counted as paid time.

Travel that is part of the regular work duties, such as travel from job site to job site during the workday, is work time and must be counted as hours worked.  Overnight travel is work time and must be paid time

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.

Posted in Uncategorized on August 12th, 2015 · Comments Off on COMPENSABLE TIME

EFFECTIVE JOB DESCRIPTIONS

Job descriptions describe the major duties and responsibilities of a position or job and are an essential part of hiring and managing employees. They are tools to help your applicants and employees understand their roles and accountabilities.  They can be used to establish a training checklist for new incumbents, as guideposts in the performance appraisal process and as market benchmarks for compensation surveys.  Job descriptions are not required by law however, they can provide evidence of the essential functions of a job for purposes of complying with federal employment laws.   They can also be used for disability and worker’s compensation claims.  It’s good practice to get legal advice to ensure that your job descriptions are compliant. Below are some of the legal requirements to keep in mind while writing your job descriptions. 

  • Fair labor standards Act (FLSA): Exempt or Non-exempt classification should be included on all job descriptions.
  • Occupational Safety and Health Act (OSHA) and the Americans with Disabilities Act (ADA): Working conditions and any required physical activity should be noted on all job descriptions.
  • Equal Employment Opportunity:  Include, “we are an equal opportunity employer.” In all job descriptions
  • Age Discrimination in Employment Act (ADEA): Job descriptions should not indicate age preference.

The first steps in writing job descriptions are the data collection and job analysis processes which begins with questionnaires and/or interviews with both the supervisors and current employee incumbents to gather and determine the key facts about the job.   You will need to collect information that will later be summarized into your job description template.  Generally, the data you will need will include Job Title, Immediate Supervisor, Department, Pay Grade, Working Hours and Travel Requirements, FLSA Status, Mission/Summary, Essential and Non-Essential Tasks & Responsibilities, Supervisory Responsibility, Job Requirements (education, skills and experience required for the job), Working Conditions, Physical Demands, Equipment Usage, and Disclaimer for Management Ability to Modify. 

A job description should be practical and should summarize the key elements of a job in a clear, concise manner.  Be specific and avoid using subjective adverbs or adjectives such as “frequently,” “some,” “occasional,” and “several.” It’s important to build flexibility into a job description and ensure that it is dynamic and functional.  Flexible job descriptions will allow your employees to evolve within their positions as processes, technology and organizational changes occur.  A well written job description will require and investment of time and effort to accurately reflect your organization and unique jobs.

The duties list should contain each essential job duty or responsibility that is critical to the successful performance of the job.   The list should be prioritized with the most important listed first on down to the least significant.  Do not include tasks that comprise less than 5 percent of the overall time.  Each Essential and Non-Essential Duty should be assigned a percentage of time and all duties together should total 100 percent.  Each duty should be described in one – three sentences and the first sentence should begin with an action verb.  Generally there are one or two non-essential duties that total five to ten percent of the total time and are duties such as “Assist in special projects as required”’  or “Any other task assigned by the supervisor.”   This provides flexibility to change duties over time, and captures occasional and unforeseen needs that arise.

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 .

Posted in Uncategorized on August 6th, 2015 · Comments Off on EFFECTIVE JOB DESCRIPTIONS

HOSPITALITY INDUSTRY: IMPACT OF NEW OVERTIME RULES

The proposed updated and revised regulations, as issued by the Department of Labor on 6 July under the Fair Labor Standards Act, would directly affect an estimated 4.8 million workers who are now exempt under the EAP (or so-called “white collar” exemption), but would fall under the proposed 40th percentile of earnings for full-time salaried workers ($50,440 in 2016 dollars). The rules also would automatically update the salary level in future years based on 40th percentile of earnings in the workplace or on inflationary change. 

 The potential impact of these rule changes greatly exceeds the impact of raising the minimum wage to $10.10 over a two-year period. It was estimated that about 3.3 million workers earn at or below the minimum wage, about 2% of the workforce. In order to increase the minimum wage and tie it to inflation required an act of Congress. What the president has done with a stroke of his pen is to authorize DOL through rulemaking, as stated in the proposed rule, “to update the salary level to ensure that FLSA’s intended overtime protections are fully implemented.” 

Overtime in Hospitality 

To better understand how the overtime rules might be applied in the hospitality sector, I spoke with key people in a number of management companies who would be responsible for the implementation of new overtime rules. 

It was very clear from the discussions that the disruption to operations will be severe as will be the financial impact on the bottom line of the companies. The performance of the hospitality industry has been strong in the last two years with record levels of occupancy as well as 14 straight months of record employment. Hospitality has been a leader in the growth and performance of the United States economy. The overtime rules will definitely affect the industry’s performance. 

The salaried positions that likely will require reclassification to nonexempt or substantial raises to comply with the overtime rules will include:

• assistant general manager;

• night manager;

• director of sales;

• sales manager;

• restaurant manager;

• front office manager;

• executive housekeeping;

• chief engineer; and

• banquet manager 

Of course, this will vary by size and service level of the hotel. In general, it is estimated that about 180,000 to 190,000 employees of the 1.9 million workforce or about 10% will be affected. 

The strategies I mentioned above, reclassification to nonexempt and pay raises, each have their own set of problems. Starting with reclassification to nonexempt, the logic for this is to calculate an hourly rate that takes into consideration the manager’s average weekly hours worked. Many middle managers work around 50 hours a week. For example, a front office manager is making $40,000 a year, which works out to be an hourly rate of about $19.20 an hour based on a 40-hour work week. Adjusting the hourly rate to account for the overtime pay rate of 1.5 and 500 hours of overtime a year, works out to be about $14.20 an hour, a perceived decrease of $5 an hour. 

Now the front desk manager is clocking in and technically is not considered part of management for collective bargaining purposes. They may no longer view themselves as part of management. Furthermore, on an hourly basis, he or she is paid about the same rate as the front desk supervisors, who have not been working overtime. So now, the front desk supervisors may work overtime and the front office manager may have less take-home pay. The term for this would be reverse wage compression or even wage inversion. 

The hotel now could have internal equity problems. The management team has shrunk because the reclassified employees may no longer view themselves as part of management. In essence, this will have overturned one of the key components of the Taft-Hartley Act in the late 1940s where middle managers and supervisors were for the first time since the passage of the Wagner Act in 1935, considered “Soldiers of Management” and were expressly prohibited from participating in union organizing. Along with the NLRB’s continued re-analysis of Supreme Court precedent in Kentucky River and other decisions from that agency and the DOL attacking employer use of independent contractors and temporary agencies, it is evident that there is a union-fueled effort to expand the number of individuals exposed to organizing. And this push works conversely to decrease the number and potency of middle managers as a force to oppose unionization efforts. 

The second strategy of pay raises to keep middle managers above the $50,440 floor would be very costly, adding three to four points to labor expense, reducing profitably and resulting in a loss of equity to shareholders and a lower valuation. 

It also could cause wage compression problems. For example, do the assistant GM and front office manager both receive pay raises to $50,440, or does management give the AGM 10% more in order to avoid wage compression? If the AGM gets an additional bump in pay, then the GM now needs a raise in order to maintain a fair and acceptable differential. 

Other issues

There are many other issues that will be raised by the new overtime rules. For instance, what do you do about off-the-clock time at home or at lunch when an employee calls with an issue that needs your attention? What about telecommuting? 

As you can see, this will not be an easy adjustment for the Leisure and Hospitality supersector of the U.S. economy or for other service sectors, which will be affected by DOL’s new overtime rules.

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.

Posted in Uncategorized on July 30th, 2015 · Comments Off on HOSPITALITY INDUSTRY: IMPACT OF NEW OVERTIME RULES

DO YOU PAY EQUITABLY AND FAIRLY ENOUGH TO SATISFY EEOC?

You may think you are paying your employees fairly and equitably until the EEOC comes knocking at your door to perform an audit.  It is commonly known that EEOC requires that all employees are treated fairly regardless of national origin, race, religion, color, sex (including pregnancy and sexual orientation), disability or genetic information. And for employers with 20 or more employees, the Age Discrimination in Employment Act requires that you treat workers over 40 the same and younger workers.  To be in complete compliance with EEO regulations, none of these factors can be used when you are hiring, promoting, disciplining and laying off workers.  Additionally private employers with at least 15 employees who work for you for 20 weeks or more a year must also comply with Title VII of the Civil Rights Act and if you have a federal contract or subcontract you may be subject to EEO guidelines.  Less commonly known is that fair treatment must also be extended to employees who marry someone of a different national origin, race, religion or color.  What you don’t know can hurt you and therefore periodic pay equity self-audits are essential.

 All forms of pay are covered by these regulations, for example; base salary, overtime pay, shift differentials, discretionary or non-discretionary bonuses, stock options, profit sharing plans, life insurance, vacation and holiday pay, travel expenses, and benefits.  If an inequality in wages between men and women is found, it cannot be corrected by reducing the wages of either sex.

To properly analyze your pay practices, you need to identify all factors that influence all types of compensation.  Influencing factors may include:

 Company Seniority

  • Length of time in position
  • Service interruptions
  • Skills and experience required for the job
  • Education, certifications, licenses, etc required for the job
  • Performance ratings
  • Pay grade or level
  • Historic pay increases
  • Market Location
  • Employment status such as Full-time/Part-time

 Pay equity analysis should be performed that includes analysis by job group or salary grade;  if no formal salary structure is in place, group by jobs with similar value and worth.  Also analyze by race and by gender.  Ensure all your pay decisions are well documented as well as having good document retention policies in place.  Of utmost importance is that you apply your compensation practices in a consistent manner and in accordance with your policies and procedures.  If audited by the EEOC, you may need to defend your pay decisions and consistency and documentation will be crucial.

 To protect your organization as well as ensure fair and equitable pay to all employees, it is essential to understand and stay up to date with all the regulations, ensure policies and procedures are in place for compliance and to perform periodic compliance audits.  Even if you are in compliance today, that can easily and quickly change as your organization changes and evolves.  Mergers, acquisitions and divestitures can significantly impact pay equity as well as the day to day business operations of hiring, terminating, promoting, transferring, and restructuring within the organization including the realignment of job duties.

 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 .

 

Posted in Uncategorized on July 23rd, 2015 · Comments Off on DO YOU PAY EQUITABLY AND FAIRLY ENOUGH TO SATISFY EEOC?