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Archive for January, 2019

ENGAGED VERSUS DISENGAGED EMPLOYEES—WHAT IS THE COST?

Employee Engagement

Employee engagement levels are at their highest in years.  The Gallup Organization has been measuring levels of employee engagement since 2000.  Over nearly two decades, the annual percentage of actively engaged U.S. employees has ranged from a low of 26% in 2000 to the recent six-month high of 34% in 2018.  On average, 30% of employees have been engaged at work during the past 18 years.  Conversely, the percentage of actively disengaged U.S. employees has ranged from a high of 20% in 2007 and 2008, during the heart of the recession, to the current low of 13%.   On average 16.5% of U.S. employees have been actively disengaged over 18 years of tracking.

To better understand employee engagement levels, it helps to understand how Gallup categories the three different segments of employee engagement.  “Engaged” employees are involved, enthusiastic, and committed to their work while “actively disengaged” employees are unhappy at work and aren’t afraid to tell others about it; they are resentful that their needs aren’t being met and act out, potentially undermining co-workers.  The biggest group of employees are those “not engaged;” they are unattached to their work and while putting in the time, there is no energy or passion put into their work.  To summarize, the 2018 Gallup survey results categorizes employees as:

  • Engaged = 34%
  • Not Engaged/Disengaged = 53%
  • Actively Disengaged = 13%

What is the cost of unengaged employees to an organization?  Gallup indicates that an “actively disengaged” employee will cost their organization $3,400 for every $10,000 of salary, or 34%.  For example, if an average salary is $60,000 per year, the cost for each disengaged employee is $20,400 ($60,000 x .34).  For a company with 1,000 employees, 13% are actively disengaged, for a total of 130 employees.  In this example, the total annual cost to the organization is $2.65 million (130 employees x $20,400).  This monetary loss to the organization is only for the actively disengaged employees and does not represent the loss among employees who are in the “disengaged” (53%) segment.  However, it is compelling to understand the cost for the most “actively disengaged” employees, knowing that the cost of total employee disengagement would be higher.

After computing the cost of disengagement, the focus shifts to increasing engagement.  Based on attributes measured by Gallup in their employee engagement survey, employees place the greatest importance on a role and organization that offers them:

  • The ability to do what they do best
  • Greater work-life balance and better personal well-being
  • Greater stability and job security
  • A significant increase in income
  • The opportunity to work for a company with a great brand or reputation

How do organization increase engagement within their organization?  Some time-tested methods include the following:

  • Develop great managers, they have a tremendous impact on their employee’s experience within your organization. Build a strong manager development program to ensure employees have great bosses.
  • Managers need to schedule on-going career conversation with their employees. Statistics demonstrate that employees want to have career conversations with their boss; it shows the employee that someone at work encourages their development.
  • Build a learning/development culture—one of the primary reasons employees leave a job is to gain career development. Building a learning culture demonstrates to employees that the organization cares about their personal development and that there are advancement opportunities for them within the organization.
  • Allow greater flexibility in the work environment. In 2016, the Gallup survey measured that 43% of employees worked remotely in some capacity.  The findings demonstrated that engagement climbs when employees spend some time working remotely and some time working in a location with their co-workers.  The greatest return exists when employees maintain some balance:  working remotely most of the time but still getting face time with managers and co-workers.
  • Prioritize and demonstrate diversity and inclusion at levels. If employees feel unwelcome they are less likely to care about their position.

For an organization to prioritize increasing employee engagement, it is important to develop an ongoing measurement of engagement. To better understand the specific tactics that will increase engagement within your organization, measure engagement through employee surveys to determine what works and doesn’t work at your organization.

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 a custom-built 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 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 January 30th, 2019 · Comments Off on ENGAGED VERSUS DISENGAGED EMPLOYEES—WHAT IS THE COST?

BEST PRACTICES FOR BONUS COMMUNICATION AND DELIVERY

Bonus

The primary purpose of an annual incentive or bonus plan is to drive and reward behaviors that have an impact on the operating success of the company.  When designing your incentive plan you need to have a clear measurement system for what success is in your company and then make sure the measurements are meaningful to the employees who are doing the work.  For any incentive plan to be effective it needs to be meaningful and have clarity relating both to the plan provisions and to the results needed to earn and maximize an award and the award should be attainable.  Employees need to see a link between how their job performance affects results, and the award amount needs to be sufficient enough to motivate.

Generally, two to four performance metrics are included in a bonus plan design.  The metrics are primarily financial, though quantifiable business objectives can also be used. Corporate or business unit financial metrics are used to fund the incentive pool, and individual performance measures may also be used to determine final individual payouts.  Results that are measured can be quantitative and qualitative, such as customer service quality, the number of customers served, the effectiveness of programs, etc. Often a balanced scorecard approach is used.

Employers should give careful attention not only to the design but also to the implementation and communication of incentive programs.  The most common pitfall when creating a bonus program is inadequate communication.  Bonus plan communications should be both clear and timely.  Make sure the plan is communicated prior to the beginning of the bonus period and this initial bonus communication should address the structure of the plan, decision-making criteria, fairness, measurability, and target.  Equally important are follow-up communications regarding the progress toward attainment of the goals that should happen at frequent and regular intervals throughout the bonus plan period.  You want your employees to have an on-going understanding of where they are and what they need to do to meet and/or exceed their bonus target.

When bonuses are paid or awarded, clear communications again are very important.  Managers should have individual meetings with each bonus plan recipient and clearly communicate the outcome of the incentive period.  Whatever the amount, be sure to let the recipient know that he/she is valued.  Be sure to discuss specific accomplishments and strengths that went into the bonus award.  If the employee was expecting more, be sure to emphasize the broader context of the company’s approach to bonuses.   Let each person know how the bonus was calculated.  No matter what the award is, the conversation regarding the award amount is an opportunity not only for clarity and understanding, but to thank the individual for their hard work and to hopefully improve morale and motivate for future performance.

Employees want to know they are being fairly compensated for their work and their job performance.  Bonus plans that are meaningful to your employees and aligned with the bottom line of your company can help build morale and drive behaviors that are critical to the success of the company.

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, incentive, 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 Benefits & Compensation on January 23rd, 2019 · Comments Off on BEST PRACTICES FOR BONUS COMMUNICATION AND DELIVERY

POTENTIAL FOR 2019 IN THE LABOR AND EMPLOYMENT LAW AREA

Labor Law 2019

While 2018 ushered in some important changes at the federal level in labor and employment law such as:

  • The Fair Labor Standards Act is amended to address tipped employees and tip ownership
  • The Tax Cuts and Jobs Act which impacts certain deductions and reporting provisions
  • Regulatory interpretations from the NLRB which reversed course from its previous decisions

It saw its strongest “advocate” in the passing of new laws from the local and state arena.   What will be some of the continuing trends for 2019?

We believe employers should continue to prepare for the following trends:

  • As marijuana use, both recreational and medicinal, become more widely accepted at state and local levels, look for more court’s and administrative interpretations with respect to zero tolerance drug policies
  • Required sexual harassment training
  • Increase in mandatory paid and unpaid time off including sick leave, military leave, and family leave
  • Restrictions on salary history questions
  • Cybersecurity requirements for the protection of employee data and employer procedures for dealing with breaches

Additionally, employers should keep their eye on minimum wage increases (both state and local) during 2019, “ban the box”, predictive scheduling and [at the federal level] the continued NLRB’s “reverse course” in the previous administration’s decisions as well as potential immigration policies.

Guest author:  Pautsch, Spognardi & Baiocchi Legal Group  (www.psb-attorneys.com)

Posted in Uncategorized on January 15th, 2019 · Comments Off on POTENTIAL FOR 2019 IN THE LABOR AND EMPLOYMENT LAW AREA

MINIMUM WAGE UPDATE – JANUARY 2019

The current federal minimum wage, under the Fair Labor Standards Act (FLSA), is $7.25 per hour which has been in effect since July 2009.  States have the ability to set a rate that is higher than the federal minimum rate and employers are obligated to pay the higher rate.  Currently, there are 29 states that have laws at the state or local level mandating higher pay than the federal rate.

On September 4, 2018, the Department of Labor published a Notice in the Federal Register to announce that, beginning January 1, 2019, the Executive Order 13658 minimum wage rate is increased to $10.60 per hour.  This Executive Order minimum wage rate generally must be paid to workers performing work on or in connection with covered contracts.  Additionally, beginning January 1, 2019, tipped employees performing work on or in connection with covered contracts generally must be paid a minimum cash wage of $7.40 per hour.

Voters across many states approved ballot measures to raise their state minimum rates over time, with increases occurring through 2020 and beyond.  There are 19 states which have an increase that takes effect on December 31, 2018 or January 1, 2019, including:  1) Alaska, 2) Arizona, 3) Arkansas, 4) California, 5) Colorado, 6) Delaware, 7) Florida, 8) Maine, 9) Massachusetts, 10) Minnesota, 11) Missouri, 12) Montana, 13) New Jersey, 14) New York, 15) Ohio, 16) Rhode Island, 17) South Dakota, 18) Vermont, 19) Washington.

For more details, click on the following link to view the WageWatch Minimum Wage Chart with details of federal, state and local minimum wage increases:  WageWatch – U.S. Minimum Wage Increases.  In addition to the statewide minimum wage increase, multiple states have approved minimum wage increases that are higher than the statewide average.  (The increases are referenced in the attached Excel spreadsheet).  There is one state, Oregon, and the District of Columbia that have scheduled their wage increase to begin on July 1, 2019.

Although there are no statewide minimum wage increases, there are several states in which specific cities and/or counties which have wage increases scheduled to occur on 1/1/2019; these states include:  Illinois, Maryland, and New Mexico.

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 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.

THE BOOMER GENERATION IN THE WORKPLACE

It is not uncommon for baby boomers to now work side by side with co-workers from generation X and generation Y.  Each of the generations in the workplace today grew up in times with widely varying political and social issues, technology and other factors, which have affected their attitudes on everyday life.  As an employer, it’s important that you understand each of the generations you employ in order to provide them with the work environment and rewards that make them most happy.

The basic employment packages for businesses are based on the needs of baby boomers, a very loyal generation of workers, typically staying with the same company for many years.  Employees of this generation value their benefits, such as health insurance, life insurance, and vacation time.  To determine if their company is providing salaries and benefits that are on target with the industry average salary, many employers turn to market compensation and benefit survey data.  These baby boomer employees that have stayed with a company for most of their careers have invaluable knowledge and experience that is essential to business operations, so it’s important that employers keep them happy and reward them for their loyalty.

While it is important to keep baby boomers satisfied by analyzing market compensation data, benefit survey data and salary reports, it is also essential for employers to look at the needs of the upcoming generations.  Many baby boomers are in management positions but will start to retire around the same time leaving a large number of open positions.  It is essential that skilled employees of the X and Y generations be ready to take their place.

The new generations of workers enjoy benefits like the baby boomers, but these employees prefer additional incentives and small tokens of appreciation for their efforts.  This generation is not as loyal to the companies they work for, and have no problem moving to a job at another company every two or three years.  For this reason, it is even more important to build loyalty with employees of these generations by providing them with the benefits and incentives they desire. It is very beneficial for companies to use benefit survey data, market compensation data, and salary reports to determine the types of compensation, including incentives that are standard for the industry.  Having this data will help companies to stay competitive with other employers by creating appealing benefits packages that will attract and retain top talent.

Today’s world moves fast, and as an employer, you should constantly be monitoring and adjusting your business operations to meet the ever-changing wants and needs of your employees.  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 market compensation data, benefit survey data, and salary reports, please call WageWatch at 888-330-9243 or contact us online.