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ARE YOU ATTRACTING TOP TALENT?

Attracting Talent

Many business owners find it to be a huge challenge to attract and retain a group of talented and hardworking employees that are loyal to the company and its mission.  Finding high caliber employees with advanced skills to complete important jobs within a company is a challenge that not only exists in today’s marketplace but one that business owners have had to navigate for years.  Everyone is looking for top talent, and those companies that excel in attracting and retaining this talent are the ones that will reap the rewards.  In addition to a number of other factors, businesses that best retain employees offer great compensation and benefits packages.

To retain talent, it is essential that loyalty is established.  In order to do this, the employee must feel that their job is instrumental in achieving the goals of the company, making them excited to come into work each day.  It is also important that the work the employee puts in is acknowledged, affirming their place within the company, and offering them opportunities for growth.

While compensation and benefits packages are one of the largest factors considered by employees, it isn’t enough to make top talent to stay. The following are a few ways that you can attract and retain the best employees at your company:

  • Promote open communication.  When a company is completely open with employees, everyone will feel respected.  Instead of allowing rumors to spread, let your employees know as soon as possible about anything that is going on in regards to the company.   When possible, let your employees be a part of the decision making process.  A culture of open communication is very attractive to employees.
  • Provide opportunities for team building.  Most employees enjoy interacting with their coworkers. By encouraging teamwork, employees are able to build great working relationships and establish a trusting, open environment for the company.  When working together toward a common goal, employees are more motivated and excited about their jobs, often producing excellent results.
  • Cater to individual work style.  Each employee has a different way that they prefer to work, learn and be managed.  When you as an employer take the time and effort to make adjustments for each employee’s needs, they will respect the company more and loyalty will, once again, be built.  This will also help you to establish teams that will work best together based on their work styles.
  • Acknowledge your talent.  When an employee does a good job, it is important that you recognize them for their efforts, so they feel that they are a valued member of the team.  A majority of employees leaving a company do so because they feel unappreciated.  Employees want to feel that the work they are doing is making a difference, so acknowledging their work often is essential.  Also, review surveys for 2013 healthcare compensation, 2013 casino compensation and other market compensation data surveys for your industry to determine what benefits and bonuses you should be rewarding your employees with.

Implementing the above suggestions will help your company to build a culture that encourages the retention of employees, which in turn will attract top talent.  In addition to providing a great work environment that respects employees and provides opportunities for learning and growth, it is also important that they receive a solid benefits package.  At WageWatch, we provide accurate data for hospitality compensation, healthcare compensation, casino compensation, and compensation information for a wide variety of other industries.  To learn more about our up-to-date market compensation surveys, call 888-330-9243 or contact us online.

HOW ABOUT A SIX HOUR WORKDAY?

Six-hour

Can a move to a six-hour workday increase productivity and the happiness quotient of employees and their families and at the same time increase productivity and company profits?   In the U.S., more than 60 years after workers, through their unions, began organizing for an eight-hour day in the 1860s, President Franklin D. Roosevelt signed the Fair Labor Standards Act in 1938 for all workers to see limits on working hours – initially, it was set at 44 hours a week, then reduced to 42 hours, and by 1940 the workweek was reduced to 40 hours.

Some businesses in Sweden have experimented with a six-hour workday with the hope of getting more accomplished in a shorter amount of time and ensure that employees have the energy to enjoy their private lives.   This change is purely experimental—one that has not been mandated by law nor implemented nationwide.

A Toyota vehicle service center in Sweden’s second-largest city, Gothenburg, moved to shorter days fifteen years ago.  The service center reported a happier staff, a lower turnover rate, and an increase in profits during that time.  The new system keeps the garages open longer and generates new business.  Employees are doing the same amount in the six-hour workday, often more than they did in the eight- hour day.  The service center reports that employees have more stamina to do this heavy work, and they have seen greater profits and customers because cars are getting fixed faster.

A high-profile case is the publicly funded Svartedalens nursing home in west Sweden.  They began a trial a six-hour day to determine if the cost of hiring additional staff members to cover the hours lost, was worth the improvements to patient care and the boosting of employees’ morale.   The nursing home had 80 nurses working six-hour shifts (maintaining their eight-hour salaries) while 80 staffers at another nursing home worked their standard hours.  Halfway through the test period, the nursing home with the six-hour workday had half the average sick leave, the nurses were happier, and the care was better.   The study, however, equates productivity with a quality of care, which doesn’t necessarily translate to white-collar work.

Several startup companies announced that they are testing the concept.  The companies include Background AB, a creative communication agency in Falun, Dalarna and Filimundus, an app developer based in Stockholm.  Linus Feldt, Filimundus CEO believes that staying focused on a specific work task for eight hours is a huge challenge.  During an eight or more hour workday, employees take frequent breaks and look for distractions and diversions such as social media to make the workday more endurable.  With the six-hour workday, staff members at Filimundus are not allowed on social media, meetings are kept to a minimum, and the company does it’s best to eliminate other unproductive distractions.

Most of the companies who have made the shift to the six-hour workday have reported a positive impact, from increased efficiency to better communication and fewer staff sick days.  A 2014 Stanford University research paper found a “non-linear” relationship between hours worked and productivity, as well as too much work, can impinge productivity.  According to a study by the Families and Work Institute, overworked employees make more mistakes.  Research has shown that condensing work into more efficient hours is very unlikely to hurt productivity.  There is no need to lower pay and in fact, companies are likely to save money through less sick and personal leave, less stress leading to better health, and lower turnover costs.

The six-hour workday would be less acceptable in the U.S. because the eight-plus hour workday ethic is so deeply embedded in our culture.  According to Gallup’s 2014 poll, full-time employees in the U.S. work an average of 47 hours per week.  However, even with encouraging results, it’s unlikely that the U.S. will shift to shorter days any time soon.  The rest of the world (outside of Europe) a 40-hour workweek would be a very nice improvement as well.

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.

STRATEGIC ISSUES AND THE PAY MODEL

Perceptions of compensation vary.  It is seen as a measure of equity and justice.  Stockholders are focused on executive compensation.  Legislators may view average annual pay changes as a guide to adjusting eligibility for social services.  Employees see compensation as a reward for their services and a job well done.  Managers will view compensation from the perspective of a labor cost, but also from a competitive perspective that enables them to recruit, engage and retain employees.  The four basic compensation policy decisions that an employer must consider in managing compensation are: 1) internal consistency, 2) external competitiveness, 3) employee contributions, and 4) administration of the pay system.  The balance between the four policies becomes the employer’s compensation strategy.

It is valuable for companies to link an organization’s overall goals and strategiesPay Model with the Human Resource strategy.  Not doing so, can lead to serious issues of employee retention, engagement, and productivity that can be laborious and expensive to repair.  Compensation for many organizations is the single largest business expense and is visible and important to employees, managers, and stockholders.  Therefore it is important to strategically plan and regularly evaluate compensation systems.  Working with your company’s executives is critical to ensuring your compensation philosophy is supporting business objectives.  Strategic objectives will include significant challenges and priorities now and over the next two to five years.  Some examples are business growth plans, key talent and training objectives, market competition, and whether or not you are in a union environment.  Some other key considerations for your compensation program are:

  • Attracting the appropriate skill sets and types of employees when needed
  • Rewarding employees for their efforts, such as increasing workloads, taking on new tasks and projects
  • Employee morale and perceived value of a company’s benefits, incentives, and work environment
  • A mix of base pay, incentive pay, work environment and benefits that makes the most sense for the organization
  • The link between base and incentive pay with performance
  • Legal issues such as wage and hour

An example of a compensation strategy that aligns with other Human Resource initiatives is matching pay ranges to the desired outcome.  If quality, experience, and a sophisticated skill set are a strategic advantage to an organization, then it will not be successful in hiring employees significantly below the market rate.  Determining whether the organization wants to lead, lag, or match the market is a key decision.  A ‘mixed market position’ approach has become more common as employers realize that a one-size-fits-all strategy does not fit the entire workforce.  For example, location and market competitiveness will impact your pay levels and certain key or hard to fill or retain positions may require pay well above the market, while other positions may be ok with a lag approach.

A successful compensation program will focus on top priorities, guide employees to where their effort can create the most value, create financial and non-financial consequences for success and failure, drive and reward the development of skills and encourage teamwork and collaboration.  Many organizations today keep an eye toward aligning workers’ interests with company goals through innovative types of rewards in the workplace, including skill-based pay and goal sharing.  The right total rewards system is a blend of monetary and nonmonetary rewards offered to employees and can generate valuable business results.  These results range from enhanced individual and organizational performance to improved job satisfaction, employee loyalty, and workforce morale.

Maintaining a competitive advantage and being able to retain key employees is increasingly important.  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.

WHITE COLLAR THRESHOLD CHANGES ON JAN 1, 2020

White Collar

On September 24, the U.S. Department of Labor’s final rule released the final rules increasing the minimum salary level for the Fair Labor Standards Act (FLSA) “white collar” exemptions from $455 to $684 per week.   Effective January 1, 2020:

  • The salary threshold for “white-collar” raises to $684 a week or $35,568 (up from $455 a week or $23,660).
  • For highly compensated employees (HCEs), it raises the annual compensation to $107,432 (up from $100,000 per year).
  • The rule allows employers to use nondiscretionary bonuses and incentive payment (including commissions) paid at least annually to satisfy up to 10% of the standard salary level.
  • Revises the special salary levels for workers in U.S. territories and the motion picture industries have been revised to $455 and $1043, respectively.

It will be important for employers to analyze the status of employees who earn below the new salary threshold but were previously exempt.  Employers will have to consider whether to reclassify those employees as nonexempt hourly workers or give them raises to bring them up to the new threshold.  If employees now classified as exempt are reclassified as nonexempt workers, employers should make sure the newly reclassified employees know what is expected of them as hourly workers.

The quiz below was developed by the law firm, Pautsch, Spognardi & Baiocchi Legal Group.

Answer each question as TRUE or FALSE:

  1. Under the new DOL rules, if an employee makes over $35,568 per year, it is permissible to pay the employee on an hourly basis and not pay that employee overtime.
  2. To be considered exempt under the “white collar” exemptions, under either the new rules or the old rules, the employee must supervise at least two other individuals.
  3. Under the new rules, if an employee holds a professional degree, they can be classified as exempt even if they are not paid a salary of at least $35,568 per year.
  4. Under the new rules, exempt employees, who are paid a salary of over $35,568 per year, can be “docked” pay on an “hour-by-hour” basis as long as careful records are kept and they have forms of paid leave to use for the docked time periods.
  5. The FLSA has an overtime exemption for “inside sales” employees that remains unaffected by the new rules.
  6. The FLSA has overtime and minimum wage exemption for “outside sales” employees that remain unaffected by the new rules.

ANSWERS:

  1. FALSE, each of the “white collar” exemptions (“professional”, “administrative”, “executive”) from overtime require that the employee be paid on a “salary basis” in addition to the “duties” standards set for each. As noted below, the “salary basis” test does not apply to “inside” and “outside sales” exemptions.
  2. FALSE, this is true and required for the “executive” exemption, but not for the “administrative”, “professional” and “inside” and “outside” sales exemptions.
  3. FALSE, to qualify for the “professional” exemption, the employee must meet both the “salary” level test (now $35,568) and the “duties” and status requirements of the “professional” exemption, i.e., that the employee holds a professional degree and perform that work as their primary duty.
  4. This can be done lawfully, but it may be inadvisable to do so as it may cause morale problems and can lead to suits if situations occur if “docking” occurs when the paid leave bank has been depleted.
  5. Under federal law, the inside sales exemption applies to employees who earn more than 150% of the minimum wage, derive at least 50% of their income from commissions, and work within the “retail and service industry” as defined under the FLSA.
  6. Under federal law, an employee who qualifies for this exemption is exempt from both the minimum wage and overtime premium requirements.  The employee’s primary duty must be making sales (as defined in the FLSA), or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer and the employee must be customarily and regularly engaged away from the employer’s place or places of business.  The salary requirements of the regulation do not apply to the outside sales exemption.

Spognardi Baiocchi LLP, a law firm dedicated to partnering with companies of all sizes to find solutions for labor, employment, human resources, and general business needs.  www.psb-attorneys.com.

WageWatch offers accurate, up-to-date benefit surveys, salary surveys and pay practice data that will allow you to stay current.  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, please call WageWatch at 888-330-9243 or contact us online.

MERIT BUDGET ALLOCATION

Merit Pay

 

 

 

 

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

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

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

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

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

ALIGNING COMPENSATION WITH COMPANY CULTURE

Comp - Culture

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

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

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

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

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

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

 

 

2019 U.S. HOTEL CORPORATE EXECUTIVE COMPENSATION SURVEY–NOW AVAILABLE

Execs

WageWatch conducted a National 2019 U.S. Hotel Corporate Executive Compensation Survey.  Participants invited to participate in the survey included WageWatch U.S. Hotel Survey Customers as well as other U.S. Hotel Companies.

The final report is NOW AVAILABLE for purchase.  The price of the report is $1,000, with a 50% discount to WageWatch Survey Customers.  Survey respondents received a complimentary copy of the report in exchange for their participation.

The report is designed to provide you with current and credible compensation information for Senior-Level Executives.  It is a useful tool that provides valuable information when making investment decisions tied to attracting and retaining high-performing executives.  The survey report includes Hotel C-Suite, top Executive positions in all disciplines, and Regional Executive positions.  All compensation elements were included in the survey i.e., base pay, incentives, stock, medical, and retirement benefits.  Participant and proxy data included in the report is based on a total of 31 U.S. Hotel Companies.

The data in the report complies with DOJ anti-trust regulations.  Compliance includes the information being aggregated to protect the identity of the underlying sources, and sufficient sources are aggregated to prevent competitors from linking specific data to an individual source.

WageWatch appreciates the opportunity to serve its customers across multiple industries including hospitality, gaming/tribal gaming, healthcare, golf course/country club, and higher education.  Since 2001, our customers rely on WageWatch to provide them with consistent, reliable, and up-to-date compensation survey statistics for their industry on a local, regional, and national level.

To receive a copy of the report, contact us by phone:  888-330-9243, or by email:  custserv@wagewatch.com.

GET MORE OUT OF YOUR TURNOVER METRIC

Turnover

Most HR departments miss an opportunity when it comes to measuring and reporting turnover.  The goal of any HR metric is to provide information on how to improve the measured item.  As Peter Drucker said, “what gets measured gets done.”  Reporting turnover as simply a percentage of the workforce can be made more meaningful and more useful by diving down into the detail and adding data and information that quantifies the cost and provides insight on root causes and how to make improvements.  Some examples of this are:

  • Along with your company’s turnover rate, add the turnover rate of competitors, giving a baseline or something to compare against
  • Add the percentage of turnover that was top performers or top salespeople, the percent of turnover in each department and for each manager, the percent in high impact jobs and hard to fill jobs
  • Add the percentage of turnover in the first year of employment, which can be linked to possible employee dissatisfaction
  • Add how long it takes to fill positions, the recruitment cost of filling the positions, and how long before they are up to the minimum productivity level
  • Add exit interview information such as how many went to work for competitors and which competitors. Exit interviews may also indicate whether turnover was preventable, which may, in turn, provide managers with information needed for improvement
  • Add the dollar impact of lost sales where applicable, i.e., sales turnover, which can be directly linked to revenue and economic impact on the company

The involuntary turnover metric is also important.  It can indicate that the company is keeping low performers which can also be costly.  With this additional information, conclusions are now more easily drawn and the cost of turnover is more tangible (i.e., the cost of losing individuals in key positions is likely higher than losing individuals in low-impact positions).  If losing hard to fill jobs, the job market may be tight and replacing these employees could be expensive.   Losing individuals with strong reputations within the industry can impact stock analysts’ assessments of your firm.  It can also send negative signals throughout your firm and the industry, which can, in turn, lead to more turnover.

Some additional information that can be helpful when included with the turnover report, include:

  • Leading causes of preventable turnover
  • Satisfaction or frustration levels of those who left which could impact the company’s external image
  • Lowest turnover rates within the firm which can provide a target for managers to aim
  • The likelihood that the person that left will take others with them

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 salary survey reports and pay practice 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, benefits survey data and salary reports, please call WageWatch at 888-330-9243 or contact us online.

OREGON—8th STATE TO PASS FAMILY/MEDICAL LEAVE

Family Med Leave

Oregon officially became the most inclusive law in the country, with respect to paid family and medical leave, when Governor Katy Brown signed the bill into law last week (July 1, 2019).

  • The law covers 12 weeks annually, to new parents, victims of domestic violence, and people who need to take care of an ill family member or themselves; an extra two weeks is given for those giving birth (New Jersey is the only other state which includes domestic violence victims in paid leave legislation)
  • Family is defined to include “any individual related by blood or affinity whose close association with a covered individual is the equivalent of a family relationship”
  • Oregon will be the first to pay low-income works 100% of their wages when they’re off, with weekly benefits capped at around $1,215 (you must earn at least $1,000 in wages a year to qualify)
  • The law will be funded through a payroll tax (not to exceed 1% of employee wages)
  • Employees pay 60% of the total rate and employers will cover the remaining 40%
  • Employers with less than 25 employees will not pay into the program
  • The program will start taking contributions in 2022, and people will be able to start using it in 2023
  • Research suggests paid family and medical leave improves participation rates for new mothers in the labor force, with corresponding benefits in pay equality, infant and child health, and lowers poverty rate
  • The program will take a few years to get started because it’s a new social insurance program, just like unemployment insurance or workers compensation.

The additional states that have adopted a paid family and medical leave policy include the following (along with the effective date):

    • California (2004)
    • New Jersey (2009)
    • Rhode Island (2014)
    • New York (2018)
    • District of Columbia (2020)
    • Washington (2020)
    • Massachusetts (2021)
    • Connecticut (2022)

Paid leave is on the national legislative agenda with new momentum.  This new law in Oregon represents the eighth state, along with the District of Columbia, to adopt a paid family and medical leave policy.  Full wage compensation for American workers in poverty will likely motivate more employees to take advantage of paid leave benefits.

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.

HUMAN RESOURCES: THE GATEKEEPER FOR COMPANY ETHICS

Gatekeeper - HR

Business ethics are important to every business and are often a component of a company’s core values.  However, that doesn’t mean that the organization is ethical.  To build an ethical organization, leadership must establish, and model the company’s core values.  Ethics must be woven into the fabric of the organization, fully supported by leadership and integrated into the company’s philosophies, values, policies, procedures, and practices.  HR departments represent employees, their concerns, and deal with fairness issues.  HR’s role in ethics management should be central to ensure real benefits for the organization and the employees.  Human resources deal with a variety of ethical challenges that if not handled properly can damage a company’s reputation, lead to serious legal issues, and lead to a potentially high-cost impact on an organization.  For example, discrimination issues, sexual harassment, and unfair employment policies that can damage a company’s reputation as well as lead to a severe financial impact.

However, HR departments should not be expected to manage ethics initiatives on their own.  For ethical behavior to become part of an organization, there needs to be a collaborative effort that also includes Legal, Audit, the top management team, and the board of directors.  HR should have a primary role in the development and integration of ethics programs into key organizational activities, such as the design of performance appraisal systems, management training, and disciplinary processes.

The first step to include ethics in company policy and strategies is to put ethics on the agenda, make it part of the conversation.  This can begin the process of ethics to become part of the organization’s culture, business plan, and goals.  HR professionals can help leadership define ethics for the organization.  For example, what are the specific types of ethical issues that impact your organization, your competitors, and your industry?  This process of defining what ethics means to your organization can help determine safeguards that can be included in policies and processes such as recruiting, onboarding, and leadership training.  Ensure ethics policies are in place for issues such as discrimination, sexual harassment. and employee fair treatment.  Establish and communicate expectations for your employees to ensure each employee understands their role.  Communications surrounding ethics and other core values should be on-going.  HR professionals are in leadership roles and employees look to leadership to guide their own behavior.  Organization leaders need to set the example by engaging in legal and moral behaviors, and by showing their respect for the employees and for the organization.  It is critical to creating a supportive environment of trust and transparency.  Employees need to see fair treatment across all levels and need to trust in order to come forward regarding ethical concerns.  Ethics panels can be created for the review of issues and violations.

Treating employees ethically can bring tremendous benefits to an organization.  It can earn long-term employee trust and loyalty.  Loyal employees gain more experience, and master processes, and become more vital to the success of the organization.  Loyal employees are happier employees and can also translate into increased productivity and efficiency as well as minimize recruiting and training costs.  Putting a Code of Ethics in place and encouraging leaders to model desired behaviors are important first steps toward creating an ethical organization.  Holding ethics high as a core company value is key to a company’s success and longevity.

Having the appropriate employee fairness policies and processes in place is critical to maintaining an ethical organization.   But it is equally important that these policies and processes are supported by fair and competitive compensation practices.  For the good of your employees, it is helpful to analyze benefits survey data, compensation surveys, and salary reports.  Having this information at hand allows you to plan a budget, including competitive employee salaries and benefits, which will help you to hire and retain a happy, talented team.  At WageWatch, our expert evaluators provide businesses in a large range of industries with accurate and beneficial benefits survey data, compensation surveys, and salary reports to ensure that payment and benefits plans are on par with those in the industry.  For more information on market compensation data, please call WageWatch at 888-330-9243 or contact us online.