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STRATEGIC ISSUES AND THE PAY MODEL

Strategic Pay

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 important that compensation is linked to an organization’s overall goals and strategies and aligned 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 the 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 .

EFFECTIVE NEW HIRE ORIENTATION

An employee’s experience during their first few days will affect the rest of their tenure. It is critical, to begin with, an effective, positive, and fun new hire orientation for the future success of your new employees.  Even before the employee’s hire date, you can make a positive impact with a call to the employee two or three days before their start date, welcoming them, letting them know what time to arrive, and what they can expect during their first day and first week on the job.  Studies show that a well-planned orientation can contribute to the length of employment, better work attitudes, more effective communication, and fewer mistakes.  Your new hire orientation is your chance to set a positive tone for a long-lasting and mutually beneficial relationship.

A new hire’s early experience is highly influenced by his peers, managers, subordinates, HR team members, and the organization’s top management.  Ensure that new hires are welcomed by their team members.  Plan a welcome breakfast meet and greet for their first morning on the job.  The new hire’s immediate supervisor should schedule daily meetings with the new employee at least for the first week, then at least weekly for the first month or two.  Schedule informational meetings with key people in the department and in other departments to provide the new hire with the general knowledge that they will need to perform their job.  Include an office tour in the orientation process that includes introductions.  Be sure to include introductions to top Executives, Human Resource personnel as well as receptionists, administrative assistants, and copy/mail room attendants.

An effective orientation program will put emphasis on the new employee, their individuality and what they have to offer rather than focusing solely on the company’s culture and how the new employee can fit in.  You are probably hiring in part to get new ideas into the organization.  Make sure to capitalize on that.  Make your orientation meetings fun and be sure to provide a meal or at least snacks.  Keep it interesting and not too long.  Too much information will be boring and will not be retained.  Orientation should reflect culture through interactive activities.  One way to make it memorable is to present the company’s goals, mission, and values in an activity-based form rather than simply providing the information.  Allow the new hires to get to know each other on a personal basis, not just professional – go around the room and have them tell one professional and one personal thing about themselves.  You can also turn this into a game by writing one thing about each person on a piece of paper.  At the end of the game, state items one at a time, out of order, and have people guess who said what.

Promote communication with a team building activity such as learning the employee handbook through a scavenger hunt.  For example, divide the orientation group into teams and see which team can answer the most handbook questions in a set amount of time.  Cover company ethics to let them know what is expected, and also include ‘unwritten rules’.  Don’t end there!  After orientation, schedule follow-up meetings with each new hire to elicit their feedback and answer any follow-up questions they may have.

Don’t forget the basics.  Provide them with all the office supplies they will need to start their job, include contact information they will need.  And let them know how to get additional office supplies.  Teach them how to use the phone, how to forward calls, set up and change voicemail, and how to do a conference call.

Today, many companies are adding programs such as flex-time, telecommuting as well as accommodating and encouraging alternative work styles in an effort to provide a work environment where employees are happier and thriving.  Therefore don’t neglect or underestimate how impactful beginnings are, and provide your new hires with an orientation program that is effective and unique to your company and its culture.

Implementing the above suggestions will help your company to build a culture that encourages 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 compensation and benefits package.  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 consulting, salary survey data, benefit survey data and market compensation reports, please call WageWatch at 888-330-9243 or contact us online.

GET MORE OUT OF YOUR TURNOVER METRIC

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 to 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.

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, the focus is on monetary rewards. Motivated employees make a difference in the workplace.  They affect the work 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 provide 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 two to three percent, studies show that increases lower than five percent are unlikely to have any impact on employee performance.  What can help is applying behavioral principles to your pay for performance programs 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.

Change can be challenging and demanding.  At WageWatch our consultants can assist with your organization’s compensation needs and help ensure your wages and salaries support your company’s business strategy and objectives.  In addition to our PeerMark™ Salary Survey for over 100 local lodging markets in the U.S. and Canada, we offer a National Benchmark Salary Survey. With over 9,000 hotels and 200 casinos in our database, WageWatch’s hotel and gaming salary surveys are the most comprehensive surveys available to Human Resource professionals. For more information on our services, including consulting, salary surveys, benefit surveys, and custom compensation reports, please call WageWatch at 888-330-9243 or contact us online at www.wagewatch.com/contactus

To Check or Not To Check: A Background Check Primer

There are many types of background checks available to HR professionals that can be conducted in-house or externally by vendors who specialize in employment screenings.  HR professionals should take a strategic view of onboarding as a process.  By doing so, several layers of checks and screenings are implemented to best reduce new hire risks.  It is the old adage that the result is more than the sum of its parts.

The new hire selection process starts with the job advertisement or announcement.  The announcement needs to be designed to attract specific skills and behaviors while discouraging those without the requisite skills. Posting in the advertisement that the position requires a drug test or criminal background check is a potent deterrent.  Those still interested should be directed to a job application that captures information that will form the groundwork for the pre-employment screenings in the next recruitment phase.

The EEOC enforces Title VII of the Civil Rights Act; Age Discrimination Act; Title I of the Americans with Disabilities Act; Equal Pay Act; and Title II of the Genetic Information Act.  Employers are welcome to use all manner of pre-employment screenings – as long as they comply with EEOC standards. None of these Acts directly prohibit employment discrimination based on credit information, conviction records, previous employment, education, or psychological/behavioral profiles. However, the EEOC has published a compliance manual and provides guidance on a number of pre-employment scenarios, because of the disparate impact facially neutral policies can have on these numerous protected classes.

This is the tightrope that causes many HR professionals to gloss over background checks out of fear of inadvertently triggering an EEOC investigation.  What you don’t know, can hurt you.  HR has a duty to the company to traverse this tightrope and understand the often gray and contradictory playing field (between state and federal guidelines) in which they conduct pre-employment screenings.

Criminal Background Checks – Treat each criminal record individually in the context of the job sought, work environment and conditions, and risk to the organization. Ask the candidate about the situation. Deliberate omission and lies can be used as a basis to disqualify the candidate.

Credit Check – Most commonly used for positions that have are executive level, have financial responsibility, or have access to confidential information such as social security numbers to reduce the risk of theft or embezzlement.  Allow candidates the opportunity to explain negative results for some reasons, such as medical bills, are protected.

Physical/Medical Exam – This screening is allowed only after a conditional offer of employment is extended and is used in specific jobs that require a proof of fitness in order to safely perform duties.  All candidates in the job category are required to have the same medical examination.  The candidate medical history is confidential and must be kept separate from employment records.  HR professionals need to keep in mind that the medical examiner does not make the final hiring decision.

Motor Vehicle Record – This is a critical check for positions that are required to operate a company vehicle as part of the job requirement.  In some states, DUI convictions are kept with the DMV not the criminal court system.  There are vendors that make multi-state verification easier by consolidating searches.

Work & Education History – Past performance is a strong indicator of future performance.  The goal of the work history and education background check is to establish that the glowing resume represented to the recruiter is factual and accurate.  On education, check with the governing body on the authenticity of the degree.  We recommend asking for full transcripts for recent graduates with a short work history.

As a company, it is important for you to understand the new regulations set forth by the EEOC and implement them in your hiring and workplace practices.  Additionally, 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.

INTERN PROGRAM BEST PRACTICES

Is your summer intern program ready to launch?  A review of some important information will help to make your program a success.  First, ensure your program is compliant with the Department of Labor regulations regarding internships.  In the last couple of years, both the federal and state governments have been cracking down on the use of unpaid interns.  The use of ‘free’ interns has been significantly reduced since 2010 when the Department of Labor issued new criteria for employers using unpaid interns:

  • Internship needs to be structured as a training experience, similar to a classroom as opposed to the employer’s actual operations
  • The training given to the interns must benefit the intern, not the employer
  • Employers should see no immediate benefit from the intern’s work
  • The intern cannot displace regular employees; they should work under close supervision
  • In advance, establish that the internship is for a fixed duration of time and that the intern is not necessarily entitled to a job at the conclusion of the internship
  • There should be a clear understanding by both the employer and the intern that the intern is not entitled to wages for the time spent in the internship

If your program includes unpaid interns, consult federal and state wage and hour websites or legal counsel regarding regulatory compliance.  In addition to the regulations, many universities and colleges have specific requirements for the internship program up to and including providing educational credit.  If your intern program does not fit the regulatory criteria for unpaid interns, the same wage and hour guidelines that you follow for your hourly (non-tip) workforce will apply.  Interns are often paid at rates comparable to entry level positions within the department or discipline in which the intern will work.  Local market or industry salary surveys can assist you in setting competitive pay rates for your interns.

In addition to the compliance component of your intern program, below are some best practices to consider integrating into your program:

  • Recruit the right candidates by having a clear and thoughtful internship description
  • Designate a program manager and a manager as well as a mentor for each intern
  • Provide structure, even when they aren’t paid
  • Hold orientation sessions for all involved
  • Provide interns with a handbook and/or website
  • Provide interns with real work that is related to their major, that is challenging, that is recognized by the organization as valuable, and that fills the entire work term
  • Consider offering flex time for the interns
  • Host social events and activities for the interns
  • Encourage team involvement
  • Conduct exit interviews

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

INTERNAL PAY EQUITY COMPLIANCE

A company’s approach to internal pay equity is as important as the actual pay programs it implements.  Many factors can impact internal pay equity such as internal increases remaining low while new hires demand salaries that exceed current tenured employees.  Organizations should conduct periodic pay equity studies to keep on top of potential pay equity risks and ensure an understanding of the pay structure, as well as knowledge of and ability to explain pay differences among comparable employees.

When conducting your pay equity study, be aware of these five major federal laws that address equal pay:

  1. The Equal Pay Act – equal pay for equal work among women and men.
  2. Title VII of the Civil Rights Act prohibits discrimination on the basis of race, color, religion, sex or national origin in all employment terms and conditions, including pay.
  3. The Lilly Ledbetter Fair Pay Act clarifies that each paycheck containing discriminatory compensation is actionable under Title VII.
  4. Executive Order 11246 prohibits federal contractors and subcontractors from discriminating in employment decisions, including compensation, on the basis of race, color, religion, sex or national origin, when contracts or subcontracts exceed $10,000.
  5. The National Labor Relations Act (NLRA) protects the rights of most private-sector employees to join together, with or without a union, to improve their wages and working conditions.

Most companies keep a close eye on pay decisions, such as merit raises and starting pay and the processes that guide them.  Unfortunately, tracking individual decisions might not be enough.  The Ledbetter Act requires knowledge of past pay decisions that may have impacted a discrimination claim.  Pay today equals the pay at hire plus all subsequent changes in pay.  Comparing the current pay of employees who were dissimilar in the past means that more historical information may be needed to understand their pay differences.

Pay differences can be defended by differences in knowledge, skill, education, ability, effort or responsibility provided it is required to perform the job.  Pay equity studies typically rely on the data that is available such as job title or grade, time in the job, company seniority, performance ratings, increased percentages, geographic locations, education, and prior job experience.

A pay equity study may involve the appropriate legal counsel, an experienced analyst as well as HR information systems and compensation specialists.  Detailed analysis can point to employees who should be paid similarly but who are subject to large pay differences and will highlight additional factors that explain the difference or highlight inexplicable differences that merit adjustment.   Conducting a well-designed and well-executed pay equity study using well-maintained and complete data is a good business practice that serves as an important tool in managing the risk associated with allegations of pay discrimination.

Change can be challenging and demanding.  At WageWatch our compensation consultants can assist with your organization’s compensation needs and help ensure your wages and salaries are supporting your company’s business strategy and objectives.  In addition to our PeerMark Salary Survey for over 100 local lodging markets in the U.S. and Canada, we offer a National Benchmark Salary Survey.  With over 9,000 hotels and 200 casinos in our database, WageWatch’s hotel and gaming salary surveys are the most comprehensive surveys available to Human Resource professionals. For more information on our services, including consulting, salary surveys, benefit surveys, and custom compensation reports, please call WageWatch at 888-330-9243 or contact us online.

 

HIRING STRATEGIES IN A TIGHT JOB MARKET

It is becoming increasingly challenging to recruit top talent due to the relatively low unemployment rate, the increase in job openings, and the lack of experienced candidates.  These factors require that companies need to be more creative and aggressive in their hiring practices.  In addition, there has also been an attitude change; it is much less of ‘who do I want’ and more of ‘who wants me’ attitude.  Listed below are some tips that may help provide success in the search for new talent:

  • Use multiple forms of social media: LinkedIn, Twitter, Facebook and actively engage on them. Connect to a related industry and check the posts and comments.  If there is someone who stands out,  you may have found a new employee
  • Turn part-time positions into full-time positions
  • Provide training opportunities for current employees to fill open positions
  • Restructure work in ways that adapt to the new workforce; reduce education and other requirements
  • Review the list of job skills and keep the essential skills versus losing a perfect candidate
  • Partner with a local community college and offer to speak with students; provide internship opportunities
  • Participate in job fairs and get involved in the local community
  • Speak at professional organizations and/or special interest meetings to meet potential candidates
  • Offer incentives to current employees who refer new hires, post open positions for visibility to all employees
  • Post for positions that you may have no intention of filling to gain a supply of candidates when a job does open-up
  • Provide a sign-on bonus to new employees
  • Ensure company website is mobile-friendly; a high percentage of searches are conducted using mobile devices

Another important factor is to understand the current perceptions of your company.  It is much easier to keep current employees versus hiring new employees.  It may be valuable to consider the following tactics to retain your current talent:

  • Be more competitive in wages
  • Provide employees stock ownership and/or stock options
  • Offer training programs for current employees to enhance bench strength
  • Provide a sense of organizational purpose and mission (valued by Millennials)
  • Permit flexible work schedules and work at home opportunities (valued by Millennials)

During the interview process, it is more important than ever to ensure that the process is as quick as possible to not lose viable candidates; ensure ongoing communication throughout the process to demonstrate interest.

Change can be challenging and demanding.  At WageWatch our compensation consultants can assist with your organization’s compensation needs and help ensure your wages and salaries are supporting your company’s business strategy and objectives.  In addition to our PeerMark  Salary Survey for over 100 local lodging markets in the U.S. and Canada, we offer a National Benchmark Salary Survey. With over 9,000 hotels and 200 casinos in our database, WageWatch’s hotel and gaming salary surveys are the most comprehensive surveys available to Human Resource professionals. For more information on our services, including consulting, salary surveys, benefit surveys, and custom compensation reports, please call WageWatch at 888-330-9243 or contact us online.

 

DRAMATIC CHANGES FOR PERFORMANCE MANAGEMENT

Organizations are exploring some new and innovative performance management systems in an effort to truly inspire and motivate their teams with some encouraging results.  Traditional performance management systems typically set goals related to the business plan, utilize performance appraisals that are too lengthy, redundant, hastily completed to meet deadlines, and often don’t allow employees any real input.  Many HR leaders believe that performance reviews yield inaccurate results due to biased approaches and misleading inputs.  Performance Appraisals are essentially a forced ranking system that can actually be very demotivating.

The traditional systems are beginning to shift to a more effective coaching system that focuses on employee achievement of measurable goals and objectives rather than formalized annual appraisal systems that primarily communicate one-way.  There are many examples of progressive companies that have replaced their traditional performance management systems with a culture of coaching, feedback, development, and high performance. Critical to success is that everyone in a leadership role is trained on how to coach and provide constant performance feedback, which in turn, engages employees and creates a desire to continuously improve.

The goal of managing performance is being replaced with a goal of obtaining the best possible sustainable performance under the current circumstances.   Key elements of this new paradigm include:

  • Simplify the Process:  Train managers on how to coach, give feedback and regularly check in with employees.  Focus on developing employees rather than evaluating and giving them a ‘rating’.  Ask questions that help target what the employee needs, such as, “What skills would you most like to improve on?” or “What can I do to help you?”  Review employee progress more frequently making the process less intimidating and more sensitive.
  • Streamline, shorten or completely replace Performance Review forms: Replace the forms with on-going coaching and feedback.  Feedback must be timely to be meaningful.
  • More agile, relevant, frequent and transparent goal management:  Include employees in the discussion of key performance objectives, ensuring they understand the reasons for the goals and can see how they are linked to organizational goals.  Utilize more short-term goals that are easier for employees to derive meaning from what they do every day.  Create achievable goals and regularly monitor employee progress.
  • Address career goals and future training needs:  Include a system that supports follow-up and delivery of the training and career opportunities.  Create a culture where managers can delegate without feeling threatened, knowing they also have opportunity and training for the next career advancement.
  • Eliminate direct correlation between performance rating and compensation:  Make pay adjustments based on a combination of elements such as performance, customer and business impact, skill scarcity and the competitive nature of employees’ positions.

Employees want to perform at their best.  They want to understand the goals and to be motivated.  They want to contribute, be supported, to learn and to have fun.  Management and leaders need to create the conditions needed for a great performance to take place and for business to flourish.  The ideal process for managing performance is one that successfully motivates and supports staff to contribute to the achievement of the goals and objectives of the organization.  A culture that encourages on-going communication and coaching between managers and their employees has many benefits and advantages over traditional Performance Management.

Change can be challenging and demanding.  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.

HUMAN RESOURCES ROLE IN INNOVATION

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

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

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

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

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

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

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