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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.

WageWatch offers accurate, up-to-date HR metrics, benefit survey data, market compensation data and salary reports that will allow you to stay current with the times. This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards. The PeerMark™ Wage Survey is the only Web-based custom survey tool that allows individual survey participants to select their competitive set for comparison purposes.  Our experienced compensation consultants can assist with your organization’s compensation needs.  We can help you ensure internal equity and compliance with regulations as well as help you structure your compensation programs to support your company’s business strategy and objectives.  For more information on our services, including consulting, salary survey data, benefit survey data and market compensation reports, please call WageWatch at 888-330-9243 or contact us online.

ANSWERS TO ADA ISSUES QUIZ!

Day in and day out, we at Pautsch Spognardi & Baiochhi Legal Group get more questions about disability discrimination and accommodation than any other law.  Listed below are the questions AND answers!

  1. The Americans with Disabilities Act and state laws providing protections against disability discrimination cover employers with 15 or more employees, and not those with less.

    False: Many states have laws protecting individuals with disabilities working or applying for jobs at companies that employ as few as one (1) employee. Illinois and Wisconsin are among these states.

  2. So long as you treat an employee who is an individual with a disability the same as all other employees you will comply with the requirements of ADA.

    False: It is true that individuals with a disability are entitled to treatment equal to that which you give non-disabled employees.  But, you are also required by ADA to afford these individuals with disabilities reasonable accommodations that allow them to perform essential functions of their job.

  3. ADA and state discrimination laws against disability discrimination require equal treatment between employees with disabilities and those employees that do not have disabilities.

    True:  It is true that this is required.  But as noted in the answer to question #2, more is required—reasonable accommodation.

  4. Depressive disorder is a covered disability under ADA.

    True and False: It all depends on whether the condition of the employee or applicant is such that it meets the definition of a “qualified individual with a disability” under ADAAA or applicable.  In other words, does the physical or mental condition substantially limit the employee or applicant in a major life activity such as walking, seeing, talking, working, etc., or does the employee or applicant have a record of such impairment, or is the employee perceived as having such a condition?  This is often a difficult analysis that must be made based on the individualized circumstances of that individual’s condition.  So, some cases of cancer will be determined to be a disability, and some will not.

  5. An employee who suffers a compound fracture of their tibia and fully recovers from this injury and receives a full release for work in four months’ time is likely covered by ADA due to this condition.

    False: Under the Americans with Disabilities Amendments Act of 2008, Congress set six months as the minimum time for coverage as a disability protected by the law.  Beware, however, of terminating an employee based on this premise and law.  It is particularly risky to terminate an employee based on the assumption that the disability won’t last more than six months, when it may.

  6. An employee who suffers an Achilles tear in her left foot and is fully released for a return to work after exactly one year is covered under ADA.

    Probably True: Given the length of time involved, see the answer to question 5 above; it is likely that this condition is covered.

  7. An employee whose only physical limitation on her medical release for work is a 15-pound lifting restriction is not covered by ADA.

    Probably False: If this release is permanent, then almost certainly the employee is covered because this has been held by many courts and agency’s to be a substantial limitation on the major life activity of lifting.

  8. An employee whose only physical limitation on his medical release for work is a 50-pound lifting restriction is not covered by ADA.

    True: Many cases have decided that this sort of condition is not a covered disability because it does not “substantially limit” a major life activity.  In other words, the employee is still a pretty good lifter.

  9. Migraine headaches are not a covered disability under ADA.

    True and False: For all of the same reasons noted above with respect to “cancer”, some cases of migraine headaches are covered, while others are not.

  10. The definition that sets forth the requirements for qualifying as an “individual with a disability under ADA” is essentially the same as that defining a “serious health condition” under the FMLA.

    False:  The two definitions are vastly different.  FMLA’s definition focuses on the need for continuing medical treatment and in-patient hospitalization while ADA’s definition is, as noted above, far more focused on the length and the long-term severity of the condition.

As you can see from these answers, ADA, and the state disability, discrimination laws are difficult laws to interpret and apply to the facts and conditions that occur and are present in your workplace.  The definition of who is a qualified individual with a disability is a particularly knotty one.  The Supreme Court has tackled this definition many times and Congress reversed a number of these decisions in passing the Americans with Disabilities Amendments Act of 2008.
Pautsch Spognardi & Baiocchi Legal Group, LLP; http://www.psb-attorneys.com/ Office: 414-223-5743

 

HUMAN RESOURCES: THE GATEKEEPER FOR COMPANY ETHICS

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 as a whole 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 the employees, their concerns, and deal with employee 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 to an organization. For example, discrimination issues, sexual harassment, and unfair employment policies 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. In order 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 for 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, on-boarding, 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. And of course, lead by example. HR professionals are in leadership roles and employees look to the 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 consultants provide businesses 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 (https://www.wagewatch.com/Contact/ContactUs.aspx).

RED FLAGS FOR ANTITRUST EMPLOYMENT PRACTICES

The Antitrust Division of the Department of Justice (DOJ) has announced a new initiative to criminally investigate and prosecute employers who enter agreements with their competitors to limit or fix the terms of employment for potential hires.

The DOJ and the Federal Trade Commission (FTC) issued guidance for Human Resources (HR) professionals that provides a deeper explanation of the relevant laws, potential violations, and best practices for avoiding liability.  Here is a link to the guidance that was issued October 2016: https://www.justice.gov/atr/file/903511/download

The following Red Flags” for HR professionals have been identified by the FTC and DOJ as examples of “Antitrust”.  These nine red flags are indicative of what types of agreements or information exchanges may violate the regulations.  This is not an all-inclusive list nor does the presence of a red flag automatically indicate an antitrust violation.

  1. Agree with another company about employee salary or other terms of compensation, either at a specific level or within a range.
  2. Agree with another company to refuse to solicit or hire that other company’s employees.
  3. Agree with another company about employee benefits.
  4. Agree with another company on other terms of employment.
  5. Express to competitors that you should not compete too aggressively for employees.
  6. Exchange company-specific information about employee compensation or terms of employment with another company.
  7. Participate in a meeting, such as a trade association meeting, where the above topics are discussed.
  8. Discuss the above topics with colleagues at other companies, including during social events or in other non-professional settings.
  9. Receive documents that contain another company’s internal data about employee compensation.

In the Guidance, HR employees have been specifically identified as individuals in positions of authority with respect to hiring and compensation decisions and so will need to lead the charge to ensure that their company is not the target of an investigation.

The DOJ’s and FTC’s Guidance provides certain boundaries for common HR practices like benchmarking and participation in compensation surveys to determine whether companies are paying competitive compensation packages to their employees. HR professionals should follow this previously issued detailed guidance on how best to exchange compensation information for benchmarking purposes in an antitrust compliant way. See Statement 6, Provider Participation in Exchanges of Price and Cost Information, United States Dep’t of Justice and Federal Trade Commission, Statements of Antitrust Enforcement Policy in Health Care (Aug. 1996).

WageWatch offers accurate, up-to-date HR metrics, benefit survey data, market compensation data and salary reports that will allow you to stay current with the times. This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards. The PeerMark™ Wage Survey is the only Web-based custom survey tool that allows individual survey participants to select their competitive set for comparison purposes.  Our experienced compensation consultants can assist with your organization’s compensation needs.  We can help you ensure internal equity and compliance with regulations as well as help you structure your compensation programs to support your company’s business strategy and objectives.   For more information on our services, including consulting, salary survey data, benefit survey data and market compensation reports, please call WageWatch at 888-330-9243 or contact us online.

The Impact of the Affordable Care Act on Business

The Affordable Care Act is already causing much confusion for American companies as well as for the general public. The law, as passed, was over 2,500 pages long and will require thousands of additional pages of regulatory policy in order to be enacted.  As we enter the year 2013, there will be many more changes to healthcare as the new law and the regulatory policies surrounding it take effect. As the provider of employee benefits, business owners need to fully understand the impact that the Affordable Care Act will have on their business and their employees over the next few years.

The professionals at WageWatch would like to share the following refresher on some of the most important policies within the Affordable Care Act:

1. Small business owners will receive a tax credit on their contribution to employee insurance policies. For businesses with less than 10 employees, each with average wages under $25,000, they will receive a 50 percent tax credit on their contribution. These tax credits apply to all small businesses up to 50 employees with average wages of $50,000, although the credit is reduced on a sliding scale depending on the businesses size and average salary.

2. Beginning in the year 2018, the Affordable Care Act will impose a 35 percent tax on employer provided health insurance plans that exceed $10,200 for individual coverage and $27,500 for coverage of a family. The idea behind this policy is that business owners will aim to avoid expensive insurance policies known as Cadillac Plans, and insurance companies will be forced to modify coverage with an eye to keeping costs down.

3. If you are a small business with 51 or more full time employees, you will be fined $2,000 per employee, excluding the first 30 employees, if you do not offer insurance for employees that work an average of 30 or more hours each week.  For small businesses with 50 or fewer employees, there is no penalty. Small businesses of all sizes are also not required to provide insurance for part-time employees.

4. Business owners must offer insurance that is certified affordable to employees. The premium for each employee’s plan cannot exceed 9.5 percent of their total household income. If the insurance coverage doesn’t meet the affordability law, employees should be offered tax credits to purchase insurance on their own. Business owners will then have to pay whichever is less: $3,000 per employee that receives the credit or $2,000 per employee, excluding the first 30 workers.

5. Businesses with less than 100 employees that work an average of 25 or more hours per week are eligible for grants to start wellness programs. These programs encourage employees to take control of their health by living more healthy lifestyles, which helps to prevent harmful health conditions down the road.

It is clear from just the five points above, that much is still to be determined before implementation can take effect. Please stay tuned as we will continue to provide you with updates on ACA as more information becomes available.

The experts at WageWatch want you to know how important it is to be aware of the new policies under the Affordable Care Act and their effect on small businesses. Employers need to properly plan for the future by developing accurate budgets that take the changing costs of healthcare benefits into consideration for the year 2013 and beyond. For assistance with your budget, WageWatch offers cost-effective reports, including salary, wages and benefits survey data. To learn more about the services provided by WageWatch, please call 480-237-6130 or contact us online.

 

Posted in Regulatory & Legal Updates on December 12th, 2012 · Comments Off on The Impact of the Affordable Care Act on Business

Benefits of Merit Pay

Merit pay is a pay for performance compensation strategy that provides base pay increases centered on demonstrated performance and desired outcomes. It not only rewards high performers for their additional contributions to the business, but also aims to retain key talent and rising stars. WageWatch has found that for 2012, 71% of 4,515 hospitality and lodging employers use merit as either their primary method for increasing base pay or in combination with other methods depending on the job title.

Merit programs need to be closely aligned with performance management systems and the compensation model. One way for HR to illustrate this alignment to management is with a merit matrix. The merit matrix is a decision making tool that combines an employee’s performance score and the position in the salary range to produce a merit pay recommendation. The merit matrix is used by department managers to plan and forecast their merit budgets.

The following are some advantages of adopting a merit based compensation system:

– The connection between individual effort and reward motivates employees to exceed expectations. Their performance is evaluated based on demonstrated ability and objectively according to measureable standards.

– Merit pay drives individuals to further develop skills that are important in succeeding in their role.

– Merit pay is a company’s investment in high performing employees. This investment encourages high performers to stay with the company. At the same time, the absence of reward for poor performance encourages this group to either improve or look elsewhere.

The widespread use of merit pay comes from the wide acceptance by employees that paying for performance is a fair and equitable way of rewarding individual contribution and high performance. When implementing a merit base pay system for the first time, it is critical that the performance evaluation criteria be valued, measureable, and well communicated. The rewards need to be meaningful to the employees and competitive with what others in the marketplace are paying their top performers.

Compensation surveys or salary reports from WageWatch can help you to establish a budget for salary ranges and merit pay, including bonuses and incentives. We are an innovative, cutting-edge organization that is constantly developing new ways to collect data for surveys and salary reports, which allows us to provide services to a wide range of industries. To learn more about our compensation surveys, salary reports and other services, please call 480-237-6130 or contact us online.

WageWatch Banquet Servers Compensation Survey

Banquet servers typically perform duties including hosting, waiting and bussing tables at events including weddings, conferences and fundraisers. Based on WageWatch’s 2012 Compensation Survey for over 5,000 hotels, banquet servers are the top non-exempt earners in terms of tips when compared to all other tipped positions in the industry. It appears that while banquet servers are well compensated; many hotels experience a very high turnover rate. At WageWatch, we questioned why this pattern was occurring, so we conducted a short compensation survey in order to gain a better understanding of the market for banquet servers and to determine the reasons behind this apparent anomaly.

The first question in this survey reads as follows:

If you compensate your Banquet Servers based on a set hourly rate of pay only (with no Gratuity Pool participation), do you pay your AM and PM banquet servers different rates of pay such as a shift differential?

The responses we received from 229 survey participants we’re as follow:

– 93.9% of respondents said they pay their banquet servers a set hourly rate, whether the shift was an AM shift or a PM shift.

– 6.1% of respondents said they do pay their banquet servers a shift differential. The average of shift differential was $1.53 per hour.

The second question in the survey reads as follows:

Does your Banquet Server compensation process include compensation out of a gratuity pool?

The following responses were received:

– About 2/3 of respondents stated that their banquet servers receive tips from a gratuity pool.

– Of the properties with a gratuity pool, on average, 32% is split amongst the banquet servers.

However, the average does not take into account the dispersion in the data. The gratuity pools ranged from 10% to a 100% split with a median of 15%.  With the median less than half the average, banquet servers appear to have opportunities to improve their potential earnings by changing properties.   In order to further understand the reasons for the high turnover rate, we have designed and will be distributing a follow-up compensation survey to develop a more thorough analysis of the banquet server turnover rates. Click here for the results.

WageWatch can help your business with cost-effective compensation surveys that will help you with hiring and budget planning by providing important information such as salary ranges, turnover rates and employee benefit packages. To learn more about our compensation surveys and other services, please call 480-237-6130 or contact us online.

Posted in Compensation Surveys on September 27th, 2012 · Comments Off on WageWatch Banquet Servers Compensation Survey