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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.

ADVANCED COMPENSATION ANALYSIS

In order to stay in line with industry trends and economic ups and downs, salary ranges should be compared to market each year.  Adjustments to salary ranges may not be needed every year.  Depending upon how fast or slow the market is moving, adjustments normally are needed every 2 – 3 years.  During your annual salary range to the market analysis process, make notes and keep a record of any changes or movement that you see with any jobs and departments from year to year.  It is prudent to avoid making changes to your salary ranges for temporary fluctuations or anomalies.  Look for trends that are long-lasting.

In addition to an external compensation analysis to market, an analysis should be performed to identify internal pay inequities that could potentially become the focus of an OFCCP audit.  Pay inequities should include women statistically paid less than men and/or minorities statistically paid less than non-minorities. Records should consistently be kept regarding all pay decisions to determine whether there are legitimate business reasons to support the pay patterns that exist in those areas.  The results of this analysis will not necessarily be used to adjust individual employee compensation.  Rather, the analysis results should be used to target areas where suspicious statistical pay patterns exist.

Since the purpose of the analysis is to anticipate areas potentially of concern to OFCCP, start the analysis with the salary grades or levels as these are most often used as the units of analysis by the OFCCP.   You will need to determine which unit or units of analysis most appropriately reflect how compensation is administered.  The objective is to find potential problem areas by targeting employees who would reasonably be expected to be paid on the same basis due to factors such as job grade, market location, and business unit.

Though the OFCCP will typically use median to perform analysis and determine pay inequities within pay grades or other units.  A thorough compensation analysis should include:

  1. Median and mean analyses (to identify areas of OFCCP concern):  In each pay grade compare the median and mean of women and men and of minorities and non-minorities.
  2. t-Test analysis:  This test will determine whether the observed differences in pay within the grade levels are statistically significant.  Results of the t-statistic (t-Stat) in the t-Test are considered to be statistically significant if they are 2.00 or greater representing differences of two or more standard deviations.
  3. Regression analysis:  Any unit where the differences in pay are statistically significant a regression analysis should be performed.  Factors that influence grade levels such as time in service, time in a level, time in the job, department, education, and performance can be incorporated into the regression.
  4. Cohort analysis:  Perform this analysis where it has been determined that the differentials are statistically significant, and where the regression analysis has not accounted for the differentials.  A primary cohort analysis would normally be completed on job titles within grades, across department designations and within departmental designations. Each of the various job titles within the database would be sorted by grade, job title, and then base salary from highest to lowest.
  5. Outlier report:  The average salary of protected class of employees is compared to the average salary of the non-protected group within a salary grade and/or job title.  When a protected employees’ average salary falls below a set percentage of the non-protected, this should be flagged for further review.  This analysis identifies protected employees who are at the lower extremes of the salary range.

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

HOW TO DETERMINE NEW HIRE SALARIES

Without established salary ranges and salary structure, setting a salary can be like spinning the roulette wheel.  Most companies have salary offer guidelines based on competitor market data and established salary ranges for positions.  Ideally, you will have these established tools and practices in place before you have to make a salary offer.  Salary scales are a valuable tool in recruiting and hiring new employees as well as providing baseline amounts in making salary adjustments for existing employees.

There are many things to consider when determining where to set a salary for a new hire including the candidate’s experience and qualifications that are either required or needed for the job, current salaries of employees in the same or comparable worth jobs, salary range, geography, industry conventions and company budget.  Other considerations may be bargaining agreements, prevailing wage contracts or arrangements, and the company’s compensation philosophy.

To determine accurate external wage comparisons, employers should carefully define the appropriate market and competitive set.  Defining the market too narrowly can result in wages that are higher than necessary. Conversely, defining the market too broadly may cause an organization to set wages too low to attract and retain competent employees. Paying prevailing wages can also be considered a moral obligation.  This focus on external competitiveness enables a company to develop compensation structures and programs that are competitive with other companies in appropriate labor markets.  Employee perceptions of equity and inequity are equally important and should be carefully considered when a company sets compensation objectives. Employees who perceive equitable pay treatment may be more motivated to perform better or to support a company’s goals.

Internal equity is of equal importance to external competitiveness when setting pay.  You want employees to feel they are paid fairly as compared to their co-workers as well as to adhere to regulations regarding pay discrimination.  If starting salaries are negotiated, ensure that such a practice does not have an adverse impact on women or minority workers.  Generally, jobs do not have to be identical for equal pay to be required, only substantially equal in terms of skill, effort, and job responsibility, and performed under similar working conditions. For discriminatory purposes, pay refers to salary, overtime, bonuses, vacation and holiday pay, and all other benefits and compensation of any kind paid to employees.  Pay disparities may be allowed under a seniority system, a merit system or a system measuring earnings by quality or quantity of production.  Hardly anyone notices when you pay “above average” compared to the outside world, but any perceived deficiency in “internal equity” can come back to bite you.

As you can see there are many factors and considerations when setting pay and it can sometimes feel like a delicate balancing act.  But doing your homework, keeping up with the external market and addressing internal pay inequities will go a long way to simplifying the task of setting new hire salaries.  It is important to ensure that the approach taken is guided by the compensation philosophy and is applied consistently. An effective Salary Administration Program allows a company to meet the basic objectives of compensation:  focus, attract, retain, and motivate.

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.

ARE YOU ATTRACTING TOP 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 through data from healthcare compensation surveys, casino compensation surveys or compensation surveys for another specific industry.

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 and give it their all. 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 team work, 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 current healthcare compensation surveys, casino compensation surveys 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 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 healthcare compensation, hospitality and casino compensation and compensation information for a wide variety of other industries. To learn more about our up-to-date market compensation data, such as hospitality industry compensation surveys, call 888-330-9243 or contact us online.

Posted in Uncategorized on February 4th, 2016 · Comments Off on ARE YOU ATTRACTING TOP TALENT?

Best Practices for Performance Review

One of the greatest challenges for companies in regards to their employees is the performance review process. Employees are evaluated on their performance of assigned job responsibilities, receiving feedback on areas they are doing well in as well as any areas that may need improvement. Reviews are used as a key component for career development, encouraging employees to work harder, reach higher and set attainable goals for the future.

Performance reviews can be a very helpful tool for both the business and the employee when done properly. A major problem with performance reviews is that often times they don’t accomplish what they set out to, leading to stress for both the employee and the employer. It may be difficult to know how to go about overhauling or tweaking your performance review process.

When giving a performance review, you must consider what your organization seeks to accomplish by completing the process. The following are a few of the best practices in regards to achieving beneficial performance reviews:

  • Employee performance reviews must be tied to business objectives. If your employees are consistently receiving high performance scores, but the business is not meeting its goals, then you may need to tweak your process.
  • Plan review performance dates strategically. As listed above, performance reviews should be tied to business objectives; therefore, you should align the performance review schedule with the company’s annual cycle instead of an irrelevant date, such as the anniversary of employment. Employees can be better evaluated after reviewing how the business as a whole performed during the fiscal calendar year.
  • Remember that the review process is always about the employee. As an employer, you must be direct in providing feedback. Be completely open and honest. Employees need to understand what they are doing well and what they can improve upon in order to set personal goals. There should be no question as to what is expected of them before their next performance review.
  • Performance review forms should only be used for a maximum of five years. Businesses are constantly changing and evolving, so it only makes sense for the performance review form to evolve too in order to achieve maximum efficiency.

If you would like to develop a more effective performance review process, consider the expert services of WageWatch. Using performance review data, we can help you to establish a budget for your company through the use of salaries surveys, compensation surveys and other data. With over a decade of experience working with industry associations and employer groups, we have the expertise to provide your business with online benefit, wage and compensation surveys. To learn more about how WageWatch can help you, please call 480-237-6130 or contact us online.

Posted in Benefits & Compensation on December 27th, 2012 · Comments Off on Best Practices for Performance Review

Budgeting for the 2013 Wage Forecast

Budgeting is a key management function that occurs every year in your organization. The budgeting process involves the systematic collection of information and data so that the financial resources needed to support an organization’s objectives can be reasonably estimated. The biggest challenge to developing a budget is trying to meet the 2013 wage forecast. Typically, senior management will forecast sales as well as the operational and capital expenses necessary to support their business goal and objectives.

In today’s marketplace, consumers are looking for companies who are innovative and offer top notch customer service. Because consumers are looking for the very best service in addition to great products, it’s important for a business to invest in its employees, as they are the most valuable resource to making the business a success. Remember, employees are the largest contributor to a business’ success in today’s marketplace.

During the budgeting process, senior management may be quick to cut your funding unless you can demonstrate how important the human resources department is to achieving the annual goals of the business using the 2013 wage forecast; and demonstrate to them how each of your department’s functions contribute to achieving the requisite ROI.

From a human capital perspective, the data needed to develop a new budget for the 2013 wage forecast include the following:

– number of employees projected for next year;

– new benefits/programs planned;

– estimated wage and benefits cost increases;

– projected turnover rate;

– actual costs incurred in the current year;

– other changes in business objectives and strategy; and

– regulatory changes that may impact employee expenses.

When developing your next budget, keep these proven budgeting tips in mind:

1.       Human Resources is Essential to Success

Make the connection between human resources and a company’s goals. Senior executives may not always see this, so make sure they understand how important the human resources department is to achieving success.

2.       Demonstrate Return on Investment

Have spreadsheets, done meticulously, to show how every dollar invested in the departments within human resources will pay out to other areas of the business. Also be sure to detail profitability.

3.       Showcase Value of Added Line Items

Show how programs, such as an employee assistance program, create value and save money in the long run.

4.       Consider Including an Unimportant Project or Program

Including a project that is unimportant that you can remove from your budget during negotiations with senior management. It will show them that you are willing to take cuts in some areas and are a team player.

5.       Get Finance Onboard

Meet with the finance department early in the budgeting process, so you have a teammate in the battle with executives. Outline the budget for them and make it clear that good human capital planning can help the business achieve its goals.

6.       Know your budget

No one can understand your budget better than you. When the budget committee asks questions, you need to know them without having to search for the answers. Be sure to utilize a 2013 wage forecast to ensure your organization is properly aligning its budget with current market value.

7.       Start Early

Every department likely will be presenting their budgets to senior management, so make sure that you aren’t the last. Plan to be heard early in the budget meetings, before discretionary funding is allocated.

Using the above tips will help you prepare a better budget for your human resources department that is in line with the 2013 wage forecast, which will benefit your organization by furthering its business objectives. WageWatch offers cost-effective salary and compensation survey reports that will help you with budget planning by providing important information such as competitive salary ranges, turnover rates for key positions and employee benefit packages. To learn more about our services, please call us at 480-237-6130 or contact us online.

Posted in Benefits & Compensation on September 12th, 2012 · Comments Off on Budgeting for the 2013 Wage Forecast