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COMPENSABLE TIME

Employers need to ensure they count all worked hours as paid hours for their non-exempt staff.  For example, when an employee eats lunch at their workstation or desk and their lunch is interrupted by work such as answering phones or email, the employee is working and must be paid for that time because the employee has not been completely relieved from duty.

If the employer has a policy that is expressly and clearly communicated to the employee regarding a specific length of time for a break, any unauthorized extensions of that break time do not need to be counted as hours worked.  Bona fide meal periods (typically 30 minutes or more) generally need not be compensated as work time.  However, the employee must be completely relieved from duty for the purpose of eating regular meals.

The federal Fair Labor Standards Act (FLSA), doesn’t require employers to provide meal or rest breaks, though some states do require such breaks and the rules can also be different for younger workers.  You can find a list of state meal and rest break laws at the Department of Labor’s website address: https://www.dol.gov/whd/state/meal.htm  and   https://www.dol.gov/whd/state/rest.htm.

Employers that fall under the federal guidelines do not have to pay for meal or rest breaks unless:

  • The employee works through or during their break, or
  • The break lasts 20 minutes or less, or
  • The break is interrupted by work

Some other compensable time under the federal rules can include waiting time, on-call time, attendance at meetings and training programs, travel time and performing work outside of work hours such as checking emails.

Waiting time may or may not be hours worked depending upon the circumstances.  If an employee needs to wait before a duty can start, such as a firefighter waiting for an alarm, then the employee is ‘engaged to wait’ and this time is considered worked time and must be paid.

On-Call time is paid time if the employee is required to remain on the employer’s premises.  In most cases, the on-call time does not have to be paid when an employee is not required to remain on the employer’s premises.  However additional requirements put on the on-call time that further limits the employee’s freedom could require the time to be compensated.

Attendance at meetings or training programs is paid time when any of the following conditions are true:

  • It is during normal hours,
  • It is mandatory,
    • If the employee feels that they should or need to attend, then it is mandatory
  • It is job-related

Travel time may be paid time or not depending upon the kind of travel involved.  Regular commute time to and from the work site is not paid time.  When the employee works at a different work site location then any commute time that is greater than the employee’s regular commute time to their usual work site needs to be counted as paid time.

Travel that is part of the regular work duties, such as travel from job site to job site during the workday, is work time and must be counted as hours worked.  Overnight travel is work time and must be paid time

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

 

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.

MINIMUM WAGE UPDATE JULY 2017

Voters in four states Arizona, Colorado, Maine and Washington approved ballot measures that will raise their state minimum wage by between 43% and 60% over the next few years. Arizona, Colorado, and Maine will incrementally increase their minimum wages to $12 an hour by 2020. Washington’s will be increased incrementally to $13.50 an hour by 2020.

State increases that are effective July – December 2017 include Maryland, Minnesota, New York, Oregon, Washington DC, and USVI.

State and City minimum wage increases continue to make front page news. An unprecedented number of cities and counties have moved to adopt higher local minimum wages. In addition, cities are proposing substantially higher wage levels than in past years. Cities with minimum wage ordinances include San Francisco, San Jose, Los Angeles, Chicago, Seattle (SEA-TAC), Montgomery County and Prince Georges County MD, Santa Fe, Albuquerque, and others have already approved increases. Many other cities have ordinances that become effective in 2017 and beyond.

Follow this link to the WageWatch Minimum Wage Chart with details of federal, state and local minimum wage and pending increases: Minimum Wage Chart

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.

LINKING PAY PRACTICES WITH BUSINESS OBJECTIVES

Compensation plays a critical role in organizations’ ongoing and increasingly challenging efforts to attract, retain, and motivate a talented workforce. Compensation design and management play a vital role in aligning employee behavior with business objectives. Human capital costs represent a significant part of most organizations’ cost bases and need to be spent as effectively as possible. It is vital to understand the consequences pay decisions can have on your organization.

Salary structures are an important component of effective compensation programs and help ensure that pay levels for groups of jobs are competitive externally and equitable internally. A well-designed salary structure allows management to reward performance and skills development while controlling overall base salary cost with a salary range cap. Market pricing is the most common method companies use to design base salary structure ranges using external market data combined with a focus on internal pay equity. The goal of market pricing is to keep the organization from 1) underpaying, resulting in losing talent to competitors, or being unable to attract the talent it needs and, 2) over-paying which wastes organizational resources and impedes desirable turnover. The secret to effective market pricing is the ability to spot and adequately analyze and level the data anomalies and imperfections using both science and experience.

Some organizations elect to pay lower than the market and offset lower than market wages with offers of ‘good’ benefits, meaningful work, and stability. This practice can lead to employee disengagement and organizations risk losing people. Also, the organization will likely attract people who couldn’t get ‘better’ jobs with higher pay. One of the key determinants of job satisfaction or dissatisfaction is how employees feel their pay package compares to others.

Pay-for-performance programs are used to award employees for desired behaviors and outcomes and they take many forms, including cash bonuses, company stock, and profit sharing. Pay-for-performance plans have a learning curve, and they require regular maintenance in order to be and remain effective. Incentive compensation plans need to align with the company’s business strategy, mission, goals, and objectives. They should address root causes of performance and the goals must reflect a balance of financial results and the key business drivers. Payout opportunities should be both consistent with the performance value and meaningful to employees.

While pay-for-performance plans provide a financial incentive to employees, there can be disadvantages. If not crafted carefully, they can cause employees to focus more on quantity over quality. They may impede teamwork if workers view helping another employee as wasting valuable time that could be spent on reaching their own goals. And just like base pay, incentive pay should be competitive with the market or it could fall short of motivating the employees.

Smart, successful organizations do the regular planning and evaluating of their compensation and performance rewards systems. Compensation is visible and important to employees. It is critical to have a solid and competitive pay strategy where pay decisions and policies match the objectives of the organization. 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.

THE IMPORTANCES OF METRICS FOR HUMAN CAPITAL (Resources)

In a research report entitled, The State of Human Capital 2012, ( Report ) prepared by The Conference Board and McKinsey & Company, they concluded that the one word that describes the state of the Human Capital Department in most companies today is “paralysis”. What they meant by that was there were too many factors to manage including a changing workforce, too much uncertainty, too many risks and too little support. One area that was identified as a key success factor for the future was developing stronger workforce analytics and metrics. While HC professionals agree that metrics are critical to their future success and importance to the executive suite, overall metrics utilization by the HC departments is considered to be lagging when compared to other departments within their organization.

HC metrics are a vital way to quantify the cost and the impact of employee programs and HC processes and measure the success or failure of HR initiatives. The use of metrics on the labor force can have a positive impact on profit.  Metrics can quantify the dollar impact that HR processes and actions have on business goals.  The ability to illustrate trends and impacts with numbers is a very effective way for HC professionals to influence and get the support of managers and executives.  Metrics can highlight inefficiencies, reduce expenses, and drive improvements and financial results. 

Critical to the success and value of HC metrics is that they are accepted by colleagues and executives.  Contrary to popular belief, more often than not, the metrics don’t require a degree in mathematics or complex formulas.  Not every metric idea will succeed.  Many workplace metrics seem like great ideas, until you actually put them on paper and find they tell you little or nothing of value.  Careful selection of what is measured places the focus on business goals and lets everybody know what is important. Make sure you know what you want to measure, how you will measure it and how the results will be used for improvement.   The basic goal of any HC metric is to provide managers with information that allows them to improve the measured item.  In order for metrics to be useful, first you need to ensure that the data is accurate and easily accessible. 

A basic but important HC metric is workforce productivity or employee return on investment (ROI) measured by dividing the total dollar amount spent on labor costs by total revenue, or revenue per employee (total revenue/the number of employees).  Ask executives to weigh in on the biggest workforce issue(s) and the resulting metrics. A best practice is to have a current or hot issue metric that needs executive attention. 

With the tightening labor market, turnover is returning as a hot issue. Turnover is a common HC measurement and is calculated by dividing the number of terminations by the average number of active employees during the same time period.  This simple measurement as it is applied and modified can be used for many HC metrics.  For example, using the basic turnover measurement: how many employees leave during their first year of employment – this may signal a problem with the recruiting process or with the on-boarding process; how many top performers are leaving – perhaps a problem with compensation or a lack of promotional opportunities; how many employees are leaving from each department – departments with high turnover may signal a problem with management. The cost to replace employees can then be applied to highlight the bottom-line cost of turnover.

Some other examples of HR metrics are:

  • Recruiting Process Metrics:
    • Number of overall days that “key positions” were vacant
    • Year over year comparison of average new hire performance appraisal scores
    • Manager satisfaction with new hires
    • Percent of diversity hires in managerial and senior positions
  • Compensation & Benefits Metrics
    • Survey employees on their perceptions of fair pay as compared to work expectations.
    • Percent of employees satisfied with their compensation
    • Percent of top performers that are paid above the average salary for their position
  • Employee relations  Metrics
    • Compare year over year results of % of employees that rate their manager poorly
    • Turnover % of low performing managers and employees within one year of receiving the low performance score
    • % of low performance rated employees that are on a performance improvement plan
    • % of employees that are all in any performance improvement plan that improve at least one level on performance appraisal ratings within 1 year
  • Training & Development Metrics
    • % of employees that report that they are satisfied with the learning and growth opportunities
    • % of employees that report that they are satisfied with on-the-job learning

As you decide on and develop your HC metrics, it is important that you have asked your executives for their input regarding factors that help the organization and departments run smoothly, satisfy customers and turn a profit.  And your metrics should provide information, and not just numbers. As you identify what’s important to your organization’s strategic success, the metrics that matter most should rise to the surface.  Your goal is not to inundate executives and managers with numbers, but to provide critical information that they can use in making decisions about business issues.

WageWatch offers accurate, up-to-date market surveys of pay practices, benefits, 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 Debate Goes On: Market Pricing versus Job Evaluation

I began my career in Compensation in the early 1990s using a combination of market pricing and job evaluation to establish pay structures.  Market pricing is the ‘external’ method, collecting salary data, usually through a salary survey, for similar jobs from other organizations to establish the ‘market rate’ or ‘price’ for the job.  Job evaluation is the ‘internal’ method, focusing on internal job worth, each job is rated or scored on several different factors and the total score equates to the job’s salary grade in the pay structure.  Over the years, the use of the point factor system fell by the wayside.  Having used both methods together, at first I was uncomfortable with relying only on market pricing and salary surveys.  But over time I saw that I was arriving at the same end result, and ultimately, where I wanted to be which was remaining competitive with the market.  Still I wondered if I wasn’t missing something in my analysis.  I found through my informal research that most of my compensation colleagues were also relying solely on the external market and the use of compensation surveys and the prevalent thinking was that a job is worth only what the market says it is worth. 

Job evaluation approaches were prominent when people stayed with the same employer, often their entire career, progressing through the internal hierarchy.  Most hiring was done at the entry level, and recruiting talent from the outside, was not as dominant as it is for today’s organizations.  Therefore, pay relationships between jobs inside the organization were more important than the external job market.  Today the ability to attract and retain necessary talent is critical and in order to do so compensation must remain competitive with the external market.

Still the debate goes on whether it is better to use job evaluation or market pricing and salary surveys to determine employee compensation.   Having an intimate and in-depth understanding of the jobs in your organization is critical to correctly matching your jobs to the external marketplace.  There is no scientific single rate of pay for a job or role, and rates may vary even for the same occupation and in the same location.   Experienced compensation professionals will be able to interpret the data for an organization and its jobs.   Though today compensation in the private sector is largely reliant on external market pricing, in my experience both techniques provide essential data to determine fair and equitable compensation practices.  Combining market data with your internal job valuations to drive decision making is ultimately the best practice.

WageWatch Compensation Professionals can provide your business with compensation surveys and salary reports, and can assist you with your market pricing, evaluation of your jobs and organizational needs to establish a salary program that is both externally competitive and internally fair and equitable. Our innovative company is a leader in the collection of data for surveys and salary reports, which allows us to provide services to a wide range of industries in both the private and public sector. To learn more about WageWatch compensation surveys, salary reports and other services, please call 480-237-6130 or contact us online  www.wagewatch.com.

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

Lodging Industry 2012 Wage Increases- Part 1

The year 2012 will be remembered as the comeback year for hourly wage and salary increases for the employees of the lodging industry. The industry had across the board wage increases for both hourly and salaried employees as reported by over 5,000 hotels in the WageWatch hospitality compensation survey for 2012. Overall, wage and salary increases were reported as 2.6% for the year, which was almost double last year’s increase of 1.4% reported by WageWatch in its PeerMark™ Wage Survey for 2011 and follows a period of wage stagnation reported in the industry from 2008 to 2010.

This past January, WageWatch surveyed over 3,400 hotels and disclosed in its 2012 wage forecast budgeted pay raises averaging 3% for exempt and nonexempt employees in the lodging industry. The median and mode were also 3%. There was also very little difference between full service hotels and limited or select service hotels, with the later budgeting 2.9%.

Compensation increases reported in the WageWatch wage survey for the lodging industry as of October 23, 2012 shows little difference between the percentage wage increases for full service hotels and limited or select service hotels for similar positions. This is the first year since 2008 that limited/select service properties have kept pace with their full service brethren.

Pay raises for 2012 came in the face of slower than expect economic growth in the U.S. The consensus economic forecast last December was for economic growth in the range of 2.0 and 2.5 percent for 2012. Through the third quarter of 2012, economic growth is estimated to be mired at 1.7%. In spite of this lackluster economic performance, the lodging industry continues to strengthen.

The President of WageWatch, Randy Pullen, stated earlier this year that he expected strong wage increases, as well the as the WageWatch forecast for an increase in lodging employment of an additional 25,000 jobs, to come to fruition as the lodging industry continues its post-recession improvement in both occupancy and rate.

Interestingly, if the lodging pay raises are examined at a more detail level, several “hot jobs” or hard-to-fills jobs can be identified nationally as well as in several city markets. We will focus on a few of the hourly jobs for the lodging industry this week and take a close look at salaried jobs in next week’s Blog.

Front of the house and back of the house wage increases were essentially the same, with front desk agents receiving on average 1.8% increases, while housekeepers and house persons received 2.4% and 2.1% increases. The relatively smaller increases for these positions when compared to the lodging industry average is not unusual as they are entry level positions with higher turnover, which results in the starting wage rate having more impact and are tipped positions In the hotel kitchens, bakers and cooks received 3.2% and 2.1% pay raises. Again, cook is an entry level position and more dependent on the starting rates, which changed very little from year to year.

The biggest increases for hourly workers went to the maintenance department with maintenance technicians I and II receiving on average 5.5% pay increases. Qualified maintenance technicians are hard to find due to multi-industry demand on this skill set and are considered to be hot jobs.

At the supervisor level, housekeeping supervisors received on average a 2.3% increase while front desk shift supervisors received 2.9% increases and night auditors receiving 3.7% increases. In the kitchens, sous chefs received on average 2.9%.

Next week, we will review the salary survey increases in our blog. Needless to say, the maintenance department does well with chief engineers receiving on average 17.6% increases … more next week.

WageWatch, Inc. is the leading compensation survey provider for the lodging industry with over 5,000 hotels participating in its PeerMark™ Wage survey. 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.

Performance Review of Employees

Performance reviews are meetings scheduled with employees to analyze the performance of assigned responsibilities within the workplace. They are designed to help managers assess the abilities of each employee, praise workers in areas they are doing well, identify areas that can be improved, design training to further development, and set goals for the future.

It’s no secret that both managers and employees can come to dread performance reviews as the process can cause a great deal of stress on both parties. If done right, however, the review process will help employers create a more productive workplace. The following is a list of tips to conduct an effective performance review:

Continuous Feedback

A review should be an ongoing process conducted throughout the course of a year. An employee cannot be evaluated fairly with a review process that is done over a very short period of time. As a manager, you should check in on your employees regularly to assess how they are accomplishing their assigned tasks. Take notes on how they go about completing these tasks, both the things they are doing well and those that could use improvement.  Having this on file over the period of a year will allow you to conduct a thorough, accurate performance review. This is will reduce the stress levels going into the review as there will be no surprises.

Gain Insight from Co-Workers

Talking with people who work closely with the employee will help you to gain further information on the strengths and weaknesses of the individual. This is known as a 360-degree review and can include feedback from co-workers, customers, vendors, and subordinates. These are the people who likely know the worker best as they interact with them the most, so it is beneficial place to go for further insight.

Provide Information Ahead of Time

Inform your employees about how the review will be conducted and how their performance will be evaluated ahead of time. Some managers provide the employee with their evaluation form before the review, so they are able to process it and have an emotional reaction alone as opposed to feeling blindsided and flustered in the face-to-face meeting. This provides employees with the framework of what to expect and will reduce some of the anxiety that comes along with a performance review, making the process smoother and more effective. It also allows the employee to perform a self-assessment using the same criteria as the manager.

Have a Conversation

Treat your employee respectfully by actually participating in a conversation with them. While it is important for you to discuss their performance, you shouldn’t be doing all the talking. Make sure you are engaging with the employee by asking questions and actually listening to what they have to say. You should document the employee’s feedback directly on the performance review document. Sitting in a room and lecturing the entire time will make that person feel attacked and uncomfortable, and will make them less likely to open up to you. The process will be much more effective if you understand the employee, so you are able to focus on the best strategy for improvement in the workplace.

Be Goal Oriented

Discuss the changes and additional expectations in the individual’s job description as they approach their next year. Providing the employee with a list of personal goals during the review session will help them to understand their part in achieving the overall goals of the company. In this conversation, you should convey support for the employee and excite and encourage them to improve, even if they are already a top performer.

WageWatch can help you to establish a budget for market compensation, salary ranges, including merit pay, based on a well conducted performance review. We have over a decade of experience working with industry associations and employer groups, providing online salary, wage, compensation and benefits surveys. To learn more about our services, please call 480-237-6130 or contact us online.