March 2014 – Knowledge Pay Website

Job Descriptions: A Strategic Competitive Advantage?

Posted on March 27, 2014 by Chris Kelley Posted in Job Descriptions, Job Evaluation, KnowledgePay

Let’s be honest. Job descriptions suck. Writing and administering job descriptions can feel like a waste of time and they take you away from the ‘real work’ that you have to do. That is, until you step back to consider how a focused commitment to doing job descriptions well can actually set you apart as a company and become part of your competitive advantage. If you really are engaged in a “war for talent”, you need to think about how such a mundane task like job descriptions can be such a cornerstone to human resource strategy.

Speed and Accuracy in Hiring Process

Ever schedule job interviews with applicants who turned out to be unqualified? The cost of ambiguity in your job descriptions can cost you both time and money. Clear delineation of qualifications, educational requirements, responsibilities, experience and any other positive attributes required will weed out the unsuitable applicants before they have a chance to waste your time.

Market Pricing Hybrid Jobs

Posted on March 25, 2014 by Chris Kelley Posted in Market Pricing, Salary Surveys

Comparing Apples & Oranges in Compensation

One of the biggest market pricing challenges we face in compensation is what to do with those pesky hybrid jobs. What are hybrid jobs? As defined on page 35 of The Ultimate Market Pricing Glossary,

Organizations are forced to restructure, de-layer, take out costs, etc., and as a result, end up combining jobs that used to be done by two or more people and dump the work onto just one person. The resulting job is a hybrid of two or more traditional jobs that each may have been benchmark jobs.

A hybrid job is a challenge to market price because of its potpourri of job duties and how it compares (or doesn’t) to the classic benchmark jobs from our salary survey library.

The first hurdle to overcome may seem pretty basic, but we first have to let go of the notion that you are going to find a salary survey that will have that unusual job you created during your last reorganization efforts. Salary surveys are going to have benchmark jobs that other companies in your market are likely to have. Not these one-offs.

So what’s a comp pro to do? Well, there are a few techniques that you could consider and the trick will be to figure out what is most appropriate fit with your compensation philosophy and the objectives of your market pricing efforts. A compensation philosophy that recognizes a balanced approach to ensuring internal equity along with external competitiveness can lead to a different result when compared to a firm whose philosophy is heavily weighted toward external competiveness.

Gainsharing – The Phoenix Rising through the Ashes

Posted on March 19, 2014 by Chris Kelley Posted in Compensation Consulting, KnowledgePay

Gainsharing plans have been enjoying somewhat of a renaissance in popularity the past couple of years as the economy starts to recover from the near economic collapse in 2008 – 2010. While these plans originally date back to the 1930’s, they seemed to have peaked in popularity in the early 2000’s . During the darkest times of the recent recession, there seemed to be no new activity in terms of creating new plans and other plans that had been in place were scrapped. As the markets have started to improve though, the prevalence of gainsharing plans is starting to regain its popularity.

So what is a gainsharing plan anyway? The definition of a gainsharing plan is actually part of the identity crisis that caused them to fall out of favor during past decade. A quick search for gainsharing terminology will give you various definitions, but the most common is that they are a compensation incentive plan where a portion of the company’s profits are share with employees. Employees have ‘skin in the game’ and so they are incentivized to improve performance and productivity. Therein lies the major problem according to Brad Hill of Tandehill Human Capital. “First and foremost, gainsharing plans are a commitment to employee involvement where sustained improvements in productivity can lead to a financial reward. The key difference in that definition is that we focus first on gainsharing being a commitment to employee involvement, not compensation.”

Pay Transparency: Culture is Key

Posted on March 14, 2014 by Chris Kelley Posted in Compensation Consulting, KnowledgePay

There’s still a lot of talk lately about the idea of pay transparency, but many organizations still not willing to take the plunge. Why the hesitancy? One argument I hear is that pay information is personal and it’s a private matter between the organization and employee. Others respond with view that employees just don’t have a need to know what coworkers earn. Or, my favorite, employees can’t be trusted with this kind of information. Therefore, when social media management company Buffer recently announced it was posting salaries online, you can imagine the uproar.

However, as Buffer CEO Joel Gascoigne emphasized in a December blog post, “Transparency breeds trust, and trust is the foundation for great teamwork.”

Buffer isn’t the only company choosing to share ‘confidential’ information. Thirty-employee SumAll chose to make performance reviews as well as salaries public. They say the program is a success. This may be due to how well they implemented the program. Specifically, they built the right culture as well as developed complementary policies and programs that are transparent as well as defensible.

Equal Dollar Incentive Payouts

Posted on March 10, 2014 by Chris Kelley Posted in Compensation Consulting

Incentive pay plans for front-line employees can be a cost effective way to get more bang for your payroll bucks. There are also tremendous employee benefits to be gained from a well-designed plan. Higher pay opportunity is an obvious benefit, but employees can also feel better inclusion, engagement and teamwork that can come as result of a properly designed plan.

Despite this seeming like a no-brainer, win-win, it is possible to have an otherwise great incentive plan that lands you in hot water with the Fair Labor Standards Act (FLSA) with a simple oversight of the administrative roles that are in place to protect workers.

According to the US Department of Labor, employees who are nonexempt under the FLSA need to be compensated at 1 ½ times their Regular Rate for all hours worked over 40 in a work week. Any incentive payments made to nonexempt employees need to reflect any overtime premium dollars employee may have earned. In other words, the amount of incentive pay needs to get added the employees’ Regular Rate and then the overtime premium is paid out on top of that.