YEE vs REE

When considering an experienced employee's education and work experience for compensation purposes is it better to consider all Years of Education and Experience or only Relevant Education and Experience? The difference being should a company give vacation credit and greater compensation for all of a employee's work and education experience or just that which is relevant to the job the employee will be doing. The same thing goes for promotions or employees seeking career changes. If you do a peer comparison to figure out where the employee should fit in the salary band and level it is much easier to take current year subtract year of high school graduation and come up with a number. However, someone could have taken leaves of absence from work to travel the world, or worked in different careers/industries, not worked at all, and be given vacation credit and additional compensation. On the other hand it is very difficult to do a peer comparison of 3 or 4 people and sift through the details of their work and educational history. Efficiency vs Accuracy or is there a better tool to use. What about people who didn't graduate from high school until mid career or not at all, their number is lower or doesn't have one at all.

Pay for the job? The employee's experience? expertise? education? Pay for performance?

Compensation strategy, policies and practices are required to maintain consistency and equal and fair treatment.

Pay for the Job

In a recent discussion with an HR Generalist, the topic of pay for administrative assistants came up.

HR Generalist -I think that Team Admins should get paid more than they do. Don't you think that they should have a higher pay level than the one they do?

Me (Compensation Analyst) -All admins are paid on the same level. Admins are assigned their work as per their managers. Job's are evaluated based on value -what level of responsibility and accountability does the job have? One position might be busier at times than another, but the work is of the same quality(value). The only way possible I see for the pay level of admins to increase is if the supply(availability) of admins was far less than the demand and therefore having to increase the pay. If an employee is unhappy with their pay, there is nothing preventing an employee from applying to other internal positions, seeking additional education and or changing careers. There is nothing preventing a manager from giving a great performance appraisal and assigning a greater merit increase(pay for performance). The manager also might have a budget for ad-hoc awards or appreciation. Managers could also utilize other tools to increase an employee's engagement such as flexible work hours, additional training, career development work assignments, etc. It's important to find out what the root problem is; the pay, total rewards, the work itself, lack or recognition and appreciation, etc. Once the root cause is known, the most appropriate course of action can be taken.

Policy Review -Market or Cost

I recently did an analysis for the executives to take to the owners of the company for approval.

I was working on what was thought to be a quick project; summarize the current situation, collect the data, analyze the data, provide a few options for recommendation.

The company pays a boot subsidy to all employee required to wear certified safety boots while at work.

So, I summarized our current process, policy and amount.

I collected data from collective agreements, compensation survey results, focus groups and network contacts.

I collected data on the price of boots that met the required standards for the 2 locations in the city where work boots are sold.

I received the total cost of the boot subsidy paid via employee pay stubs.

I analyzed a report of  expense claims for additional boots to see if there were trends of any area/group that went through more than 1 pair of boots a year.

What I found was that the market (other companies) were providing a subsidy/reimbursement greater than the cost of boots.

With a compensation strategy to be p50 or p90, does it make sense to increase the subsidy with the market even if the cost or allowance is more than what is required?

Then there is the additional background information of how frequently is the amount reviewed? How often is it increased as a result of the review. Does the increase and cost ever meet over the period between reviews?

Should the policy be reviewed in terms of who owns the policy, who owns the standards, how should the subsidy be administered as an expense claim or automatically on a pay stub as per meeting eligibility requirements?

What can start as a small project can grow as you seek higher and higher approval.

The underlining fact to point out is that it is called a subsidy not reimbursement and therefore by definition does not have to be 100% of the cost and perhaps a review of the name itself is required.

Stampede –The Rise of the West and Canada’s New Power Elite by Gordon Pitts

Winner of the 2009 National Business Book Award

Pitts present an interesting view on what is currently taking place in Canada’s economic, political, environmental and technological spheres.

With a long term prosperity and developmental view for Canada, Pitts concludes with a list of suggestions:

1. Re-brand Alberta –Change the Image of Alberta
2. Create the Heritage Fund for the Arts, Culture and Social Sciences –Work on Diversifying the economy and providing alternate views, activities and opportunities for Albertans.
3. Run a bullet train between Calgary and Edmonton –Prevent accidents and delays  and Unite the 2 opposing competitors
4. Establish a task force on the oil sands –Plan ahead and figure out a development plan and a reclamation plan
5. Move a major bank to Calgary –Support development through by  readily accessible financial services and support
6. End provincial trade barriers –Enable free movement of employees (recognize certified tradesmen from other provinces) and remove barriers to supply and demand
7. Build universities of excellence –Sustainability & diversify what Alberta has to offer
8. Develop a national talent strategy –Recruit high in demand skilled individuals from other countries
9. It’s no more Mr. Nice Guy –Utilize taxes and ensure a fair portion is received
10. Make over the zero-sum mentality –Think Win-Win
11. Learn to Love resources –Be Proud of what we have and don’t downplay its importance or prestige

For anyone interested in a concise overview of the Canadian politics and economies, this is a must read and provides insightful background. It also warns of the dangers of resentment and if we continue to battle and concentrate on the transgressions we fail to realize and maximize our potential. 

Systems

Systems are a big part of any large organization. Systems are critical to business, so much that if a system fails, employees can be left sitting around waiting for some IT person to come and fix the problem. Businesses and organizations have become so reliant on systems that little to no work is actually done without system involvement.

Obviously I've been working with Systems lately. My theory is that systems are like large filing cabinets or storages rooms...at what point do we get rid of information? Historical data is important, but what historical data serves a purpose? The goal of a corporation is to create wealth for shareholders. How much money is spent in an organization storing data? The square footage paid in lease to store boxes, extra security (Restricted Access) for storage, employing someone to organize the information. Both physical and electronic information needs to be stored and secured.

I was discussing system organization with a System Maintainer. She told me of a Business Analyst who got a document off the intranet -spent 1 month doing an analysis on the data and information to find out that there was a more current edition.

Data is important and critical to making educated business decisions. Therefore data integrity as well as Data organization and labeling are critical. System design is also critical so that you are able to report -pull the required data into reports.

Systems are useful but can cause endless problems -the more "items" you enter into an equation -the more "items" there are to accurately account for and maintain.

Glass Ceiling and Job Worth

The situation:

An employee receives the highest performance rating during their performance review but receives little to no increase in salary. The employee has reached the top of the salary span for the position. Is it ethical to give salary increases to lower performers and little or none to the outstanding performer?

Compensation Advisor says:

Yes, the job is worth a certain amount. If you kept increasing the pay, potentially an outstanding performer who’s in an Administrative Assistant position could earn equal to a professional who is a valued contributor performer. A job is worth a certain amount.

Compensation Analyst says:

What added value is the outstanding performer adding? Would the company be just as well off with someone with less experience (assuming less experience = less salary) in the same position or with lower performance. What added benefit/value is the outstanding providing above what is required and is it responding to a business need?

Manager says:

Well if I can’t give a salary increase, what can I give the employee to reward them for their outstanding performance?

HR Representative:

This situation requires us to think outside the box. Rewards are not simply of a financial nature. When you were a child, what did you parents offer to give you if you achieved a certain task or behaved well? Chocolate. Later Bed Time. Favourite food for supper. Extra Dessert. I’m not suggesting these to be the answer. I am suggesting you think of non-financial rewards that provide some sort of value for the employee.

For example, a special recognition gathering, a conference, a special assignment or project, flexible schedule, additional vacation, VIP parking, job enrichment –additional responsibility, lateral transfer, designing new systems, process, procedures, international assignment, more time to develop mentorship/training program, or appointment to a elite committee.

You could also look at providing a one time bonus. Bonuses are not incentives and are unknown prior to. A bonus could include use of corporate jet for a trip, a spa package, tickets to an event, gift certificates, electronics, or cash. The great thing about a bonus is it is a one time thing and if performance changes it is not a locked in obligation for the company.

Improvement and Innovations Restricted Here

Policies & Procedures are created to enhance and improve operations and business function integrity. The question to be raised is: what happens when the policies & procedures in regards to change prohibit our ability to be innovative, adapt, and change to the ever changing market environment? Does a company suddenly loose competitive advantage, efficiencies and effectiveness when their change management process is too restricted or slow?

Change scares people. It’s not the change, but the inability of people to manage their emotions caused by the uncertainty of change that is the problem. The world is constantly evolving and changing. Avoiding change is counterproductive and prohibits success. Failure to evolve and change makes it more difficult to remain competitive and survive.

When it comes to Business, the expression “Keeping Up with the Jones” holds true in many cases. Supply and Demand do exist in terms of employees. When the demand for employees is greater than the supply there are two options –exit the market (business) or compete. However, the demand and supply is not necessarily equal for all types of employees in a market at the same time, ie) administrative, technical, professional, occupational.

Leaders do right things, Managers do things right.

I took a managerial skill development course. The professor stressed the importance of SMART goals and objectives. He also pointed out the need to stop having meetings about what to do and to make decisions and act.

“You can calculate the influence of the wind on shooting an arrow, but the wind gusts; the wind changes, you will forever be calculating and never shooting. You need to shoot, evaluate, shoot again until you hit the target dead on.” The same holds true in business. Companies never survive on doing research alone; something has to be done with the research. Google and Apple didn’t research forever what customers wanted. They created, and introduced their products to the market got market feedback and introduced upgrades and the next generation of products. Constantly changing, adapting, upgrading, and improving.

If a company has a process or policy that slows down the change and adaptation process, the ability to be competitive slows down if not diminishes completely.

My point, have a goal, vision, make a plan, shoot, review, adjust, shoot and repeat until you hit your target, standing around forever discussing what should be done, doesn’t do anything. Situations, circumstances and target are constantly evolving and changing, so should your strategy and actions.

Retention Strategies –Generational Split

Recently I attended employee forums hosted by the Company CEO of a large oil and gas company. Many different comments and questions arose in regards to compensation and retention. The first thing that comes to mind when creating a retention strategy generally is more money; if we “the company” give people more money than other companies are giving, we will retain people successfully.

This idea calls for a Stop, Look, Listen and Consider.

First, not all employees are worth retaining. The idea of retaining only the best performers and shedding the low performers to reduce costs, increase productivity, and have the best and most efficient workforce.

Secondly, money creates two things:

A) Golden Handcuffs –the feeling employees get when they are unable to leave a job because they fear or know that they are unable to get the same total rewards from another employer. They stay not because they are motivated, high performing or engaged, but because of the financial incentive. As many studies have shown –money does not enhance, improve or create engagement, motivation or high performance.

B) Entitlement –I received this (reward, retention initiative) and expect it regardless of my motivation, engagement, work ethic or performance.

What was suggested by the CEO?

Not financial payments, but career development and advancement opportunity. The idea that “our company” is one in which you are able to spend your career. Advancement opportunities are great; however, the picture is larger than a job for many people. What about location, work-life balance, other variables to contribute to people enjoying their lives and accomplishing their goals?

The greatest concern for employers is to retain the star performers who are driven, ambition and high performers. Employers need to jump on the train with these employees in order to keep them driven, ambitious and performing well.

Generation Gap?

Employers need to be creative in their retention strategies. Not all generations want the same thing from their employers. The younger generation (Y) compared to the older generation (baby boomers) expect more from their employers. Increased flex time, holidays, work life balance, leaves, job rotations, travel opportunities, international work opportunities, projects, education and fast tracked advancement are just some of the expectations generation y have for their employers.