Compensation Force

The Immeasurable Value of Being Needed

We must never underestimate the power of being appreciated ... or of feeling needed.

Earlier this week, my Compensation Cafe colleague, Globoforce's Derek Irving (author of the new book Winning with a Culture of Recognition, your new definitive source on strategic recognition) wrote a great post on the value of saying "thank you".  Derek referenced studies from the Journal of Personality and Social Psychology which have quantified the impact of expressing gratitude on our willingness to complete a work task.  He also shared a quote, an excerpt of which I show below, on the reasons people respond as they do to being thanked.

...the experimenters found that people weren’t providing more help because they felt better or it boosted their self-esteem, but because they appreciated being needed <emphasis mine> and felt more socially valued when they’d been thanked.

People do more because they appreciate being needed.

This brought to mind a conversation I had many years ago with a manufacturing technician who worked in a plant where I had been charged with doing a wage audit.  It was suggested that I have a one-on-one with him, as he was a long-tenured employee who was widely respected by his peers.  He detailed for me, in a matter-of-fact manner, what he (and his fellow workers) felt were some of the biggest employment concerns, including the work environment in the old and poorly ventilated plant, the aging and outdated equipment, and the below-market wages.  I asked him why he stayed, when he could very likely have found a better paying job (because he was right about the wages), in a more up-to-date plant, somewhere else right in the local area.

I'll never forget his response.

He looked at me for a few seconds, then drew himself up straight in his chair and replied:  "Oh, I couldn't leave this place.  They need me here."

Certainly we should pay employees competitively for the skills they bring and the contributions they make in the workplace.  I think we are sometimes reluctant, however, to let our top employees know how important they are, how much we need them, because we feel it gives them a bargaining chip we'd rather they not have... when the truth is that this might solidify their commitment to our organizations in a way money never could.

HR Metrics: The Basics

Looking to measure and track the effeciveness of your HR department, but not sure where to begin?

The Where Great Workplaces Start blog has a helpful post featuring 20 Common HR Metrics & Their Formulas to get you started.

Check out the excerpt of five common HR metrics below, then click through to their site to see the rest, along with some tips to consider in choosing the best ones for your organization and purpose.

 
Hat tip to Jon Hyman.

Taking a Stand for Quality in the Pay Data Battle

Today, any motivated employee can gain access to salary  data which suggests, nay proves, that he or she is underpaid by many thousands of dollars.  Yes, even in these tough economic times, and you know the practice will only increase as the economy recovers. 

One of the most frequent questions I get from my own clients is how to deal with the line of employees out their door waiting, Internet pay survey printout in hand, to discuss their compensation.

I recommend meeting this challenge head on by focusing on pay data quality and establishing a policy that features specific quality criteria that all pay data must meet (whether brought to the table by Human Resources or an employee) before it will be considered relative to the organization's compensation practices.  Armed with a formal policy on pay data quality, the HR pro is positioned to  have a productive discussion about the specific data an employee brings in.

Let's face it.  Data of questionable quality exists both on the Internet and in traditional hard-copy format from publishers who should know better.  The good news, though, is that the same quality standards should apply regardless of the source of the pay information.  Here are some of the standards I recommend for assessing pay survey quality, presented for your consideration in developing your own policy.

Survey details its methodology.  The survey data provider should detail its process for contacting or soliciting participants, collecting and analyzing data, and checking data quality and validity.  A lack of transparency around survey process and method only makes me wonder what they are trying to hide.

Survey data is collected from an independent, verifiable source.  I would consider the Human Resources, Finance or Payroll departments of an employer to be independent, verifiable sources of pay data.  Surveys based on data submitted by recruiting firms or self-reported by individual employees (both of which stand to gain by inflating pay rates) are not considered reliable by most compensation professionals.

Survey identifies participants.  If not a list naming participating organizations, there should at least be a demographic profile which outlines information like their number, size, location, industry and other characteristics.  If you don't know where and from whom the data is drawn, how can you determine whether it truly represents your organization's labor market? 

Survey provides job descriptions adequate for matching.  Proper job matching is the foundation for successful market pricing.  Matching by job title alone is fraught with peril given the wide variances in titling practices that exist among different organizations and industries.  Survey job descriptions should include education and experience specifications, as well as a listing of job purpose and typical responsibilities. (And it is sometimes necessary to remind the employee that the employer sets job price by the job responsibilities and requirements, not the years of experience they happen to possess.)

Survey reveals effective date of data.  Its important to know how current the data is so that its validity can be ascertained.  Given the turbulence in today's labor market, data that is too old -- regardless of whether or not an aging factor has been applied to bring it forward -- may no longer reflect the realities of a particular job's competitive value.

Survey notes sample sizes.  How many organizations and employees are represented in a particular piece of data?  Obviously, data based on 200 employees is more meaningful than data based on 5 employees; without this information it is impossible to determine whether a markedly high or low pay figure is valid, or simply the skewed result of a small sample size.

With formal pay data quality policy in hand, my advice to the HR pro who is approached by an employee with their own competitive information is as follows:

1. Thank them for their efforts in bringing the data forward. (Yes, I know, but really.  If it turns out that the data is valid, they may be doing you a favor.  Just keep your mind open to the possibility.)

2.  Explain (and provide a hard copy of) the organization's policy on pay survey data and quality criteria.

3.  Sit down with the employee and review their information together to ascertain whether it meets the organization's criteria.

To the extent that the employee's information meets the quality criteria (and it represents a valid match for his/her job), it ought to be taken seriously and considered in light of current pay practices for the position and the particular employee.  To the extent that it does not, the occasion should provide a teaching moment for the employee (although the astute HR professional may wish to go afterwards and double check the data used historically to set pay practices for the position, just to ensure that the organization is standing on firm ground).

What's your practice and approach for responding to employee data and the quality questions it often raises?  Got any tips to share with us here?

Image: Creative Commons Photo "Terra Firma" by carbonNYC

Top Perks: Making Jobs Better

I spoke to a group of Human Resource professionals a couple of weeks back.  They asked me about unique perks and benefits being offered by employers.  I wish I would have had this list to share with them...

The Good site (What is Good Right Now) recently published its own slideshow of the Top 20 Perks That Make Jobs Better. A great list, including benefits, perks and special incentives.  Here are some of my favorites (including, yes, a great Google perk):

-At Google, new parents get more than maternity leave: up to $500 of reimbursements for take-out when their newborn’s needs mean no time for home cooking.

-Washington-area Microsoft employees can take leisurely rides to work on one of dozens of WiFi-equipped buses

-Forty percent of IBM’s workforce has no official office

-Employees at the Quiksilver apparel company are encouraged to make time for surf sessions during their workdays.

-Should an employee at the consulting firm Deloitte decide to adopt a child, he or she could get reimbursed up to $5,000 for associated expenses.

-Patagonia offers an employee internship program, allowing workers to take paid time off to intern at the environmental nonprofit of their choice.

-Spouses, children, and parents of employees (and the employees themselves) can fly Southwest Airlines for free.

-Target will connect employees to “wellness coaches,” who help them lose weight, quit smoking, eat healthily, and de-stress. 

-Netflix full-timers not only get unlimited rentals, but also unlimited vacation days, as long as they get their work done.

-Forget relocation assistance: Get hired at the software company 37signals and you can work wherever you currently live.

Click through to see them all!

The State of Tuition Reimbursement Benefits

It's tough (at least in my experience) to get good data on tuition assistance benefits; many of the larger employee benefits surveys don't cover it.  With this in mind, I thought I'd point you to  a recent survey on tuition reimbursement practices, representing the responses of about 1,100 employers, conducted by BLR.

Tuition benefits appear to be on the rise.  BLR finds that 85% of participating employers report offering tuition assistance to their employees, up significantly from the 52% who reported having such a plan in their 2007 survey.

A few select findings and items from the survey:

-Most (77%) employers have a "length of service" minimum required for tuition assistance eligibility; the most prevalent minimum is "one year or more".

-Most (76%) require that courses taken be job related.

-Nearly all (95%) cover graduate level courses.

-Slightly over half (56%) cover professional certification courses.

-For just over half (57%), reimbursement includes amounts for books and supplies.

-For the vast majority (91%), tuition reimbursement is grade dependent.

-Percent of tuition that is reimbursed-

Less than 50% - 8%

At least 50% but less than 75% - 9%

At least 75% but less than 85% - 9%

At least 85% but less than 100% - 3%

100% - 44%

Percent depends on grade earned - 26%

-Maximum tuition reimbursement offered per year-

Less than $1,000 - 6%

At least $1,000 but less than $2,000 - 19%

At least $2,000 but less than $3,000 - 14%

At least $3,000 but not unlimited - 30%

Reimbursement capped only by IRS deductibility - 24%

Dollar limit depends on grade earned - 6%

Click through to see all survey results and participant demographics.

Image: Creative Commons Photo "Stack of College Books" by Jayel Aheram

Bottom Line, What Are YOUR Values Driving?

In a recent well-aimed post, my friend Kris Dunn (the HR Capitalist) laid bare some disquieting truths about corporate values, which ought to prompt some soul searching on all our parts.

Are we clear - really clear - about the kinds of behaviors, mindsets and outcomes we are driving with some of our corporate value-setting efforts?

From Kris's post, where he tees up the cliff notes for an upcoming presentation on values:

-Companies are very consistent in the corporate values they create.  Nice.  All good so far.

-Companies always create collateral around the values.  Hand out the cards, put up the posters.  Still good.

-Broad cross sections of employees, when asked, say they want the values in question.  Good - they're falling in line - they love us.

-Uh-Oh.  When asked, managers want value sets that are dramatically different than what companies are providing.  It seems like since they're accountable for results, they want values that reflect behaviors they believe help them get business results.  They're selfish like that...

-Uh-Oh #2.  When asked, employees identified as high performers want value sets that are dramatically different than what companies are providing.  Shocker - the high performers want values that place a premium on having talent and competing.

I don't mean to speak against corporate values here.  A well-chosen, purposefully lived set of core values can be the moral backbone of an organization and provide a strong set of internal controls.  As long as Integrity, Collaboration and Respect don't slip into practice as Entitlement, Conflict Avoidance and ... Niceness. 

Which brings to mind one of my favorite quotes.  From Malcolm Gladwell:

It [is] the practice of niceness that [helps] keep other values, such as fairness, at bay.  Fairness sometimes requires that surfaces be disturbed, that patterns of cordiality be broken, and that people rudely or abruptly be removed from their place.  Niceness is the enemy of fairness.

The thing is, innovation, disruptive advancements and superior business performance also can require that surfaces be disturbed, that patterns of cordiality be broken, and that people who are making obstacles of themselves be dealt with.  I've encountered more than one organization - and I'm betting you have too - where managers struggle to do this in the face of an overwhelming culture of value-driven Nice.  Which, to Gladwell's point, isn't fair.  Or ultimately productive.

So many aspects of people management require a delicate balancing act.  Could it be that some of our efforts to create and instill corporate values demand a more careful sense of balance as well?

Image: www.marshill.org

Why Merit Pay for Teachers Doesn't Work... And Why We Shouldn't Stop Trying

The results are in.  Findings from a recently released study, the "first scientifically rigorous test" of merit pay for teachers, show us that pay for performance simply doesn't produce results in the public school setting.

Is that it, then?  Are all attempts at performance-based pay and reward reform for teachers necessarily doomed?  What lessons can we, should we draw from this study and its conclusions - and what, if anything, do we do with them?

Check out the debate on the merit in merit pay for teachers in my post today at the Compensation Cafe.  Add your thoughts to the mix.

Image: Creative Commons Photo "national museum of american art and portrait gallery-51" by krossbow

Enough of the "Just Pay Them Fairly Instead of For Performance" Advice. Please.

Pardon the rant, but could those of you advising that we cease our useless efforts to "pay for performance" and instead simply "pay people fairly" please stick a sock in it?

Fairness is in the eye of the beholder, my friend.  Fact is, many employees do not believe that they are being paid fairly if their compensation disregards either their personal performance contributions or the performance of the organizational unit at which they are directing their discretionary effort.  I've spent a lot of time in discussion with employees who are paid within the constraints of so-called "fair" compensation programs which don't allow for performance differentiation at any level or in any manner.  They aren't necessarily happy campers, least of all those busting tail in an effort to excel.

Perhaps I am missing some intended irony in your advice, but I grow weary of hearing the same silly point about fairness repeated.  There are likely some very sound arguments against and counters to performance-based pay, but this is not one of them.

Thanks for listening.

Union Employees & Variable Pay

Yes, union employees and variable pay.  A happening that just might portend a genuine trend.

As part of the results of its 2010 Variable Compensation Measurement^TM (VCM^TM) Survey, shared in a recent complimentary webinar, Hewitt reported the finding that 13% of union employees working at the 130 organizations covered by the study are participating in a variable pay (incentive) plan.

I don't have ready access to historical data on this point (does anyone? share here if you do...), but I'd hazard a guess that this represents an upward tick from a near zero state at some point in the last few decades.   

What factors have driven us to this notable point?  Will we see this develop into a trend in the same manner that it has with non-union employees?

Is this the result of union leaders reading the tea leaves regarding slow growth in base pay and accepting that the earning opportunities of their members look more rosy with incentive pay in the mix?  Is it a sign of budding partnership and the agreement to share success ... or simply a new chip being tossed into the collective bargaining process?

What do you think?