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March 26, 2010

HR Fact Friday: 12 Questions to Measure Employee Engagement

There’s a reason some things are called “oldies but goodies”. It is because they stand the test of time. Such is the case with a Gallup Organization poll conducted back in the mid 1990′s designed to measure worker engagement.

The Gallup Organization began creating a feedback system for employers that would identify and measure elements of worker engagement most tied to the bottom line–things such as sales growth, productivity and customer loyalty.

After hundreds of focus groups and thousands of interviews with employees in a variety of industries, Gallup came up with the Q12, a 12-question survey that identifies strong feelings of employee engagement. Results from the survey show a strong correlation between high scores and superior job performance. Here are those 12 questions:

  • Do you know what is expected of you at work?
  • Do you have the materials and equipment you need to do your work right?
  • At work, do you have the opportunity to do what you do best every day?
  • In the last seven days, have you received recognition or praise for doing good work?
  • Does your supervisor, or someone at work, seem to care about you as a person?
  • Is there someone at work who encourages your development?
  • At work, do your opinions seem to count?
  • Does the mission/purpose of your company make you feel your job is important?
  • Are your associates (fellow employees) committed to doing quality work?
  • Do you have a best friend at work?
  • In the last six months, has someone at work talked to you about your progress?
  • In the last year, have you had opportunities at work to learn and grow?

Source: Workforce.com. Reprinted with permission. Copyright 1992-1999 The Gallup Organization, Princeton, NJ. All rights reserved. Gallup and Q12 are registered trademarks of The Gallup Organization.

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March 25, 2010

Compensation: A Matter of Philosophy

Filed under: Compensation — Tags: 10:08 am

Not surprisingly, employee compensation is typically an employer’s most significant cost.  Frequently, organizations experience high employee turnover, which leads to increased training costs and a loss of continuity in implementing their strategic objectives. In fact, some experts estimate that the ultimate cost of training an employee and helping them develop the necessary skills is close to one year’s salary.

Given the considerable investment required to hire and retain top quality employees, it is vital that your compensation program support the company’s overall goals and objectives. Does your current compensation program do this?  If not, it may be time to define or redefine your compensation philosophy.

The primary reason for developing a compensation philosophy is to establish and communicate the purpose of your organization’s pay system. This white paper purposely does not include a sample compensation philosophy, so as to eliminate the temptation to “cut and paste” your philosophy.

However, through years of consulting experience, we can share that the most common issues addressed in the compensation philosophy statement are:

  • Goals of your compensation system
  • Relevant market and competitive position, and
  • How individual pay decisions are made

Generally, the goal of any compensation system is to attract and retain quality staff.  But, do you also want your system to reward staff? Motivate staff?  Encourage career growth? If so, your system must be designed to support these goals.

Secondly, defining your market position is not as easy as saying that you want to be competitive.  In most organizations, the market for labor depends on the job.  For example, clerks and other entry level jobs are usually recruited locally, within a 30 mile radius of the organization.  Supervisors, technical staff and mid-management jobs are frequently recruited regionally.  And the labor market for executive level jobs, especially in larger organizations, is often national in scope.  So, before a decision can be made to be competitive, or perhaps be a pay leader in the labor market, you must first define the relevant market.

Finally, individual pay issues can also be influenced by many factors.  For example, are employee pay rates based on performance?  If so, what role do performance appraisals play?  Is overall organization performance considered?  What about position in range – are employees close to the minimum eligible for more aggressive increases?

For many organizations, these are tough issues to address.  But ultimately, the answers to these questions help define your compensation philosophy and overall corporate culture.

A word of caution.  Defining your compensation philosophy is not a “once and done” undertaking.  Ideally, an organization’s compensation philosophy should be reviewed regularly to make sure it still supports the goals, objectives and direction of the company.

In closing, when you have defined your philosophy, and ensured that it supports the company objectives, communicate it to your staff.  Some companies include their compensation philosophy statement in their employee handbook, others communicate it one-on-one during pay discussions.  Either way, for employees, pay satisfaction begins with pay education.

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March 24, 2010

Drug Use Among Employees Declining

Filed under: Employment Law — Tags: 1:59 pm

There’s some good news in employee drug use data released by Quest Diagnostics.  Employee drug use is declining and the use of hair and urine samples in the testing confirms that. Hair tests show that cocaine use has decreased 35% and methamphetamine use 55% since 2005.  Interestingly, newer testing methods involving hair samples do find many more instances of drug use.  In the first 6 months of 2009 cocaine was found in 3 of every 1000 urine tests on applicants and employees, while hair tests found it in 32 of 1000.  Methamphetamine was found in 1 of every 1000 urine tests and 9 times in hair tests.

Hair tests, while more expensive, are more accurate because they can identify drug use going back 3 months.  Urine tests can find drugs within 1-3 days of use and so can more easily be “beaten” by those tested.  They’re most useful following workplace accidents or to follow up on suspicious employee behavior.

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March 22, 2010

Sexual Stereotyping and Adverse Employment Decisions

Filed under: Title VII — Tags: 1:58 pm

An 8th Circuit Court of Appeals decision found that an employer, who fired an employee because she did not fit within sexual stereotypes (not feminine enough), violated Title VII.

The employee, a night desk employee at a motel, had received several merit pay increases and positive customer feedback.  Consequently, her manager sought and received approval (over the phone) from a corporate director of operations to put her in a daytime front desk job.

All was fine until the director stopped by in person and found the employee wasn’t “pretty enough” lacked the “Midwestern girl look” that the motel chain desired.  The employee, by her own admission, wore men’s shirts and pants, had a more masculine appearance, and had even been mistaken for a male.

The director ordered the manager to put the employee back on the night shift.  When the manager refused she was asked to resign.  The employee was later fired…and then sued.  The court found for the employee, holding that the discrimination would not have occurred but for the individual’s sex, violating Title VII.

Note that federal law still does not prohibit discrimination based on sexual orientation (although many states do).  Rather the court found discrimination “because of sex…,”   a confusing distinction, I know.   [Lewis v Heartland Inns of America].

The 8th Circuit covers North Dakota, South Dakota, Minnesota, Nebraska, Iowa, Missouri, and Arkansas.

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March 19, 2010

State and Feds Move to Ban Credit Checks of Job Applicants

Filed under: General HR Buzz9:07 am

The slow economy has already led a bunch of states to look at banning employers from using credit checks to screen applicants. Now, the federal government is considering a ban, too.

Legislators’ reasoning goes like this: If someone’s out of work and consequently piling up debts, how is that person supposed to climb out of a hole when those very same debts make the person unemployable?

Following that reasoning, Congress is looking at a bill that would ban the use of credit checks as a hiring tool.

Already, 16 states have proposed such bills or have some sort of ban in place.

States looking at legislation: Connecticut, Georgia, Illinois, Indiana, Maryland, Michigan, Missouri, New Jersey, New York, Ohio, Oklahoma, Pennsylvania, South Carolina, Vermont, Wisconsin.

States that have legislation in place: Hawaii and Washington; Oregon has passed legislation that will take effect July 1, 2010.

U.S. Rep. Steve Cohen, D-TN, has introduced a similar legislation in Congress.

Note: Just about any existing or proposed legislation doesn’t ban credit checks for jobs in financial fields or where potential employees might have access to company funds or financial records.

Source: HR Morning Jim Giuliano

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HR Fact Friday: 2010 Salary Increase Budget Update

Filed under: Compensation,Salaries & Pay — Tags: , , , 6:00 am

After the first two months of 2010, worldwide salary budgets for the year had declined slightly from projections reported in September 2009, according to results from the 2010 Culpepper Salary Increase Budget Update Survey. While many companies remained conservative with salary increases, an increasing number reported improved confidence about unfreezing salaries and rolling back salary cuts.

This survey drew on salary increase data collected in January and February 2010 from 765 participating organizations across 86 countries and 17 international geographic regions.

The survey findings reveal that:

  • Projected salary increases for 2010 decline slightly. Since September 2009, projected base salary increases for 2010 across all jobs and locations decreased from 2.88 percent to 2.77 percent. Excluding salary freezes, projected base salary increases declined from 3.25 percent to 3.21 percent.
  • Fewer companies freeze salaries. The number of companies planning to freeze salaries in 2010 increased slightly from 12 percent to 14 percent. However, this is a marked improvement from 2009, when 37 percent of companies froze salaries.
  • Salary freezes thawing more quickly. In September 2009, 51 percent of companies were planning to unfreeze salaries by the end of 2010. Since then, 70 percent of companies have unfrozen salaries or plan to unfreeze salaries in 2010. The share of companies uncertain about when they will unfreeze salaries declined from 45 percent to 30 percent.
  • Fewer companies reduce salaries. In 2009, 13 percent of companies reported that they cut salaries. Only 1 percent plan to reduce salaries in 2010.
  • Rollback of salary cuts accelerates. In September 2009, 52 percent of companies were planning to reverse salary reductions by the end of 2010. Since then, 73 percent of companies have reversed salary reductions or plan to in 2010. The percent of companies uncertain about when they will reverse salary cuts declined from 40 percent to 27 percent.
  • United States salary increases. Base salary increases in the U.S. are projected to climb from an actual average increase of 1.66 percent in 2009 to 2.47 percent in 2010.
  • Canada salary increases. Base salary increases in Canada are projected to rise from an actual average increase of 1.07 percent in 2009 to 2.54 percent in 2010.
  • Regions with the lowest base salary increases. Base salary increases in Canada, the U.S. and the Eurozone are lower and less volatile than in other regions.
  • Regions with the highest base salary increases. Base salary increases in South America and Africa are higher and more volatile than other regions.
  • Global salary range structure increases. Average global salary range structure increases across all jobs and locations are projected to rise from 1.25 percent in 2009 to 1.47 percent in 2010.
  • Promotional Increases. Average promotional increases are projected to decline slightly from 7.37 percent in 2009 to 7.32 percent in 2010.
  • Timing of base salary reviews. Most organizations review base salaries annually on a common focal date.
  • Base pay philosophy. Nearly 70 percent of companies have a base salary philosophy with an objective to match or lead the market and to pay salaries at or above current market levels.

Recent Trends

From late 2008 through mid-2009, the number of companies freezing salaries for all employees increased to 37 percent, which drove average base salary increases to historically low levels.

Overall, salary budgets for 2010 have significantly risen compared to 2009. However, a relatively high number of companies plan to freeze salaries in 2010, and average projected base salary increases are still much lower than recent years prior to 2008.

Source: SHRM, 3/15/2010

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March 17, 2010

15 Compensation Mistakes That Can Provide You The Opportunity To Make Friends With The Federal Department Of Labor Or State Officials

Filed under: Compensation,Salaries & Pay — Tags: , , 9:38 am

Paying employees is not as simple as it appears. Complex federal and state laws and regulations govern compensation practices. Making even one of the following mistakes can cost you a lot in money, time and bad publicity. Go to www.dol.gov for good information regarding federal Fair Labor Standards Act (FLSA) requirements.

  1. What Do You Mean I Have To Pass A Test? Or, Tales From Exempt Employees Who Aren’t. Many organizations have some employees misclassified as exempt who are really nonexempt and must be paid overtime. Remember, the Department of Labor has very specific tests that must be met before an employee may be classified as exempt.
  2. We’ll Just Pay Her A Salary, That Way There’s No Overtime. Or, Return Of Exempt Employees Who Aren’t. The FLSA exemption tests include specific job duties and requirements. Simply paying someone on a salary basis vs. an hourly wage doesn’t make her exempt from overtime.
  3. That’s Not Really Work Time. Failing To Pay Nonexempt Employees For “Hours Worked.” Starting early, working late, working through lunch, or doing work at home would all be “hours worked” and considered paid time. Employees can’t “volunteer” to work a little extra or to work “off the clock.” Don’t forget about travel time and training which can also be compensable under certain circumstances.
  4. Oh, It’s Close Enough. Not Correctly Tracking Overtime. Do you have an accurate system in place? Is it reliable? Consistent? Do you “round” appropriately?
  5. Take Next Friday Off. Using “Comp Time” Improperly. Private sector employers need to be especially careful regarding “comp time.” Basically, in those settings, compensatory time only exists within the workweek. Comp time can’t be given instead of overtime. The public sector works under some different rules. (more…)
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March 15, 2010

Texting Banned for Commercial Drivers

Filed under: General HR Buzz — Tags: 1:50 pm

In a move toward improving safety on the road, the U.S. Department of Transportation (DOT) has announced guidance that prohibits texting by drivers of certain commercial vehicles such as large trucks, buses and vans.

The guidance is effective immediately and applies to interstate truck and commercial bus and van drivers with at least 9 passengers.

Affected employers should ensure that their policies are updated to reflect this change and that employees are informed.  All employers should make sure that they are aware of state restrictions on texting and use of cell phones while driving. An increasing number of states are addressing this issue.

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March 12, 2010

HR Fact Friday: Nearly 25% of Workers Put Retirement Plans on Hold

Filed under: Benefits,Retirement — Tags: , , , 8:46 am

Almost one in four workers in an Employee Benefit Research Institute survey postponed plans to retire this year, with 29% of those citing the poor economy as the reason.

The key other reasons cited by the 24% who put off retirement plans included a change in employment status, 22%; inadequate finances, 16%; and the need to make up stock market losses, 12%, according to EBRI’s 2010 Retirement Confidence Survey, released Tuesday, March 9.  Also, only 69% of workers and their spouses this year reported having saved for retirement, down from 75% in last year’s survey.

Still, 16% of workers said they were very confident about having enough money for a comfortable retirement this year, up from 13% during the previous year. Twenty-seven percent this year said the total value of their savings and investments in general, excluding the value of their primary home and any defined-benefit plan, were less than $1,000, and 54% said the total value was less than $25,000. Annuities or other guaranteed-income product were purchased by 14% of retirees, and 11% of workers said they were very likely to do so.

“Americans’ attitudes toward retirement have clearly tracked the economy the last couple of years, and that seems to be the case in 2010,” said Jack VanDerhei, EBRI research director and a co-author of the survey, in a news release. “Unfortunately, while their attitudes are stabilizing, their preparation for retirement is not. A distressing number of people have no savings at all.”

The survey, based on telephone interviews in January with a total of 1,153 workers and retirees age 25 and older, was conducted by EBRI and research firm Mathew Greenwald & Associates.

Source: Workforce.com, Doug Halonen of Pensions & Investments, a sister publication of Workforce Management.

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March 11, 2010

Arbitration Restrictions for Federal Contractors : Just the Beginning?

Filed under: Employment Law — Tags: , 12:53 pm

Dramatic changes may be coming regarding the use of mandatory arbitration agreements in the workplace.

The recent Department of Defense Appropriations Act (the “Franken Amendment,”) significantly narrowed  the use of mandatory arbitration in employment agreements between defense contractors (and subcontractors) and their employees or independent contractors.

At present, the legislation applies to defense contractors, but all federal contractors could be next.  In fact, the proposed Arbitration Fairness Act would restrict mandatory arbitration for all types of employers.

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