Category Archives: compensation

Job Satisfaction Hits New High

According to the Conference Board’s latest job satisfaction survey, the rate of job satisfaction among U.S. workers is at the highest level it’s been since 2005, with nearly half (49.6 percent) of workers reporting that they’re satisfied with their jobs. The Conference Board notes that job-satisfaction rates have increased steadily since 2010.

Of course, this also means that half of U.S. workers are not satisfied with their jobs. The latest number is also a far cry from the highs hit in 1987 and 1995, when the Conference Board’s survey found that 60 percent of American workers were satisfied with their jobs.

The strengthening economy is a big factor in the higher job-satisfaction rates in the latest report, says the Conference Board’s Michelle Kan, who co-authored the report. “The rapidly declining unemployment rate, combined with increased hiring, job openings and quits, signals a seller’s market, where the employer demand for workers is greater than the available supply.”

In other words, employees today have more options than they’ve had in some time, and they know it — and HR needs to pay attention to their needs. Indeed, while the Conference Board report finds that workers are most satisfied with their colleagues (59 percent), interest in their work (59 percent) and their supervisors (57 percent), they’re much less satisfied with their organizations’ pay and promotion policies. In fact, the five job components with the lowest satisfaction are promotion policies (24 percent), bonus plans (24 percent), the performance review process (29 percent), educational/job training programs (30 percent) and recognition/acknowledgement (31.5 percent).

Gad Levanon, the Conference Board’s chief economist for North America, tells the Wall Street Journal that the high satisfaction rates of 1987 and 1995 are unlikely to be repeated soon.

“It was a whole different world in terms of employee-employer relationships,” he said. “There was much more loyalty. People looked to their employer for more than a job, in many cases.”

Nevertheless, said Levanon, a satisfaction rate of 55 percent may be achievable.

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The Many, Many Vacation Days Not Taken

Here’s a new buzzword to add to your lexicon: “under-vacationed.” It’s how Project: Time Off, which regularly surveys American workers on how much time they take off from work, describes the 55 percent of U.S. workers who left vacation days unused last year, according to its latest survey. Previous Project: Time Off research showed that 42 percent of Americans were leaving vacation time on the table.

Project: Time Off is sponsored by the U.S. Travel Association, which obviously stands to benefit from more people taking time off to, you know, travel. But the research seems pretty legit, using polling firm GfK to conduct random representative samples of the U.S. population. This year’s survey queried 5,641 American workers working at least 35 hours per week, including 1,184 managers who are company decision-makers.

American workers have lost a full week of vacation, the research finds. Previous research conducted by Project: Time Off found U.S. workers’ vacation usage had fallen to 16.0 days a year—nearly a full week less than the average between 1978 and 2000, when it was 20.3 days per year. In the latest analysis of vacation usage, American workers took 16.2 days of vacation in 2015.

This year’s survey marks the first time that a majority of American workers have left vacation days unused. Previous surveys showed that 42 percent of Americans were leaving vacation time on the table. These “under-vacationed” Americans left a total of 658 million unused vacation days, far exceeding the previous estimate of 429 million unused days, according to Project: Time Off.

It’s not quite as bad as it sounds: Previous Project: Time Off surveys were conducted mid-year and asked respondents how much vacation time they anticipated using during the year. However, the latest survey was conducted in January and required that respondents know the exact amount of time they’d used during the previous year.

Why are so many Americans leaving their vacation time unused? Fears that employees would return to a mountain of work (37 percent) and that no one else can do the job (30 percent) topped the list. People who ranked higher in the organization also expressed concern that it’s harder to take time off when you hold such positions (28 percent). Twenty-two percent cited the idea that employees want to show “complete dedication” to their company and job.

People with high-ranking positions can have a big impact on changing this trend for the better: Eighty percent of employees said if they felt fully supported and encouraged by their boss, they would be likely to take more time off.

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Getting Your Messages ‘Heard’

You can create the best comp and benefit plan in the world, but it will be all for naught if you don’t get your communication strategy right.

dv1492011Despite the many and varied tools available to them, employers continue to struggle to communicate in a way that ensures their messages are being heard. Sure, employers may be getting information into the hands of their employees. But is it really resonating with them?

The above point wasn’t lost on those responsible for programming WorldatWork’s 2016 Total Rewards Conference and Exposition in San Diego, which featured several sessions focusing on comp and benefit communications.

(Indeed, each of the half-dozen sessions I attended included at least a couple of slides emphasizing the critical role of effective communications.)

The value of a well-crafted communication strategy was certainly evident in a session titled  “Cutting-Edge Communication Strategies to Drive Employee Engagement.”

John Hyttinen, senior director of total rewards at ADP Canada, detailed the key role communications played as ADP went about revamping its global bonus program. Business leaders, he said, realized they needed to do a better job leveraging multimedia in order to communicate those changes to employees.

To that end, ADP engaged GuideSpark to build a solution for delivering content to its multigenerational workforce. (GuideSpark provides internal communication platforms that specialize in areas such as benefits, financial wellness and talent management.)

In the session, GuideSpark’s CEO and Co-Founder Keith Kitani provided attendees with a series of tips aimed at creating more effective communications, including …

  • Think holistically about your employee-engagement touch points. “To build a connection, you need consistency” from beginning to end.
  • Make sure your communication includes a theme. “Are you trying to get above the noise or just check off a compliance box?”
  • Put your employees at the center of your communication. “You need to connect on a much more personal level” and “help them understand what’s in it for them.”
  • Personalize your communication. He pointed out that “35 percent of Amazon’s revenue is driven by recommendations.”
  • Use a multi-channel approach.
  • Leverage trends such as social, mobile and Big Data.
  • Embed communications in the employee workflow so employees are able to get the information when they need it.
  • Measure your success. “It’s really important that you measure what you’re doing” and use that data to modify your approach.

At least one presentation at the conference addressed the challenges of getting your message across to the organization’s business leaders. No easy task, either.

In a session titled “Storytelling: Influence Leaders and Make a Business Impact,” Britt Wittman, director of executive compensation at Intel, outlined ways benefit and comp leaders can effectively use storytelling to make their cases.

Speaking to a packed room, Wittman explained how stories, when properly used, can be a powerful tool that helps “people remember key messages” and “drives them to act.”

To prove his point, Wittman (who, as the session’s title suggested, focused his presentation on influencing business leaders) shared a story involving former Intel CEO Paul Otellini. “One of the reasons Intel’s stock had gone sideways [for a while] despite strong financial results was the fact that the story Paul was telling The Street was not a compelling vision of the future.”

(Wittman prefaced his remarks by saying that, while Otellini was the “goat of this story,” he was a good CEO.)

You can present the data, Wittman said, but that alone isn’t going to inspire people to take action.

The key to delivering a good story, of course, is to know your audience, Wittman said. “The more you know that audience,” he explained, “the more likely your story is going to have an emotional connection. If you’re talking to someone who hates sports, building sports analogies into your presentation simply isn’t going to work.”

Fortunately, he said, benefit and comp professionals are often presenting to the same individuals—so “leverage what you know about them.”

Effective storytelling, Wittman said, requires setting the context. You need to make sure business leaders understand what you’re talking about, he said, adding that doing so could make a huge difference in getting a “yes” rather than a “no” to a particular request.

 

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Worrisome Numbers for Working Moms

Mother’s Day may be three days behind us, but the time still seems right to direct attention to CareerBuilder’s most recent poll focusing on working moms.

The Chicago-based employment website and HR software provider’s 2016 Mother’s Day survey questioned 2,186 hiring and HR managers, along with 1,002 working parents (593 working mothers and 409 working fathers) with children 18 years old and younger who still live with them at home.

The picture the findings paint looks all too familiar, unfortunately: Despite successfully shouldering the same load on the job and at home, working moms’ salaries still lag behind those of their male counterparts.

(In some cases, moms are actually taking on more responsibility with the kids, as 58 percent of working mothers said they spend four or more hours with their children every day during a typical workweek, compared to 41 percent of working dads who said the same.)

For example, at least two in five of the mothers and fathers surveyed indicated they were the sole breadwinner in their family. This survey, however, finds fathers in this role nearly three times as likely to earn $50,000 or more, and three times more likely to bring in a six-figure salary.

Naturally, all parents sometimes struggle to balance the personal and the professional, as 23 percent of working mothers and 26 percent of employed fathers say they’ve missed three or more significant events in their children’s lives in the last year.

Many mothers still feel they can strike that elusive work/life balance, though. Eighty-two percent of those surveyed feel they can “have it all.” Just 50 percent, however, feel they are equally successful in their jobs and as parents, with 36 percent considering themselves more successful as a parent and 14 percent feeling they excel more at work.

All that said, it seems working mothers—and working fathers, for that matter—wouldn’t give up the work/life juggling act even if they could. Overall, 40 percent said they would be unlikely to leave their jobs if their spouse or partner made enough for the family to live comfortably. In addition, 55 percent of working moms suggested they wouldn’t be willing to take a pay cut if it allowed them to spend more time with their kids (66 percent of working dads indicated as much).

Still, while many women balancing family obligations with professional duties feel they have a handle on both, the issue of pay equality continues to make the job more difficult.

“The pressure to succeed in both arenas can be tough, especially if you’re not earning enough money to take care of financial demands at home,” said Rosemary Haefner, CareerBuilder CHRO, in a statement highlighting the Mother’s Day survey findings. “More working moms today feel that they are able to balance the needs of their professional and personal worlds, but household income still remains a major concern.”

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Merck Suit Certified as Collective Action

In case you missed it, last week the U.S. District Court for the District of New Jersey granted plaintiffs’ motion to conditionally certify a collective action under the Equal Pay Act in the $250-million gender-discrimination suit filed against pharmaceutical giant Merck & Co. Inc.

The Court further ordered that thousands of female Merck sales representatives should be given notice and an opportunity to join the case. The lawsuit alleges that Merck systematically discriminates against female sales representatives, and pregnant women in particular, in pay, promotions and other terms and conditions of employment. The Court held that plaintiffs presented sufficient evidence of discrimination in pay to warrant notifying women across the country.

The Court’s decision also affirmed that an internal Merck policy purporting to govern contact between Merck employees and “third parties” does not bar Merck female sales representatives from communicating with Plaintiffs’ counsel and joining this lawsuit.

Some background on the case: In May 2013, Kelli Smith filed a class action lawsuit in New Jersey federal court alleging that pharmaceutical giant Merck & Co., Inc. (“Merck”) discriminates against female employees in its sales force in pay and promotions. Ms. Smith also claims that Merck discriminates against pregnant women and women who take maternity leave.

Early in 2014, several other women from across the country who had experienced similar discrimination at Merck joined Ms. Smith’s lawsuit. They too alleged class wide discrimination against female employees in pay and promotion, and on the basis of pregnancy. Although Merck sought to have the plaintiffs’ claims dismissed, the court denied Merck’s request.

Just how big this collective action will get is ultimately anyone’s guess, but the case should act as a stark reminder that “equal pay” is still largely a concept — and not a reality — in today’s business world.

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Meet the 25 Highest Paying Companies

In case you missed it yesterday, Glassdoor released its list of America’s 25 highest paying companies, and the results show consulting and tech companies are writing the biggest paychecks to workers.

The top five are:

1. A.T. Kearney

  • Median Total Compensation: $167,534
  • Median Base Salary: $143,620
  • Industry: Consulting

2. Strategy&

  • Median Total Compensation: $160,000
  • Median Base Salary: $147,000
  • Industry: Consulting

3. Juniper Networks

  • Median Total Compensation: $157,000
  • Median Base Salary: $135,000
  • Industry: Technology

4. McKinsey & Company

  • Median Total Compensation: $155,000
  • Median Base Salary: $135,000
  • Industry: Consulting

5. Google

  • Median Total Compensation: $153,750
  • Median Base Salary: $123,331
  • Industry: Technology

According to Glassdoor’s latest report revealing the 25 Highest Paying Companies in America for 2016, several companies are offering employees six figure paychecks. This report is based on each company’s median total compensation, compiled by looking at salary reports at companies in which employees have anonymously and voluntarily shared both their base pay and other forms of compensation (i.e. commissions, tips, bonuses, etc.) over the past year.

“This report reinforces that high pay continues to be tied to in-demand skills and higher education, which in part, is why we see several companies on this list among the consulting and technology industries,” said Dr. Andrew Chamberlain, Glassdoor Chief Economist.

Salaries are sky-high at consulting companies, he says, due to “barriers of entry” in this field, which refers to employers wanting top consultants to have personal contacts, reputations and specialized skills and knowledge. In the tech sector, he adds, “we continue to see unprecedented salaries as the war for talent is still very active, largely due to the ongoing shortage of highly skilled workers needed.”

Interestingly enough, the press release announcing the findings mentions that high compensation levels may not actually lead to high employee-engagement numbers:

While the companies on this list pay handsomely and a Glassdoor survey shows salary and compensation are among peoples’ top considerations before accepting a job, Glassdoor research also shows that salary is not among the leading factors tied to long-term employee satisfaction. In contrast, culture and values, career opportunities, and trust in senior leadership are the biggest drivers of long-term employee satisfaction.

Something to ponder: Would you rather have your company attain a spot on this list next year, or would you prefer higher employee-satisfaction numbers?

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Survey: Employees Only ‘Moderately’ Engaged

The good news, according to the Society for Human Resource Management’s latest Employee Job Satisfaction and Engagement Survey, is that employee satisfaction is at its highest level in 10 years, with 88 percent of respondents saying they’re satisfied with their jobs. The bad news? The number of employees who say they plan to look outside their current company for a new job is also up, at 45 percent. SHRM announced the survey results at its Talent Management Conference in Orlando earlier this week.

The keyword for holding on to employees is spelled R-E-S-P-E-C-T: 67 percent of the 600 employees surveyed ranked “respectful treatment of all employees at all levels” as “very important” to job satisfaction, followed by overall compensation/pay and benefits, job security and “opportunities to use skills and abilities,” which tied for fifth place with “trust between employees and senior management.”

As for employee engagement, actual engagement levels are little-changed from last year’s survey, said Evren Esen, SHRM’s director of survey programs, coming in at 3.8 out of 5 with 5 being the highest, showing that employees are “moderately engaged.” Satisfaction and engagement aren’t always aligned, with engagement typically tied to employees’ connection and commitment to their work and organization, she said.

One of the top factors affecting employee engagement are the engagement level of their coworkers, said Esen. “If employees don’t see those around them as being engaged, this will impact the overall level of engagement in the organization,” she said.

Being engaged means feeling that you’re an important part of the organization’s mission, she said.

“The opportunity to use their skills and competencies is of continuing importance to employees – it gives them a sense of engagement and pride,” said Esen. HR should develop a “skills matrix” for employees to get a better sense of “what they do well, not just what they do” in their everyday jobs, she said. This will make it easier to determine if there are other ways employees could be contributing and – by extension – feel a tighter connection with the organization.

“Nobody is going to feel sustained doing the same job over and over,” she said.

Dissatisfaction with their compensation and benefits was a top reason why employees plan to look for new jobs, the survey finds. Sixty three percent of employees chose overall compensation as “very important” to them, yet only 23 percent described themselves as “very satisfied” with their own compensation. Similarly, 60 percent chose overall benefits as very important, but only 27 percent said they were very satisfied with their benefits.

“Companies have only reinstated some of the cuts to benefits they made during the Great Recession,” said Esen. “Organizations really need to focus on what benefits their employees really want, and offer the ones that appeal to all demographics of their employee base.”

HR must also keep in mind the needs of a multigenerational workforce, she said.

“Millennials want their ideas to be valued and not dismissed just because they’re younger and less-experienced,” said Esen. “Boomers want to be valued for their experience, but often feel they’re not sufficiently valued for it. It’s important to keep both groups satisfied.”

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Commemorating Equal Pay Day

OK, so it may not be the most celebratory of occasions on the year’s calendar, but it is nonetheless well worth an HRE Daily post to acknowledge the persistent pay gap that has plagued women ever since joining the workforce many decades ago.

To that end, HREonline.com just posted a piece this morning titled “Pay Equity: New Challenges, New Pressures, New Strategies.” Written by Mercer’s Stefan Gaertner, Gail Greenfield and Brian Levine, the piece takes a look at the gender-pay landscape and what new challenges HR faces in ensuring a balance between the genders when it comes to pay:

More aggressive regulation for pay equity is clearly a trend. We believe this represents a stern call to action for employers to review their job and pay structures as well as analyze pay differentials to ensure that they understand their data, with a focus on pay gaps and business-related factors that may or may not explain them.

Employers also need to rectify any issues identified. We find that the all-too-common “wait and see” approach is not effective — once a plaintiff knocks on the door, it is too late to craft a story or actually address gaps in an orderly fashion.

Elsewhere in cyberspace, there’s an interesting piece on CNN.com titled “One Way to Close the Pay Gap for Women,” written by Mary Ellen Carter, an associate professor of accounting with the Carroll School of Management at Boston College, whose research focus is executive compensation.

In the piece, Carter argues that organizations can shrink or eliminate the gender-pay gap by including more women on corporate boards:

In new research, my co-authors and I found that pay gaps are much lower when more women serve on corporate boards.

For example, the proportion of female directors at the Massachusetts company TJX (parent of T.J. Maxx, Home Goods and other apparel and home goods retailers) has hovered around 30% since 2006.

And in our analyses, Carol Meyrowitz, who retired as TJX CEO in January, was paid fairly, relative to executives of comparable companies as she rose through the ranks.

TJX illustrates what our overall analyses show — that this effect flows deeper into the executive pool. Other top-level female executives, like chief financial officers, are also better paid when the board includes more women.

It’s true that there is no easy answer or silver bullet to create an even playing field in all respects, but here’s hoping by the time the next Equal Pay Day rolls around, more organizations will be working earnestly to ensure the compensation rates between men and women will be even closer than it is today.

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Key Lessons from the Tyson Decision

ThinkstockPhotos-485982240I’m sure many of you have now read or heard about the Supreme Court’s Tyson vs. Bouaphakeo decision on Tuesday upholding a Court of Appeals decision in the Eighth Circuit,  which sides with Tyson workers at an Iowa pork-processing plant.

The employees’ main grievance was that they did not receive mandated overtime pay for time spent “donning and doffing” protective equipment.

In its attempt to reverse the judgment, lawyers representing Tyson took aim at the case’s class-action status, making two arguments. First, they argued the class should not have been certified because the method used to prove injury assumed each employee spent the same time donning and doffing protective gear. Second, they argued that certification was improper because the damages awarded to the class could be distributed to individuals who did not work any uncompensated overtime.

In delivering the majority opinion (6-2), however, Justice Anthony Kennedy wrote that …

“A representative or statistical sample, like all evidence, is a means to establish or defend against liability. Its permissibility turns not on the form a proceeding takes—be it a class or individual action—but on the degree to which the evidence is reliable in proving or disproving the elements of the relevant cause of action.”

In this instance, Kennedy said, the court’s holding is in accord with the 2011 Wal-Mart v. Dukes decision, which supported the blocking of a class-action against the retailer.

Yesterday, I asked Patrick Bannon, a partner in the Boston office of Seyfarth Shaw LLP, to share his assessment of the Tyson decision.

It’s pretty narrow, as SCOTUS decisions go, he said, because it’s largely based on the fact that it accepted a study by an expert hired by the plaintiff as valid evidence, but it didn’t really look at the particulars of the study. “They assumed,” he said, “that it was valid because the defendant hadn’t challenged the study. In a case in which an employer challenges a study with shaky statistics and not good evidence, the outcome could have been quite different.

“If there’s a cautionary tale here for employment attorneys,” Bannon said, it’s be careful of plaintiff lawyers bearing statistics.

Asked if HR leaders should be doing anything differently in light of the decision, Bannon noted that it does raise the question as to whether employers should be tracking donning and doffing time, even if it’s time employees don’t need to be paid for. “That’s a question HR folks should at least be thinking about,” he said. “It’s not always right for every workplace to try to measure tasks that you don’t think are really work, but if it turns out that it really is work and you were wrong about it, then you start down the road that Tyson Foods was on.

“If you’re an employer with a lot of employees who are all doing a repetitive task every day—and if there’s a way to measure what they’re doing that’s not too intrusive or confusing—then I’d be thinking about it,” he said.

Other employment attorneys noted that the case took on additional importance because of its connection to the Wal-Mart ruling, in which the Court rejected the use of statistical evidence to provide a pattern of discrimination.

Seth Rafkin, a partner in the New York and San Diego offices of Cooley LLP, pointed out that …

“The key threshold at issue in the Tyson and Wal-Mart cases was whether the positions and work experiences of class members were sufficiently similar such that the statistical evidence based on [a] sample of class members could reasonably be relied on as representative of the experience of other class members. In the Wal-Mart case, the Court found that the positions and experience of class members was so diverse that the statistical evidence could not be relied on as representative of the class’ experience. In contrast, the class in the Tyson case all worked at the same facility, performed similar work and were subject to the same policy.”

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Why Young Women Really Leave Their Jobs

If you’re thinking that the talented young women departing your organization are going home to start families, you might want to think again.

In compiling its special report, What Executives Need to Know About Millennial Women, the International Consortium for Executive Development Research recently interviewed executives and “rising female stars” between the ages of 22 and 35 at a group of seven organizations including BlackRock, eBay and HubSpot, according to ICEDR, which supplemented these interviews with surveys of talent leaders and millennials from a handful of other companies.

In doing so, ICEDR study authors Lauren Noël and Christie Hunter Arscott found the majority of business leaders they interviewed were laboring under the impression that most millennial women leave their companies around age 30 in an effort to better balance work lives with family demands, or because they are about to start a family.

The millennial women taking part in the study, however, told a different story.

Indeed, 65 percent of young female respondents said that finding another job with better pay was the top reason why they quit their last job. A lack of learning and development opportunities was cited by 62 percent of millennial-age women, while 56 percent pointed to a dearth of “interesting and meaningful” work, and another 56 percent walked away because of what they saw as an imbalance between the effort they expended and the compensation they received.

This isn’t to say that twenty- and thirty-something women don’t value work/life balance, though, as 54 percent of women polled indicated they would soon be starting a family and would like to spend more time with them.

If the execs taking part in this study were taken aback to find their responses didn’t quite jibe with those of their young female stars, they weren’t the only ones.

“When considering the main reasons why women around age 30 leave organizations, one might expect the primary influences to be motherhood or difficulty integrating work and life,” the authors write in the report.

“Surprisingly, young women identified finding a higher paying job, a lack of learning and development, and a shortage of interesting and meaningful work as the primary reasons why they may leave.”

Unexpectedly, the authors also found female participants in their 20s offering similar responses.

“There is a popular perception that millennials’ desires will change over time. Interestingly, our survey revealed that women in their 20s largely do not leave organizations for different reasons than women in their 30s,” the authors write, noting that four of the five top reasons for leaving were identical across the two age groups.

Noël and Hunter Arscott—both millennials—offer some “key actions” employers can take to help attract, engage and retain female employees in this age group.

For example, they urge leaders to provide extra support to women during key transitional phases in their professional lives, “including university to first job and changing roles. Start early and pursue targeted interventions at critical career and life junctions.”

Employers must also understand that millennial womens’ input has “broader talent implications” throughout the organization, say Noël and Hunter Arscott.

“By implementing strategies and programs informed by the needs of millennial women, leaders will simultaneously be addressing what matters most to broader talent pools.”

Ultimately, “motherhood is not the primary reason women around 30 are leaving organizations,” they write. “Focus on what matters most: pay women fairly, challenge them with learning and development opportunities, and provide them with meaningful work.”

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