Category Archives: compensation

About that 10 Percent Raise …

… Seems like it will go to all Googlers but one. The company has apparently fired the employee who leaked the information about the across-the-board 10 percent raise to employees.

David Shadovitz wrote about the raise on The Leader Board here, noting that “Don Delves, president of The Delves Group in Chicago, told me this is ‘one of those things Google does because it can.’ Others will look at it and be envious, he adds.

That envy will certainly be tempered by the technology giant’s decision to terminate an employee over disclosure of the information.

A 10 Percent Solution

Is Google serious about retaining talent?

A story in today’s Wall Street Journal reports that the Mountain View, Calif., company will be raising its 23,000 employees’ salaries by 10 percent, effective in January. CEO Eric Schmidt delivered the news in an e-mail to employees, the WSJ said. “We want to make sure that you feel rewarded for your hard work,” Schmidt wrote. “We want to continue to attract the best people to Google.”

To be sure, it’s interesting timing. The decision comes on the heels of a settlement between the Department of Justice and Google, Apple, Intel, Adobe, Intuit and Pixar, in which the six companies agreed to eliminate their no-poaching agreement.

The WSJ article suggested that the move comes as Google “ramps up its battle with competitors, especially neighboring Facebook Inc., in a fight to secure talented staff.”  About 10 percent of Facebook’s employees are Google veterans, the story said.

Earlier this morning, I spoke to Kerry Chou, senior practice leader at WorldatWork in Scottsdale, Ariz., about the announcement. Chou confirmed an across-the-board 10 percent hike is extremely unusual, especially in today’s low inflationary environment. “It does indicate they’re trying to solve some kind of problem, though it’s not clear what that problem is,” Chou says.

(How rare is it? When I googled “10 percent pay increase,” the only other story that came close concerned the Encinitas City Council—near San Diego—which considered a 10 percent pay hike earlier this year.  I doubt I would have fared any better were I to google 20 percent.)

Don Delves, president of The Delves Group in Chicago, told me this is “one of those things Google does because it can.” Others will look at it and be envious, he adds.

There’s nothing inherently wrong with the move, Delves says, but most companies would be “more strategic and calculating” in how they go about doing this. He then pauses a moment and adds: “I suppose the beauty here is it’s a simple, bold move that you can summarize in a paragraph. But it’s also very expensive.”

If the problem is indeed retention, as the WSJ article suggests, Chou says Google might want to manage its expectations. “Pay has more bite for potential employees, but once you have someone onboard and want to retain them, things like culture and technology increase in importance,” he points out.

Perhaps.  But I suspect it won’t hurt.

Pay Scales and Weight Scales

Thanks to the good folks at CBSNews.com, who ran a very interesting story today about some new research from the University of Florida that finds skinny women and overweight men earn more, on average, than their average-sized colleagues:

According to the study, women who weighed 25 pounds less than the group norm earned about $16,000 more per year. A woman 25 pounds above the group norm earned about $14,000 less. Thinner men, on the other hand, made almost $9,000 less than their average male co-worker. 

Now, I get the idea that women who weigh less than their counterparts would make more than their average-size or overweight colleagues. After all, we all live in a society that praises puny and castigates corpulence.

But I admit I was shocked to learn that men who weighed less than the group norm actually made less money than their average-sized colleagues.

And, as a man who has always weighed in on the lighter side of the scale, I’m now wondering if, instead of working harder, I should just start eating more if I want to get a raise.

Read the University of Florida researchers’ paper, which was published in the journal for the American Psychological Association, here.

Study Shows Sharp Divide Between Genders on Boards

Nothing really surprising in this release about new research from Heidrick & Struggles and WomenCorporateDirectors showing a big gender divide between male and female board directors on issues of diversity and pay.

Nearly 400 male and female directors were surveyed on what they see as keys to restoring public trust in corporate boards after the economic crisis. While a majority of women respondents (65 percent versus 35 percent of men) said they believe diversity is paramount in this quest, only about half of men and women directors think their boards are doing a good job of advancing it.

Women also seem to have much greater faith in new regulations regarding executive compensation systems (45 percent versus 22 percent for men), proxy access (38 percent versus 17 percent) and enhanced risk-management systems (40 percent versus 1 percent).

Another finding: More women directors than men felt three or more women on a board made it more effective (51 percent versus 12 percent) and that women brought unique attributes to a board (90 percent versus 56 percent). I’m especially fond of that last statistic … not.

My overall take on this? Since women are still personally struggling with issues of pay and gender equity in the workplace, and in the upper echelons of C-suites and boards of directors, it makes sense that they’re the ones who “get it” when it comes to determining the importance of these issues in building overall corporate trust.

Susan Stautberg, co-founder and co-chair of WCD, says the survey also reflects that “women directors, more than men, seem open to challenging the status quo.”

Executive Comp Gets its Credentials

It’s not surprising that the WorldatWork Society of Certified Professionals has developed a new certification for executive compensation, available in October.

As the Washington-based agency notes in its recent announcement of the move, “In the wake of the economic crisis and continued scrutiny of executive compensation by media and shareholders … executive compensation practitioners are being called upon to design and manage programs that attract, motivate and retain dynamic executives and leaders who have the ability to drive positive business results.”

The new certification — designed for executive rewards practitioners, consultants and human resource professionals involved in the design and administration of executive compensation — would help to “ensure that companies are working with knowledgeable and competent executive rewards practitioners,” the release states.

Don Linner, executive compensation practice leader for the Washington-based total-rewards company, says the alternative — poor executive comp practices — “can lead to intense public scrutiny, organizational instability and turnover.”

It’s about time this expertise became legitimate, test-worthy and trustworthy, especially in this environment. Had something like this been in place several years ago, it might have spared a few organizations I can think of some unwanted publicity.

Pay Gap Favoring Men Isn’t Universal

The gender pay gap, where men typically earn more than women, continues to persist. But according to a story posted on Time’s website today, there’s at least one segment of the workforce where the gap now favors women.

In a just released analysis of data from 2,000 communities, Slingerlands, N.Y.-based market research firm Reach Advisors reports that the median full-time salaries of young women who are unmarried, childless and under 30 are 8 percent higher than men in their peer group in 147 of  the 150 biggest U.S. cities.

Because the research was intended primarily for market-research purposes and not to shed light on HR practices, Reach Advisors’ president James Chung declined to comment for this blog post. But in the Time article, he primarily credits education for the difference.

“For every two guys who graduate from college or get a higher degree, three women do,” the Time article said. “This is almost the exact opposite of the graduation ratio that existed when the baby boomers entered college.”

Chung’s conclusion is certainly in line with other studies that show college degrees result in better wages.

Though the economic advantage sometimes disappears as women age and have families, Chung told Time he believes women may now have enough leverage so their financial gains aren’t completely erased as they get older.

In time, I guess we’ll find out whether Chung is right. But at least for now, it’s nice to see study findings that suggest the pay gap in favor of men isn’t true across the board.

And the Mergers (Uh, Make that ‘Acquisitions’) Continue …

… with today’s announcement that Kenexa will acquire Salary.com.

HR technology expert Bill Kutik, who writes a monthly column for HREOnline as well as co-chairs our annual — and upcoming HR Technology® Conference — has the following reaction:

“Kenexa has long sought a Compensation Management solution to round out its suite of Talent Management applications. Even though Salary.com started life selling compensation surveys to corporations (and radically, even to individual applicants!), it has developed a strong market reputation for Compensation Management software and subscriptions for it have represented a substantial part of its revenue.

 “Recently Salary.com tried to widen its footprint, as outlined in February, and clearly some of those were mistakes, including its acquisition and then sale of Genesys, one of our mainframe HRMS providers. The CEO and founder left between those two events.

“The largest question remaining is how quickly Kenexa can integrate Salary’s software onto its new 2x platform, which is already used for Kenexa BrassRing for recruiting and its existing large-company Performance.

 “On the Wall Street conference call Wednesday morning (both Salary and Kenexa are public companies), CEO Rudy Karsan said that could “take years.” But maybe sooner.”

Everybody’s an Intern!

Came across an interesting legal alert from the folks at Jackson Lewis today reminding employers to pay attention to the rules and regulations governing the use of interns.

Mind you, we’ve heard, read and written about this fairly regularly through the years, but what caught my attention was just how prevalent interns may be in American businesses this fall. Seems the recession’s layoff victims who’ve given up trying to get traditional full-time work anytime soon will be trolling for internships right alongside college students.

Many of you have probably heard that as well, too. I had. I just didn’t know how many there might be, and what a range there would be in years of experience and age.

A survey by CareerBuilder,  included in the alert and released earlier this month, shows more than half of the employers polled saying they’ll probably hire interns as full-time, permanent employees. It also shows nearly a fourth of them saying they’re seeing workers with more than 10 years of experience and those ages 50 and older applying for internships at their companies.

Better check out the criteria from Jackson Lewis on how these “unorthodox” interns should be treated, and paid or not paid. It may be great to have the pick of the litter for positions you’re opening in the coming months, but make sure you don’t crash this handy system by breaking the law.

Unions Hiring Nonunion Workers

“… even unions recognize that union workers are sometimes just too pricey for the job,” writes Brian Doherty on Reason magazine’s Hit & Run blog, referring to the Wall Street Journal story about the carpenter’s union hiring nonunion workers — at minimum wage — to protest at a construction site.

Of course, this is not news to HRE readers. We wrote about the carpenter’s union outsourcing its picket-line duties about three years ago

In our story, we quoted Paul Salvatore, a partner with Proskauer, who was fairly blase about the whole issue, noting that the days of people refusing to cross picket lines for ideological reasons have mostly disappeared.

He also compared the nonunion picketers to ghost writers. “These are ghost picketers, if you will,” he said.

On the Clock: Men vs. Women

The New York Times Economix blog has an interesting post and graph this morning that takes a look at the composition of the American workforce by time of day.

In the post, Casey B. Mulligan, an economics professor at the University of Chicago, posits that one of the reasons women are typically paid less than men is because women work more “desirable schedules.”

According to Mulligan:

“The vast majority of workers perceive work from 9 a.m. to 5 p.m. to be more desirable than work during the off-hours, and many of the off-hours workers are compensated with higher pay for the less desirable schedule. A variety of factors — including, some economists and many women’s rights advocates say, gender discrimination — may cause women to be paid less than men, but part of the reason may be the hours they choose to work.”