Either Way, The End of a Long Week

Happy Friday! I had to work a full 5 days this week (ugh) but even for those who only worked 4 days, this probably seemed like a looooonnnnngggg week. Why? Well NBC's The Body Odd says it's because we as humans are used to a routine and once you change that up, it messes with our minds:

"If I had to venture a guess, I would say that it could be because four-day work weeks are much less common and are a deviation from the typical five-day work week," Marc Buehner, a psychologist at the U.K.'s Cardiff University who has studied the psychology of time perception, said in an email. "There are some laboratory studies that show that predictable events are perceived as shorter than unpredictable events."

The blog post is interesting because it talks about perception and how, as humans, when we get out of our routine, our perception gets messed up. That Monday routine got squashed because the week started on Tuesday and now you can't figure out what the heck is going on. So while you're bemoaning your 5 or 4 day work-week, imagine how long a 3-day work-week would have been and be glad--just kidding!

Have a great weekend!

Compensation 103: Salary Structures

An important part of compensation administration is the salary structure. According to Compensation Programs and Practices 2012, 85 percent of organizations have a formal salary structure in place. What are the pros and the cons of using a formal salary structure? What type of salary structures can be used to attract and retain talent?  How often should an organization update its salary structures?  How does HR know when it is time to create a brand new salary structure? These are essential questions we will answer in this issue of Astronology: Compensation 103: Salary Structures.

At its most basic, a salary structure is the manner in which an organization carries out its pay philosophy. As mentioned in our Compensation 101 and Compensation 102 articles, formal salary structures are used to create fairness among employees and protect an organization from possible federal law violations. Having a salary structure, however, is a commitment.  Organizations must keep the pay ranges up to date, or run the risk of paying non-competitive wages or being unable to attract new talent.

There are two leading types of salary structures that an organization can use: the Internal Equity Structure or the Market Pricing Structure.
 

Internal Equity Structure

The Internal Equity Structure is described as a salary structure that “examines positions and creates levels of pay, with large jumps in salary rates for the higher positions in the company and smaller jumps for lower-level jobs where promotions may not have so much effect.” In the Internal Equity Structure approach, the primary focus is on the value each job brings to the organization.  Organizations typically increase each grade’s midpoint salary range by 15% of the midpoint for the range below. Such ranges provide room for developing employee skills and an employee’s value within the organization. In addition, by using range maximums, the employer sets a limit for what the organization will pay for all jobs and levels.  Without an eye towards the external market, however, the Internal Equity Structure may not reflect current market pay rates.

 

The Market Pricing Structure

The Market Pricing Structure is quite simple.  The pay range for each job is tied to the market pay rate.  “Market” is defined by the region and industry of interest to the organization.  For some positions, the local market is relevant, while for others, a regional focus on industry specific competitors is pertinent.  Many organizations use this approach for developing salary ranges, as it is easy to understand and gives consideration to competitive pay.  

As a result of the external focus, the pay range structure determines which positions should be paid more than others, while reflecting yearly rate increase trends. For organizations with strong competition, this structure is ideal as it incorporates the compensation activities of targeted counterparts and what they may be paying employees in the same position.  The Market Pricing Structure is often used when organizations have employee retention concerns.

The Market Pricing Structure, however, does not place a primary emphasis on each position’s value to the organization.  Rather, the value and range placement reflects that of the external market.  As such, positions with a shortage of talent, or “hot” skills, may command a higher pay range than an organization would otherwise want to pay.

 

One or the Other?

While it seems that organizations will use either the Internal Equity Structure or the Market Pricing Structure, in reality most employers use a blend of the two.  “The majority of our clients use the Market Pricing Structure, while keeping an eye towards internal equity,” explains National Director Jennifer Loftus.  “An employer cannot focus strictly on the external or the internal, to the detriment of the other.  Employers who successfully attract and retain employees keep their eye on both distinct balls, and achieve balanced compromises in situations where the external and internal dictate widely differing grades and ranges.”

As mentioned in the previous Compensation 101 and 102 articles, an organization’s salary data, ranges, and structures should be reviewed at least once a year to ensure on-going effectiveness.  However, it is sometimes necessary to conduct interim reviews to ensure market competitiveness and internal equity.  What are some signs that your organization may need to change its salary structure?  Employee dissatisfaction can be an indicator. Astron Solutions offers a variety of options in employee satisfaction surveys that allow organizations to obtain employees’ feelings in regards to their employment. Designing a survey to address organizational compensation issues can be used to determine whether your organization may be in need of adjustment.  In addition, an inability to hire and / or retain employees can also indicate the need to review an organization’s salary structures.  While other factors such as work conditions, location, and managerial style may be driving recruitment and retention issues, it is important to first review the compensation structure to ensure it is not creating these employee challenges.

When was the last time your organization reviewed its salary structures?  With spring right around the corner, now is a great time for a compensation tune up!  Contact Astron Solutions today for a free consultation to learn more, and enjoy a more effective 2013.

Happy President's Day (and a return to Baseball)

I wanted to wish everyone a very Happy President's Day to all of our readers from everyone here at Astron. If you're not a lucky one who has off today (I am one of the unlucky), then take solace is this: President's Day means that the start of baseball is right around the corner. Before the next major holidays, we'll have Spring Training Games, the World Baseball Classic, and, yes, Opening Day.

Baseball season reminds me of this Forbes article I read back in the fall. It talked about Joe Girardi's leadership while battling both personal and professional adversity. As the article wrote about Girardi in mid-October:

Girardi’s recent achievements are probably some of his finest as a manager. Besides winning his third American League East title and narrowly defeating a tenacious Baltimore Orioles ball club during the regular season and in the American League Division Series, he accomplished these amazing feats with a heavy heart. Girardi’s father had passed away of Alzheimer’s disease on October 6th and kept the matter private until an obituary was going to run in a local paper back in his home state of Illinois. As Girardi was being peppered with questions regarding Alex Rodriguez’s performance and the Yankees’ chances of success in the postseason, he compartmentalized his numerous tasks and didn’t let a personal tragedy affect his job. Girardi put the needs of the ball club in front of his own anguish and grieving.

This is not meaning that this solution is right for everyone but as a leader of a ballclub, an organization or even a small group, the key is to always find a way to provide an example for other employees--especially in the face of adversity. There is a lot to be said for people who lead through good times, but the best leaders are the ones who are able to navigate the tough times and still come out on top. And although the Yankees didn't win the World Series last year, Girardi's leadership in the face of the tough time the team faced, while not always perfect, was a big reason they got as close as they did.

Guest Post: My First Experiences with HR

The guest posts roll on this week with Michelle's post about her first experiences in HR--and how they reminded her that the interviewing process is very similar to the dating process. Without further ado, here is what Michelle had to say:
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So I was thinking back to one of my first experiences with Human Resources and it was when i was trying to get my job secured while i was still in college. I was in touch with the HR director of the agency that I worked for right after college but I remember how hard it was to reach her and to get a definitive answer. I had all my interviews (traveled to New York City and back to Boston all in one day to get them all done) and followed through with HR every week or so to see if there was any confirmation of my hire. I would usually get her voicemail and not receive a call back for a few days. When I did hear back, she would always say something like "we're still in the process of finalizing your position"

After a while I got incredibly frustrated (I really wanted to have my job in place before I graduated). I felt like i was being strung along and i also remember feeling like "why would i want to work for an agency that can't get their act together?"

In other words, I felt that her lack of a definitive answer for so long reflected poorly on the agency. And I also felt like because she was the only person from the agency that i was in communication with, I remember feeling like she was the person who represented the company.  In other words, she embodied the company.

I guess what I'm trying to say is that before you start working somewhere, the HR person is inevitably the only person you get to communicate with. That's why it's important for them to be in open dialogue about your job's status etc, because in the end, you get an impression of the company based on the only person that you are in communication with. Had this HR director handled my job status better, I would not have started having doubts about the agency as a whole.

I was thinking it could be good advice to HR managers when they realize that they are the face to the company for someone who is applying and it is therefore important to handle/manage expectations properly during the whole interview/hiring process. If the manager is hard to get a hold of or they are not sharing concrete information, it can make you feel like the company as a whole is not some place that you would want to work at.

Also, this fits with my whole theory about how applying for a job and interviewing at a company can feel like dating--did the recruiter/HR person like you during the interview (analogy: first date)? will they call you back for a 2nd interview (analogy: second date)? There are so many similarities: from the way you dress to make a good first impression to the thank you (kind of like after a date you write a "thank you" text saying you had a good time and you hope to see the person again). A bad first impression, though, can be a long way to saying "no thanks" to both a prospective job and a prospective relationship.

Guest Post: Making a Final Decision without Facetime

The story by Alaine on Monday has inspired me to reach out to friends in order to find out more about what is really going on during the job search process and for 20-somethings who are out in the working world. One friend (who wished to remain anonymous) had two stories to tell. Here was his first:
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I had a final round interview on the phone for a company after having the first round on the phone. The firm was in New York but the partner was located in London so it was necessary to do this by phone. There was never a chance for facetime so I had the full one-hour interview. I was told there was one position with about ten candidates.

I received feedback from the hiring manager who told me I was a runner-up for the position but unfortunately, did not get the role. It was quite frustrating and difficult to not have the chance to interact, especially for a job with such high stakes.
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Thanks to the friend for sharing that. What he shared here seems to be too typical of companies today who have too little time and money for interviewing. Too often candidates get through a rigorous process only to have their candidacy determined in an impersonal way (and a way that really doesn't allow for a true evaluation of talents). Not only was this a bad way of going about things for him, but it's hard to imagine that it's a good idea from a company perspective to hire someone that they've never met before in person (anyone who follows the Manti Te'o controversy knows that the phone is not the best way to determine someone's validity). This friend is now employed at another company so it didn't stop him from finding a job in general but this job left him wondering "what if..."

Ask The Expert: Underperforming and Trying to Climb the Ladder

We've got some great questions for the "Ask The Expert" series so far, so please keep them coming. If you have a question, you can contact Jennifer or myself under our "Contact Us" tab on the top of the page. We look forward to hearing your questions (and getting you answers!). This one comes from an anonymous source who says "this is sort of an emergency--can I get a response by Wednesday???" Well we're a day early, anonymous, and here is what Jennifer had to say:
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Question from Anonymous

What do you do with an employee who requests more responsibility/promotion but you feel that they aren't going to do any better than the job they are currently preforming?

Answer from Jennifer

Wow, the situation you’ve described is a delicate one.  On the one hand, you want to celebrate the initiative that the employee has taken in requesting additional duties and responsibilities.  On the other, it appears that the employee currently has some performance deficiencies that need to be enhanced first before promotions can be discussed.

Thank the employee for taking the initiative to approach you, and explore why he / she chose to do so at this time.  In that exploration, you may find out the root cause, such as too many years in the same job, a desire to earn more money, pressure from home to have a job with a “better” title, or taking a cue from a friend who recently did the same.  That root cause can inform your response. 

If that exploration does not yield any actionable information, however, you will need to take a different approach.  Find out before your meeting with the employee your organization’s policy on promotions.  Can they happen at any time during the year, or only when annual performance appraisals are being conducted?  Does an incumbent need to be in the job a certain amount of time, such as one or two years, before being considered for a promotion?  Your employer’s policy may hold the answer you seek for the conversation.

If neither of these approaches work, however, you’ll have to be honest and upfront about why a promotion isn’t a possibility at this time.  For example, if work output is a consideration, explicitly outlining for the employee the necessary promotional criteria will be helpful: “John, I appreciate your interest in and enthusiasm regarding growth opportunities here at Company XYZ!  All our employees in position X [produce Y widgets per hour / successfully manage at least Z client engagements / have employee turnover below A%].  We need to help you develop your skills in this area.  Let’s jointly identify some specific goals for you to accomplish and training opportunities to take advantage of in the next 6 months to get you on a potential track for promotional consideration.”  The position’s job description may also have promotional criteria included which can help in this discussion.

You know the employee and the organizational culture best – what I’ve described here may be effective, or may need some wordsmithing to make the situation an eventual win-win for all.   Also remember that you must watch your language to not include any promotional job guarantees.  If the employee misconstrues what you say, they may think an oral contract was created during the meeting, which creates a different set of issues to deal with down the road!

Good luck!  Please let us know how the conversation goes.

Compensation 102: Job Evaluation

The importance of job evaluation is simple. In order to create a competitive yet equitable compensation system, organizations need clear job classifications.  There are also federal laws to take into consideration when designing compensation systems.  Title VII of the Civil Rights Act prohibits employment discrimination based on race, color, religion, sex, or national origin.  The Equal Pay Act protects men and women who perform equal work in the same establishment from sex-based pay discrimination.  The Age Discrimination in Employment Act defends the working rights of individuals 40 years of age or older.  Job evaluation is essential for organizations to be in compliance with these laws.  In short, job evaluation evens out possible wage wrinkles. It also helps to creates clear guidelines for an organization to follow with respect to employees’ wages. This week’s Astronology discusses the importance of job evaluation and the four primary evaluation methods.

The Objective of Job Evaluation

The purpose of conducting job evaluation is to fairly determine the monetary value / worth of a job in relation to other jobs in an organization.  It’s the bridging gap between the relative worth of a position to the organization and the pay range structure into which the position falls. The thought of having to review every job position in an organization can be daunting, especially if the organization is large. Fortunately, this is not always necessary.  Select the key job positions, positions that address or cover the type of work essentially performed in each department.  Using job evaluation results, one can develop appropriate salary grades and decide on other compensation issues. Job evaluation can also help clarify job descriptions that could be used in determining performance standards and creating performance appraisal systems.

It’s imperative that job evaluations are reviewed periodically. Work conditions change over time. For instance, technology advances and new services to benefit the organization become available, potentially changing a position’s grade level or even eliminating certain job requirements / positions.  But where to start!  There are four job evaluation methods to consider, which we will explore here.
 

The Ranking Method

Considered the simplest job evaluation method, in the Ranking method jobs are listed from highest to lowest value / merit in relation to the organization. This listing can also be done according to level of difficulty in job performance. In this method, jobs are examined as a whole.

This method is highly subjective, which could result in upset employees and low job morale among employees with lower job rankings. This morale impact can be detrimental to an organization’s culture.  The ranking method, however is more time and cost efficient than other job evaluation methods.  The ranking method is often appropriate for smaller organizations, or those with only a few jobs to evaluate.
 

The Classification Method

Guest Post: Lessons In Job Hunting

Hope everyone is recovered from Super Bowl Sunday (should I say "got their power back"?). We're back today with a great guest post from a friend who writes about what it's like from the perspective of a job searcher. It's not an easy time to be looking for a job but she has some good lessons from her experiences. Without further ado, I kick it over to Alaine:
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I have learned a lot about looking for a job through my five months of job searching. This is particularly true now when many employers are not hiring (or not hiring as much) and there is a LOT of competition for jobs. Also, I will admit--I’ve been a little picky in my search- I have a master’s degree and prior work experience, so I feel like I can do that. I’m looking for a job that I will enjoy and want to go to everyday, not simply JUST a job.  Here are a few things I’ve learned through my search:

The most important lesson I’ve learned is the value of networking; It’s literally the only way to get a job these days. There is so much competition, employers are receiving hundreds of resumes, and it’s hard to distinguish oneself on paper. The best thing to do is to know someone at the company- they can make a recommendation to HR or give you the inside scoop on how to apply, which is a million times more valuable than being another paper in a stack of resumes.

Don’t waste your time on online job applications.  Searching for and applying for jobs online can take hours- don’t waste your time! It may be useful for someone looking for an “Administrative Assistant” type of position but not for a more specific position, especially if you have an advanced degree and want to be picky. Employers receive boatloads of these – they’re impersonal and you’ll have a much better chance if you actually know someone at the company or at least have had an informational interview with them.

Networking isn’t only about schmoozing at industry events or conferences: informational interviews are perhaps the best way to expand your professional network and make solid connections. Talk to everyone that you can who might be related to the field you’re looking to work in. Use your existing networks of fellow alumni, professors, family and friends. An informational interview is a great way to get your name out there and also to learn more about the field, specific companies, and specific types of positions- it can be very helpful to guide your search.

Be proactive about meeting people and finding positions. Investigate the companies and organizations that you want to work for. Who are the big companies in your field? Who are the up-and-comers? Find out their main business operations and which employees seem to run the show. Has the company put out any press releases, or been mentioned in any articles? Try to find someone at the company to reach out to for an informational interview to find out more about a certain sector, position, or business operation. If you can, use your existing networks to make a connection at the company- LinkedIn is great for that!

Keep up with industry news and events. You never know who will show up at these things- it could be your next employer! Even if you don’t make a good connection at an event, it’s a great talking point at a future interview.

You never know who knows who or what can lead to what. Your best bet is to put yourself out there, meet as many people as you can, and stay on top of industry news and events for good talking points.