Attention! As most of you know, this is the survey you want to pay the most attention to when planning for your 2011 salary budget:

World at Work Salary Budget Survey

Here are a few relevant results for Pennsylvania employers:

High performers in 2011 are projected to receive an average merit increase of 3.7% while low performers are projected to receive .7% 

Actual salary structure increases for 2010 were in the range of 1.1 – 1.3% (depending on exempt, non-exempt or officer status) and are projected for 2011 to be in the range of 1.9 – 2.0%

Hay has provided early salary budget increases. The average has nudged up from 2.6% in 2010 to a projected average increase of 2.9%   Salary structure increases are projected at an average of 2.3%   View the summary and more information about merit increases at Hay Group.

Photo by Rundstedt B. Rovillo

How Much is Education and Experience Worth?

Clients often express a desire to pay for exceptional education and experience and want a policy to support this approach. But the caveat is usually that this wish is only for some, but not all, jobs. What to do?

The answer may depend on whether the organization emphasizes external worth (as measured by the market) or internal worth (as measured by job evaluation).   

A market approach relies on the dynamics of the market to determine whether pay should be accelerated or decelerated to keep pace with the value of experience and education. Due to the availability of sophisticated pay databases, an employer may target a market level, e.g., five years of experience, and pay all job incumbents in a similar range, or allow for pay adjustments based on individual measures of education and experience. (The latter would be typical in a highly competitive market.)

But most organizations rely on a combined approach and build a pay structure that reflects external and internal factors, such as job evaluation. When jobs are evaluated internally, required education and experience is typically acknowledged in the system and a new hire is paid a rate that is in part, based on that internal valuation. Pay, from that point forward, is based on a combination of factors related to performance, market, and yes, another year in the job. The point is, most employers who use the combined approach do not examine pay through the lens of education and experience after hire.

However, the truth is, not all jobs need to be treated equally. Employers can determine which jobs need to be paid for exceptional education and experience. It is a matter of determining which jobs fall in a highly volatile or otherwise tight market.  Look at your recruitment and exit data and job availability and turnover data by industry (see resources below).  Another reason to pay differentially is the difficulty in recruiting to a particular geographic location. Some job skills may be readily available in the areas, others may not. There are, in fact, a number of reasons that constitute a sound basis for policy exception. But whatever the reason, it is important to rely on good documentation of the reasons why the jobs are different, as well as the market data on which decisions are supported.

By the way, two here are excellent sites (free) to explore if you are valuing jobs using the market or job evaluation. You will find detailed job analysis for many jobs as well as market information.

ONET Online

BLS Wages by Area and Occupation

Call me if you have questions or need assistance.

As we begin 2010, most of us are feeling the burden of greater demands at work while at the same time we are less hopeful about improving our compensation package. Many of us are in the difficult position of recommending pay policies that will not be favorably received. What can we do? Stay informed, be as consistent and objective as possible, and look for new ways to motivate and inspire workers.

Does anyone else remember 1983 when the unemployment rate was 10.2%? The rate today has not been seen since 1983. At the time I was a recent college graduate, so my job career began with high unemployment as the “norm”.  I took a job that paid well below what others were paid that were hired only a few years ahead of me. Sometimes I don’t think I ever really recovered and perhaps this experience contributed to my preference for working as an independent consultant.  Experts say graduates today will likely lag behind others in their compensation for years to come.  They will also be more likely to become entrepreneurs. So today, I bring you some resources to keep you up-to-date about compensation issues and wish you much perseverance and steadiness as you traverse the road ahead.

Salary Budget Increases are Less Than Anticipated

The compensation professionals’ main go-to place for salary budget information is the World At Work, and they have recently updated their annual salary budget report. According to their most recent research, actual salary budgets have decreased from 2.8% (anticipated) to 2.5% for 2010.  Employers are continuing to conservative in their outlook and this is influencing pay policy and rewards.  

Some of the ways that employers are motivating their workforce is to increase training and career development opportunities, non-cash rewards (such as recognition programs), flexibility in leave and other benefit programs, monetary rewards for high performers and other high demand employees.

1.4% Increase in Civilian and Military Pay Proposed for Federal Budget

The President’s budget is proposing a modest increase in pay for civilian and military workers for 2011. This follows a 2% increase for Civilians and a 3.4% for Military in 2010.  Although it is early in budget discussions, this suggests a fairly hard line. Read more here

Where do you go for fast compensation data on the market?

Although an in-house custom compensation survey is ideal if you have the time to conduct one, sometimes you need data on only one position, or you need market information fast. If you want to know where compensation professionals go to get up-to-date market data, check out these three sites.  All three are fairly easy to use, but each has different strengths.

1. My colleague in executive compensation recommended www.Salary.com  and I have to agree that the customer support was very good with this company. They provide the smaller organization with the option of purchasing database for a smaller period of time, for instance, a month instead of six months or a year.
2. In the past, I have also used www.payscale.com. The database is user friendly, but I found it to be more expensive and it required a longer subscription period. Here is a sample report on City Manager’s pay: City Manager Pay
3. Another site that I have introduced to clients and they have gone on to use quite successfully on their own, is the Economic Research Institute, at www.erieri.com .  This site is worth visiting even if you don’t subscribe as it contains a plethora of current economic data that is critical when making compensation decisions, such as a cost of living index and an index on changes in salary structures. It is a fairly expensive service but rigorous and once you establish a report and data template (which a consultant can help you with) it is extremely easy to use and can provide excellent real time pay data.

When do you need to hire a compensation consultant?

As a general rule, a consultant is best when you don’t have the time or the in-house expertise to get the job done.  Even if you can access and understand the compensation databases on-line, the learning curve is fairly steep and requires intensive focus to create meaningful interpretations of data.  If you would like to develop these skills in-house, it is a good idea to hire a consultant who will help you train an in-house staff person on the use of compensation databases.

If you focus on transferring skills in house, a consultant can save you money in the long run. If your need is to produce a compensation study, but the ongoing compensation skills are not essential to the organization, then the consultant can save you money in the short run.

Will our country be able to create enough jobs to meet the rising number of people looking for work?  

One of my colleagues in human resources turned me on to an interesting article which examines how long this downturn is likely to last. This is a critical question for business but from an HR perspective requires foresight and thought about future pay strategies.

Hans Wagner, in the Case for Jobless Growth, writes:

The U.S economy is facing a huge challenge to create enough jobs to overcome the unemployment problem that currently exists. If we take the best four years since 1999, the economy generated 8.9 million jobs, slightly over half of what is needed to reach a 5% unemployment rate. If the economy achieves this level of job growth, the unemployment rate will remain over 10% until 2014. The does not count any change in the number of discouraged workers or workers working part time.

Hans points out that within the growth sectors, employers will need employees with higher levels of education and skill, so the challenges for HR in managing increasingly disparate pay levels will be great. Also, it follows that if pay growth is slowed for the less skilled labor force, employers will likely see more union activity.

So thank you Mark for this article reference and here is the link if readers would like to read more.  

Coming up….in my next blog post I will address testing and selection tools used for hiring. Although they can be extremely valuable, employers need to carefully consider how and why they use these tools.  One recent article, in particular, points out why this a matter of urgency. Read ahead and stay informed on this re-emerging issue.

Civil Rights Division Announces Plan to Target Public Employers

One example of what can happen when employees, union and non-union, and management work together, can be found in Montgomery Ohio, a small city not far from Cincinnati.  Several years ago the City implemented a Health Care Committee that relies upon labor, union and non-union, and management to work together to guide the city health care policy and program. Recently I spent some time talking with Wayne Davis, the Assistant City Manager, about their program.

[Note: The Center for State and Local Government published a case study on the City of Montgomery Ohio, titled Employee Leadership in Health Insurance and Wellness Programs.  You can find that link here.

 The goal of the committee was to

• represent employee health care concerns,
• negotiate favorable rates and coverages with insurance providers,
• provide cost effective and comprehensive coverage for the City’s taxpayers and the employees, and
• communicate with work units about key health care issues.

The results have been

• A decline in sick leave usage,
• Containment of health care premiums (they have experienced 1/3 of the average premium rate increases in the Cincinnati region), and
•  drop in average annual medical claims.

The City of Montgomery has successfully developed a culture of employee engagement that works well with both their union and non-union employees. Early on management recognized the need to make deep structural changes in its organization, and worked with the Commonwealth Centers for High Performance Organizations to develop creative paths to a new way of working together in an environment steeped in local government politics and traditions.

The union environment here consists of the FOP (Fraternal Order of Police), the IAFF (International Association of Firefighters) and AFSCME (American Federation of State, County and Municipal Employees). As Wayne puts it, “everyone has skin in the game” meaning everyone has something at stake, and gains and losses are felt by all. The City has spent significant time (over 7 years) and energy working on building this culture which values emotional intelligence, relationship building and keeps the organization vision focused on high performance.

Wayne explains that although it is not easy to alter values within an established hierarchical system, they were able to realize success by essentially creating a parallel organization within the organization, represented by the committee structure, where a different set of rules and values flourishes. In this alternative “team” structure, manifest in the health care committee, title and rank don’t mean anything, and the normal rules governing reporting relationships are suspended in the interest of participation and contribution by everyone on the committee.

When engaged in the team, the focus is on working together to complete a task while sharing commitment to values. He notes that the “values” question is raised whenever needed to keep the team focused. For example, every idea is scrutinized for its benefit to the whole organization, not just one part, and the team holds itself responsible for not just coming up with an idea, but creating a realistic plan for what it would take to make it happen. Although consensus building is valued, the team will base outcomes on majority rule when necessary.

The team is made up of five people, one from each of the following groups:

1. Public Works
2. Fire
3. Police
4. Non-union, non-management employees
5. Management (appointed by City Manager)

The team is given parameters to work within and has the authority to create recommendations that are then carried to City Council. Although the City Manager or the Council has the authority to reject these, they have not because over time the team has earned a reputation for building value and also saving the City money.

One of the significant steps along the way involved educating the team about the budget so that decisions could be based on meaningful data. This also raised the level of accountability for all involved to produce improved outcomes.

Interesting, and an important lesson from this case study, is that in the beginning, Wayne modeled the role of facilitator and led the agenda setting process, but over time, as responsibilities were delegated to various members, the team become more involved in the agenda setting. So, the transfer of skills allowed the team to function with shared leadership. A key component of successful teams is the recognition of individual skills and learning from group members, as in this case, where the whole team became skilled at facilitating topics, setting goals and creating a plan for implementation.

Some additional areas of interest: each team member attends training twice a year to learn new skills and knowledge.  They meet once a month, and are all active in gathering feedback through surveys or informal interviews.  One important role of the committee is to keep people informed and presentations are prepared and delivered by a minimum of three members of the committee to various parts of the organization. Another skill that has emerged from the committee involves drafting legislation for Council. This has allowed the City Manager to step back from the direct ownership of the product  and produced a greater degree of acceptance by the organization.

Overall, management has not allowed what has always been to dictate what might be, and has remained committed to the effort, despite challenges and naysayers. When asked about the labor contracts, Wayne indicated that the contracts contain language that effectively supports labor participation in the committee.  He did not seem concerned about abridging management rights or indicate that this represented any great concession on the part of labor or management.  In particular, I was impressed by his final thoughts. He said with respect to the union, they value discussing things as adults, and each side being heard.

I know you are busy, which is why I am going to start you off this year with a quick sampling of some recent stories of interest in the HR world.  If you want to read more, just click and go to the source!

Is Text Messaging Private in the Workplace?

Does a police officer have a reasonable expectation of privacy when he text messages using a department issued pager? The United States Supreme Court has decided to take the case. Read more on this…….WorldofWork Blog

Yammer, you might want to try it.

Yammer? What’s that? Just when you thought you had a grip on social media, a new outlet bursts upon the scene. This one is anticipated by many to be the next big one, and it could be part of your workplace strategies. Instead of the Twitter question, “What’s happening?” Yammer asks the question, “What are you working on?”  Instead of being open to the universe, it is designed for employees in a single organization. Imagine having a dashboard of sorts on your computer screen, a stream of “yaps” that tell you what others in the organization are working on throughout the day.  Think about the possibilities. It has the potential to be a great communication and collaboration tool.  Instant messaging that is transparent to all and keeps people informed about who is working on what.  And it is free. Check it out here

http://www.yammer.com

More on Social Media

Jon Hyman, at the Ohio Employment Law Blog, gets it right when he sums up the top ten law stories of 2009 with social media in first place. He provides a series of law articles that discuss the risks associated with social media and what you might need to include in your personnel policies.

Read more at the The Ohio Employment Law Blog

Employees are on the move.

Right Management surveyed more than 900 workers in North America and asked: Do you plan to pursue new job opportunities as the economy improves in 2010?

A whopping 60% said they intend to leave, and another 21% said, maybe, they are networking to consider other opportunities.

Have employees had enough? What does this portend? Read more here

Salary Budgets, Still Unsettled.

In the words of Ann Bares, a fellow compensation consultant, we are on our way to a new normalcy.

She reports on a recent study by Towers, Perrin that finds that most salary budgets will be unfrozen in the coming year, but that companies are planning to spend with greater care, using more differentiation in distributing the limited salary dollars they will have available. You can read more at her blog compforce

When does lunch constitute work time?

It never hurts to brush up on the FLSA overtime rules, especially today when the filings with Wage Hour are at an all time high. The Overtime Advisor reminds us of the DOL rules governing employees who work through lunch.  Read More Here

Another FLSA story that brings home the point that it is harder to exempt employees than you think!

According to a story on MSNBC, a United States District Court for the Northern District of Georgia says first-level managers for Bell South are not exempt because they are on the lowest rung of the managerial ladder and have only minimal supervision.  Read More Here

If you need an employee to recertify FMLA Leave, be sure to follow the rules.

Finally, another excellent blog post by Jon Hyman that is a more technical summary of do’s and don’ts regarding recertifying FMLA leave.  Read More Here

Next time I will write about a city in Ohio that made bold changes to its health care programs which brought about significant savings by engaging its employees.  And yes, they have unions!

Notes from Presentation by Nancy Hess, N.J. Hess Associates, to 2009 Annual Municipal Health Care Benefits Seminar, sponsored by the The Benecon Group, Inc .  11/13/2009

                                                                                                                                                                                                                                                          Carthage existed from about 9^th Century BC to the 2^nd Century BC. Although highly advanced, (one wonders if anything new has really been invented since that time) it was a stratified society, with relatively few in the ruling class and a large lower class. Perhaps their greatest downfall was that they largely relied upon foreign mercenaries. One of their most famous leaders was Hannibal who fought the Romans and although he beat them in the Punic Wars, he could never successfully lay siege and the Romans eventually sailed to Carthage so that Hannibal had to make a hasty retreat to defend Carthage.

Change is upon us and we may feel at times as if we are in the midst of our own Punic Wars.

Whatever our perspective, we can agree that much is at stake: people care about health benefits and the real challenge is to provide benefits that meet the needs of employees and promote wellness. Research findings conclude that health benefits are very important in attracting and retaining employees, so, the last thing we should be thinking about is cutting back benefits, but the current environment leaves us no choice but to re-think our benefit programs.

In an October 2009 Watson Wyatt Study titled, The Effect of the Economic crisis on HR programs,  72% of the respondents stated that they expect to make permanent increases to the percentage of health care costs paid to employees.  We know change is coming, but how do we as leaders shape the outcomes? 

This morning I will talk about how to approach change, and in particular, how change can offer opportunities to lead the organization in positive directions.

I recently returned from an overseas trip where I had an opportunity to share dinner conversation with people from many different countries.  I learned a little bit about how others perceive our struggles in this country.  So one night I asked them to talk about their health care from their various perspectives, and everyone became quite animated and wanted to share their experiences. I would say we were “engaged”.  Then, in the flow of conversation, the topic of health care reform came up. Suddenly, you could feel the tension of a charged wire.  Some wanted change, others did not want change and the air was filled with misunderstandings with what was good or bad about the health care policies of a particular country. I got the point: health care, within a political context, is not good dinner conversation. You can talk about personal experience, the “I” conversation, but not the political views, which is the “c” conversation.  The “C” stands for CHANGE. 

At the heart of the matter, “I” conversations bring about engagement (i.e., what does this mean to you?) “C” conversations set off a whole chain of unpleasant reactions (i.e., what should be different?)  As I recently learned in Bari, Italy, “I” and “C” conversations take place in cafes, at the market, and here, on the steps of the church.

Leadership is about changing the way people think and act, and so naturally, it involves “C” conversations, but it can’t be accomplished without “I” conversations. 

As a consultant, I often hear managers tell me they do not have 6 months or 1 year to work on a program that will significantly impact how employees perceive their work and rewards.  When I suggest that is not possible, and either turn down the work, or they find another consultant who promises them to do it in a short time, I often learn later that the program was never implemented because, the managers grumble, it was a hard sell.

I had dinner with a very successful consultant recently, and when she found out that I help organizations with pay and performance, she shook her head, and said “never! When you go in and have to tell people how much their jobs are worth, they will never ask you back!”  Another consultant once said, when I told her what I did, “ugh, I could never do that, you get in there and roll around in the muck with them.”

Change is a difficult process. It simply cannot be railroaded through. We are at a major crossroads today with pay and benefits. What are we going to do about it?  How can we think and act in a way that ensures a future we want and moves toward a vision we seek?

We are going to talk about two kinds of strategies for change: Business Case (Directive approach) and Engagement (Collaborative approach). You will need both.

First, let’s frame the question we want to explore: 

We are going to make changes to our health care program, but we are not sure which direction to go.  So we ask,

With respect to health care, what do employees care most about?

When we dissect this question, we first ask what assumptions undergird this statement. First, the question is framed around employees, and not some other stakeholder, like citizens, or elected officials.  Health care exists because of employees. If we focus on any other stakeholder, we will have wasted our time.  Our assumption, then, is that health care exists because it is a moral and ethical obligation and because it helps the organization attract and retain competent staff.

Secondly, when we dissect this question, we recognize an “I” conversation.  And another way to think of the “I” conversation, is that it is always about values. Healthcare conversations are always personal. They are about something people care deeply about. 

So, we begin our look at changing health care programs by acknowledging the fundamental purpose of why they exist, and that we are talking about changing something that is deeply personal.

RECENT FINDINGS

*        A Met Life 2009 Open Enrollment Poll found that 1 in 4 employees do not pay attention to benefit changes because it is too overwhelming and too technical.

*        Another finding is that 8 in 10 employees say health benefits are important when making an employment decision.

*        Perceived dissatisfaction with health benefits leads to lower levels of performance.

*        Health care benefits influence loyalty during times of downturn.

PSYCHOLOGICAL UNDERPINNINGS

We know….

Cognitive Dissonance is that uncomfortable feeling we get when we try to hold two contradictory ideas simultaneously.  For instance, if we say we are making changes to improve benefits, while simultaneously increasing employee costs, there is going to be an uncomfortable gap between those two ideas. If employees maintain that they love their job, while at the same time they are increasingly concerned out their health care benefits, they experience an uncomfortable feeling arising from the inconsistency. They may resolve this by changing their perception about their job.

Herzberg’s motivation-hygiene theory, or Two Factor Theory, was developed by Frederick Herzberg, a psychologist who found that job satisfaction and job dissatisfaction acted independently of each other. Two Factor Theory states that there are certain factors in the workplace that cause job satisfaction, while a separate set of factors cause dissatisfaction.

The presence of one set of job characteristics or incentives lead to worker satisfaction at work, while another and separate set of job characteristics lead to dissatisfaction at work.

Hence, we might conclude that perceived dissatisfaction with benefits will result in low morale, low performance, even though exceptional levels of benefits are not necessarily motivating. In fact, the factors that lead to satisfaction have more to do with factors like achievement, recognition and meaningful work.

The theory behind Maslow’s Hierarchy is also relevant to our discussion because employees who do not have basic safety and psychological needs met (in other words feel threatened by loss of benefits) will not be able to engage at the higher levels functioning that require confidence and involve achievement, problem solving, and more importantly acceptance of new facts and information.

 SO, BACK TO OUR QUESTION…

With respect to health care benefits – what do employees care most about?

They care about being satisfied and feeling comfortable with respect to their basic needs being met.  But we also know that when people talk about something they care about, they are charged with energy.

So here is another relevant finding from research:

People do not always make decisions based on rational thinking, particularly when it is about value-related concerns.

For this reason, as leaders, we must appeal to both the head and the heart if we are going to get people to accept change.

STRATEGIES

With all of this in mind, we can now look at strategies that will help us achieve change in the way our employees think and feel about their health benefits.

Failed approaches we may have tried:

Gnashing of Teeth (frustration)  [PICTURE]

Conquer or Die (anger and survival of the fittest)[PICTURE] 

Woe is Me (Self Pity) [PICTURE]

OOOOMMM…Something will emerge (Denial) [PICTURE]

King Arthur’s Court ..Seek Ye the Holy Grail… (Perfectionism!) [PICTURE]

All of these strategies are part of our arsenal and may work part of the time, but we need a more complete approach to the larger process of change if we want to demonstrate leadership that affects positive change on the organization.

We will need to keep two kinds of approaches in mind to get where we want to go:

First, we need to build a business case for change. Second, we need to engage people. We want to engage people because we want to engage the heart.  If we are going to create the energy and will for change, we need momentum.

MORE FINDINGS

Employee Benefit news, in a November lead article talks about research on the effects the recession has had on employee engagement. The finding from a joint survey by WorldatWork and Watson Wyatt was that employee engagement levels within the past year fell nearly 10% overall and 23% for top performers among 1,300 full-time workers at 235 large U.S.

 The researchers suggest a need for rethinking benefit and compensation strategies, and where voluntary benefits come into play, the challenge is to broaden choice without making it seem like another takeaway.

Additionally, 41% believe that pay and benefit changes made have had a negative effect on work quality and customer service, while 36% of top performers say their company’s situation has worsened and the number who would recommend others take jobs at their company has declined by nearly 20%.

Still More findings….

Employees will rate the importance of their health benefits higher if they are aware of options and if they have choices.

They also rate the importance of health benefits higher if …

..their income is lower,

..if they are unionized,

..if change is imminent and

..if they are in the public sector.

These findings were cited in the 2009 summer issue of Public Personnel Management. This article explores the relationship between health benefits and employee satisfaction and cites research by Professor Marcia Micelli of Ohio State University who has been working on research that looks at employee satisfaction with the quantity of benefits versus employee satisfaction with the quality of benefits. 

One of the major findings of this article is that public sector organization have more favorable opinions than the private sector organizations in regards to health benefits being very important for improving the morale and satisfaction of employees , improving employee health, increasing productivity and performance, and attracting and retaining employees.

If this is true, does this not make a case for taking the time to engage employees in the question of what is most important to them? Organizations are what we shape them to be and our conversations determine what gets noticed and which challenges and opportunities people will pay attention to.

 Change is imminent! 

Venice is a city vulnerable to sudden changes due to rain. Rain signals that change is imminent and people don hip boots and set down walking platforms, so that life may go on.  We read the signals of change in our environment and must develop the strategies that we can employ, so that for our organizations as well, life may go on.

SO, BACK TO OUR STRATEGIES

First, we consider what we mean by “building a business case”.  This approach to change can be described as…

*        Programatic

*        Linear

*        Actionable, a la John Kotter style (author of Leading Change)

When we are building a business case, we are essentially building context and developing shared understanding of the reasons for undergoing change.

 Some  examples of activities that help to build a business case:

1)           SWOT analysis  (strengths, weaknesses, opportunities and threats)

2)           Urgency and Certainty Grid (see below)

3)           Why –What- How Conversations;

4)           Guiding coalitions with vision;

5)           Analysis of programs, protocols, policies.

Second, we consider what we mean by “engagement”. This approach can be described as…

 *        Emergent

*        Organic

*        “Ready to ride the lead horse”

Some examples of activities that help to build engagement:

1)           Ask the question, “What do people care most about?”

2)           Involve employee groups in a process of learning.

3)           Involve the gatekeepers, i.e., whole family.

4)           Bring other stakeholders to the table, i.e., key organization leaders, consultants, labor representatives.

5)           Appeal to self esteem; appeal to spirit.

6)           Look at thoughts, aspirations, needs, desire, fears – all within the context of realities.

7)           Create a psychological safe atmosphere to discuss these things.

8)           Realize that resistance is a necessary part of the process of change.

 Lawrence Miller, Author of American Spirit, Visions of New Corporate Culture said that the mass of people within our society, or our organizations, are not primarily motivated by what is rational. It is the emotion, the appeal to self esteem, the spirit that is the prime mover.

 CLOSING

 We know, based on research, that we should not be reducing the quantity or quality of health benefits, but the fact is, we have to change the model in which we are operate.

A 2009 Towers Perrin Health Care Cost survey found that high performing companies will pay 12% less for annual health care premiums by making use of account-based plans and consumer based approaches. High performing companies are also more likely to share costs with employees. But the key finding is that high performing companies report a greater emphasis on employee engagement.

High performing companies are defined as those who:

*        manage employer and employee costs

*        enhance efficient purchasing of health care services

*        enhance employee understanding and engagement

*        enhance employee satisfaction, attraction and retention.

High-performing companies in the survey focus primarily on supporting and improving employee health. They also commit to rigorous and continuous management of their health plans and delivery processes.

We also know from a 2009 Best Employers in Canada study that “High engagement goes hand-in-hand with better health and well-being”.

One public sector organization that has focused on employee engagement to improve health care programs is the City of Montgomery Ohio. They have received an award from the Center of State and Local Government Excellence for their effective use of employee groups to raise awareness in the organization about wellness and help employees to become better educated about health care options. 

The goal of the committee was to

*        represent employee health care concerns,

*        negotiate with insurance providers,

*        maintain comprehensive coverage, and,

*        communicate with work units about key health care issues.

The results have been

*        A decline in sick leave usage

*        Containment of health care premiums

*        Drop in average annual medical claims

BACK TO CARTHAGE

If you visit Carthage today, you will see ruins, but a short distance away you find Sidi Bou Said, a beautiful fishing village that reflects the thriving Tunis culture and reminds us that change, after the wars, can bring about positive outcomes.

Edgar Schein, the eminent organization psychologist, said that when organizations attempt change, they must first create mutual understanding, so joint opportunities can be identified and realized.  This is the “I” conversation.

Kurt Lewin, another early researcher and practitioner, said that if you want to understand a system, you must seek to change it.  This is the “C” conversation.

These two approaches are a duality; one focuses on a rational path of building a business case, or the “C” conversation, and the second focuses on engagement, or the “I” conversation.  This duality expresses hints of the old adage that pessimists are usually right, but behind every great change, you will find an optimist.  The pessimists get the facts right, but the optimist is willing to consider the possibilities for the future.

WAL-MART – Settles Wage Hour Claims

Wal-Mart continues to deny any wrong doing with respect to a class action suit brought by employees in the State of Washington alleging they were denied meal times and rest breaks and were forced to work off the clock.  Despite their insistence of innocence, management decided to pay out $35 million rather than go to court. [Huffington Post provides a nice summary.]   This does not help their image, but anyone familiar with wage hour regulations might understand how they got themselves into a pickle.

Workplace policies that state work should not be performed during the meal break, or during off work hours often do not reflect what is actually going on as vigilant employers will report. I recall my early days in the workplace when a husband of an office assistant called the wage hour and complained that his wife was working overtime without getting paid. The wage hour investigators arrived and audited the company from top to bottom. Employees did not know, in most cases, why certain questions were being asked, but since time records did not accurately reflect what the employees were telling the investigators, the end result was a settlement that was largely due to poor enforcement of policy.

Here is a word of clarification and a word of caution regarding this case: first, the State of Washington requires employees be provided a meal and rest break. This is not the case in many states (including Pennsylvania) and so this aspect of the case relates to Washington labor law.  At the federal level, the Fair Labor Standards Act requires only that a break be counted as time worked if it is interrupted. A safe policy is a minimum of 30 uninterrupted minutes for meals.  In addition, rest periods of 20 minutes or less must generally be counted as time worked.

So, we will never know the particulars of the Wal-Mart case since it was settled out of court. But it is very likely that the problem for the company was in part the record of work time. Therefore, be advised that you should have a policy that states employees must leave their work area for meal periods and may not perform work before or after work unless authorized for overtime.  However, if you have a policy but look the other way when it continues to occur, you are permitting the work and are possibly treading down the same path as Wal-Mart.

If you employ 2 – 19 employees in Pennsylvania, you want to be aware of the newly enacted mini COBRA law which entitles employees and dependents of employees to receive continuation of health care benefits in case of a qualifying event. The premium will be paid by the employee or dependent, and coverage may be extended for nine months.

 A qualifying event includes:

 •        death of the covered employee,

•        termination of employment (either voluntary or involuntary, but not for the employee’s gross misconduct),

•        reduction in hours,

•        divorce or legal separation,

•        eligibility for Medicare,

•        dependent child ceasing to be dependent,

•        bankruptcy of the employer.   

 In addition, the Federal Stimulus package that provides for premium reductions due to lay-offs will apply.

 The following link contains a model notice and additional information.

 Pennsylvania Mini-COBRA Law

WorldAtWork released its first glimpse of the findings for 2009/2010 salary budgets. [Here] My clients hear me talk about this annual survey because it is a favorite of professionals in the field, and with over 2600 participants, it is an excellent marker when considering salary budgets for the coming year.

 So what is the news?  Not so good.

Here are some of the highlights: 

Salary Budget Increases, by Type of Increase

Actual 2009:

General Increase/COLA: 1.2%
Merit Increase: 1.9%
Other Increase: 0.9%
Total Increase: 2.2%

Projected 2010:

General Increase/COLA: 1.6%
Merit Increase: 2.7%
Other Increase: 0.9%
Total Increase: 2.8%

The survey will be released in early August and participants will be surveyed for an update report in the fall. Stay tuned.