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.

In my recent newsletter I reported that the Civil Rights Division of the Department of Justice issued a report to a House Subcommittee on December 3, 2009 outlining a number of efforts to renew enforcement efforts in the area of Title VII and Disability Rights. Here are two excerpts from that report that have particular relevance to public sector.  I will continue to follow the reports and activities from this department and keep you informed.

Title VII

Restoring vigorous enforcement of Title VII, including pattern and practice cases, is one of our highest priorities. Since January 20th, we have filed three Title VII pattern or practice suits, obtained settlements in five pattern or practice cases that provided significant prospective and remedial relief, and opened ten full pattern or practice investigations of State and local governmental employers with respect to employment opportunities for African Americans, Latinos and women. Also, in July, we obtained a highly significant victory in U.S. v. City of New York, NY, when the district court granted summary judgment for the United States and plaintiffs-intervenors on the issue of liability. In the City of New York case, we challenged the city’s use of two written examinations for entry-level firefighters as having unlawful disparate impact on African Americans and Latinos. In the relief phase, we are seeking, among other things, priority hiring and monetary relief for nearly 300 African-American and Hispanic victims of the challenged examinations.

 Disability Rights

 The Division’s Disability Rights Section has been conducting a wide range of enforcement activities, including its Project Civic Access to increase compliance by State and local governments with Title II of the Americans with Disabilities Act of 1990 (ADA). The Project sends investigators, architects and attorneys to conduct on-site reviews of State and local government facilities. These reviews have resulted in agreements reached with the State and local government entities to address compliance issues by rectifying access issues at a wide range of facilities, including administrative buildings, courthouses, police and fire stations and jails, transportation facilities, parks and recreation facilities, libraries, museums, polling places, and emergency and domestic violence shelters.

 From, a sub-committee report by the Department of Justice “THE CIVIL RIGHTS DIVISION OF THE DEPARTMENT OF JUSTICE”PRESENTED DECEMBER 3, 2009  

 Timken Company Sued by EEOC for Disability and Sex Discrimination

On another but related front, the EEOC has recently decided to file a lawsuit against Timken, a global manufacturer, for discrimination against a woman with a disabled child. This is a reminder to all that complaints may be filed because of a person’s association with a disabled person.

In the press release issued by the EEOC, Tina Burnside, supervisory trial attorney in the EEOC’s Charlotte District Office stated:

Under the ADA and Title VII, employers cannot make employment decisions based on stereo­typical assumptions that a female employee with a disabled child would have to miss  work or could not perform the job because the employee provides care for a  disabled person.

The take home lesson here is to the same as always, develop job descriptions and clear hiring standards, be consistent and objective in your selection practices. Steer clear of questions that invite disclosure of information that is irrelevant to performance of the job. If a candidate offers information without prompting, do not tarry, but re-focus the discussion on job-related matters.

POLICY ON RELATIONSHIPS IN THE WORKPLACE

Organizations vary in  the way they set policy around dating relationships dependent upon the size of the organization and the design of the work. However, for most employers, especially smaller size organizations, this is an important issue that is frequently overlooked in personnel policies. One potential problem is the relationship gone bad scenario which results in lingering resentments which lead to more insidious workplace problems, not least of which is the potential for harassment complaints. Another serious issue is the fall-out from two people who marry and continue working together which is not only bad for department morale but sets the stage for a whole host of conflicts within reporting structures.

Recently, I helped a client arrive at a policy that was minimal in nature, but sufficient to address the most serious aspects of this issue. Here is what we came up with:

Romantic relationships between employees in the same work unit, while not prohibited, may not interfere with the department business, and employees will be disciplined for any disruption to the workplace caused as a result of the relationship. Furthermore, if two employees enter into marriage, subsequent to being employed in the same work unit, one of the persons affected must give up his or her position no later than 6 months from the date of their announced engagement.  Within 30 days after the employees announce their intentions to marry, both employees must inform (in writing) the manager to whom the unit in which he or she is employed reports that they intend to marry and must state which of the affected persons will relinquish his or her position. Should the written notification fail to specify which of the affected persons will give up his or her position, it will be assumed that the party with the least seniority (length of continuous service from the last date of hire) will relinquish his or her position.  The person giving up his or her position may be re-employed in another department, subject to the needs of organization. 

 Any thoughts on this from your neck of the woods?

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

HDSA Golf Outing

Last Saturday, November 21^st, the Genetic Information Non-Discrimination Act (GINA) became effective. Careful and thoughtful attention to how you consider this new law in your workplace can make a huge difference in lives of your employees and can also make you less vulnerable to EEOC complaints and lawsuits. Under the law, employers may not ask for the results of genetic tests or discriminate in hiring, firing and promotion based on the results of genetic tests. It also prohibits discrimination by individual and group health insurance providers based on genetic test results. If the intent of the law is realized, more individuals will be tested and treated for genetic diseases, and this will likely spur complaints of discrimination in the workplace. So it is important to be ready and willing to respond to the inevitable situation that will arise at your workplace.

Wellness programs are a strong player in your response strategy. Encourage employees to be well and be prepared to support them with employee assistance programs that provide counseling in the event they learn they have a genetic disease. Rely on professionals connected to you through your ancillary health programs. If your provider does not offer support in this area, let them know you are going to shop around.

Be aware that the difference between ADA and GINA is that in the latter, a person may learn they have the gene for a genetic disease, but will not know how long it will be before the symptoms begin to manifest.  In addition, it might be useful as an employer to know that ethical protocols exist within the medical field that require counseling about available channels of support if in fact the genetic test comes back positive. If you learn that an employee has received bad news, you can encourage them to seek support through the channels offered them during the genetic testing process.

The hard part, of course, arises when you begin to notice that job performance has been compromised. My advice is to keep channels of communication open with the employee so you can learn as much as possible about what to expect. While you do not want to know the details of medical or genetic tests, you want them to keep you informed about any limitations that may arise, such as driving, or even processing information in the same way that they once did. You can encourage an advocate to meet with you (for instance, a social worker from a group associated with the particular disease) for the purpose of charting out a course for the employee. For instance, if you can map out ahead of time, the prospects of keeping the employee on in a less demanding job, at a lower pay rate, or what the employee can expect at the point at which the job can no longer be performed, you have offered the employee a degree of control and ability to predict the future. Keep in mind that many employees will eventually be transitioned onto Social Security Disability, but it takes time and you are doing a huge service by allowing them time to transition. Long term disability insurance may also come into play.

If the worst happens, and the employee files a complaint, this may be due to insensitivity on the part of the employer, or it may be that the employee has not yet come to grips with their medical condition. Keep in mind that part of the process, as in any loss, is denial, and for some it is simply harder than for others. So it may not be the fault of the employer, and if you have exercised a reasonable effort to not discriminate, try to remember the investigation process will be much less terrifying than what the employee is going through.

I know something about this as I come from a family with the genetically inherited Huntington’s Disease and recently went through the dreaded testing process. Although I came out negative, this was a life defining experience. This is a rare and terrifying disease (but they all are).  Charles Sabine, the former NBC Correspondent, who while covering war, was abducted by terrorists, tortured, and had a gun held to his head for hours, said that his terrorist experience could not hold a candle to the terror of learning his genetic fate. His story was told this past Monday on NPR [here].

Last, but not least, there are of course….new posters!  If you have not yet secured yours, you might want to check out this site.

EEOC Poster Request Form

If I were in the classroom, this case would be a real teaching moment.  In the build up to this perfect storm, we find a city government which conducts a valid selection test for promotion in the firefighter ranks, but when a group of minority candidates is not fairly represented among those who pass the test, a public outcry asserts the test had a discriminatory impact on the minority group. So, the city exercises due diligence and applies the criteria outlined in the EEOC Uniform Guidelines for Testing and finds that indeed, the test falls short, and decides to re-calibrate the test, as required by the guidelines, to avoid a lawsuit. But in trying to do the “right” thing, the City is then sued by the employees whose promotions were thrown out.

As the lawsuit proceeds, it reaches the Second Circuit where a panel of appellate judges finds for the City.  One of those judges is nominated for Supreme Court just as that court is hearing this case. Incidentally, she is Hispanic, and Hispanics are among the group suing the City.  Then yesterday, in a dramatic moment, the appellate court decision is not only overturned, but the established EEOC interpretive guidelines for Title VII are all but defied.

What the Supreme Court essentially did was provide wiggle room for the employer who follows the rules in constructing a fair test, but later discovers that the test adversely impacts a particular group. The Court said that an emphasis on discriminatory impact creates, in a roundabout way, discriminatory treatment, and Title VII was not intended to replace on form of discrimination with another.

Now what?

First, dear readers, the terms:

“Valid selection test” means that the test, on its face, does not appear to be discriminatory. No intentional discrimination is likely because the test conforms to the requirements of the testing guidelines.

“Disparate impact” means that unintentional discrimination is possible by virtue of the fact that a whole group of candidates from a protected class is disproportionately underrepresented among those who pass. Disparate impact differs from disparate treatment which is found when an employer designs the test, for instance, to screen out a certain class of candidates intentionally. Tests must be based strictly on job-related criteria. However, if a test that is not discriminatory on its face, is later found to impact a class or group disparately, the correction requires application of metrics that look at overall representation in a group, in ratio to the representation in the promotion group.

“EEOC Uniform Guidelines for Testing” are the interpretive guidelines that have been in force since the 1970s and guide employer practices with respect to testing, and contain both the metrics and the protocol for demonstrating good faith in creating and administering tests.

Take home lessons?

First, I think the dissenting members of the Court had some interesting things to say. Ginsberg, in particular, rejected the court’s reasoning that an employer’s attempt to correct adverse impact necessarily leads to disparate treatment

Second, I think the legislature will be swift in addressing the court’s concerns and this may lead to more significant repercussions in the way employers test applicants.

The Court sums up their decision this way:

Our holding today clarifies how Title VII applies to resolve competing expectations under the disparate-treatment and disparate-impact provisions. If, after it certifies the test results, the City faces a disparate-impact suit, then in light of our holding today it should be clear that the City would avoid disparate-impact liability based on the strong basis in evidence that, had it not certified the results, it would have been subject to disparate-treatment liability.

[ Thanks Ohio Employment Blog for this quote.]

If nothing else, this case reveals the tangled verbiage of the EEOC guidelines that have long troubled employers. (Take a look at the guidelines via the link provided above if you have any doubt as to WHY.)

The problem is, the court did little to untangle the mess.

***

Want a little more information on EEOC guidelines?  Here is a good link: EEOC Guidelines

“Please list any and all, current personal or business web sites, web pages or memberships on any Internet-based chat rooms, social clubs or forums, to include, but not limited to: Facebook, Google, Yahoo, YouTube.com, MySpace, etc…”

Are you prepared to answer this question on a job application? If you are applying for work at the City of Bozeman, Montana, you will have to be, and some unhappy folks decided to take this practice public with the local news station. Here is a related article on ABCnews.com.

Since the airing of the story last week on WBZK TV, the city commissioners have been bombarded with angry calls and letters from people who find the practice invasive and believe it interferes with the right to privacy. City officials have defended the practice stating that working in public employment requires greater scrutiny and they only request, not require applicants to provide password information.

Question: If we create a public space which can be viewed by anyone, do we then have the right to say that it is an invasion of privacy for an employer to ask what public spaces we inhabit on the Web?

If we think back to Personnel 101 and interviewing do’s and don’ts, we will remember that questions about a person’s membership in clubs or associations may later be construed as a means to select out candidates deemed unsuitable, based on non-job related factors. Human resource professionals advocate selection criteria that focus on the requirements of the job.

However, the employer has a legitimate claim to personal information too. For example, does an applicant have a bad driving record (where the job involves use of a car), or convey openly hostile views toward a race or group of people? At what point does an employer become liable for NOT exercising due diligence when screening a job candidate?

So, yes, personal information is often very relevant. But here is the caveat and where the City of Bozeman is likely to run into trouble. It may be o.k. to investigate applicants, including the public spaces they create on the web, but the time to do it is after the an offer has been made, not before.

In addition, it appears that the City asked for passwords to enter sites that were not public, and this could be problematic, although careful construction of a policy and practice for certain professions, such as police officers, may make this legal (I am not an attorney and advise you to ask one if you want to do this.)

For an excellent legal perspective, head on over to the Delaware Employment Blog and learn more about how employers use social networking information in the candidate screening process.