Are You Wage-Fixing? Discussing Compensation With HR Friends Could Put You in Hot Water

Share on LinkedIn Share on Facebook Share on Twitter Share on Google Plus Share this Page

Talking To Industry Friends: Are You Saying Too Much?

We all do it with our counterparts in the industry…we share stories about that uncomfortable discussion that we had to have with an employee, ask our friends how they have handled sensitive situations, and grumble about our never-ending to-do list. However, are you also talking  to people at other organizations about employee salaries? Are hiring or compensation conversations coming up during networking events?  Remember that these discussions could land you in hot water!
Read this article...

Should You Still Be Asking Candidates for Their Salary History?

Share on LinkedIn Share on Facebook Share on Twitter Share on Google Plus Share this Page

should-you-still-be-asking-candidates-for-their-salary-history

This scenario may sound familiar—you are anxiously searching for a new position and filling out an online job application for your dream role, when a required question appears: ‘What is your current salary?’. Or worse, you are at an in-person interview that seems to be going great when an interviewer asks you what you currently earn.
Read this article...

Is Your Compensation Data Reliable?

Share on LinkedIn Share on Facebook Share on Twitter Share on Google Plus Share this Page

Is your Compensation Data Reliable?

Compensation data is an essential element in organizations' efforts to competitively recruit and retain top talent. This data is used to ensure market competitiveness in employment offers, and provides a foundation for complete compensation strategy reviews. Be careful about the data you use for compensation decisions. It should come from credible compensation surveys.
Read this article...

ERC Releases Wage and Salary Data for Northeast Ohio

Share on LinkedIn Share on Facebook Share on Twitter Share on Google Plus Share this Page

ERC, Northeast Ohio’s leading publisher of local workplace information and salary data, has released the results of its 2012 annual wage and salary surveys. These surveys serve as a critical compensation benchmarking resource for employers across Northeast Ohio that are looking to stay competitive in the region by attracting and retaining top talent.

The 2012 ERC Salary Survey reports annual salaries for 8,508 individual employees in 241 professional and management positions from 196 Northeast Ohio organizations. The 2012 ERC Wage Survey reports hourly pay information for 8,127 individual employees in 80 hourly production, maintenance and service positions from 149 Northeast Ohio employers.

“To effectively compete for talent, it’s important for employers to benchmark their pay rates and practices,” states ERC’s director of research and membership. “These surveys provide Northeast Ohio employers with comprehensive local data that helps inform their decisions regarding wages and salaries.”

The 2012 results suggest fairly stable pay rates overall, and continue to reflect the same stagnant growth pattern that has become the norm for the region in recent years.

View ERC's Wage & Salary Adjustment Survey Results

The survey reports data from Northeast Ohio organizations regarding their actual and projected wage and salary adjustments.

View the Results

How to Pay a Fair Salary: 5 Principles

Share on LinkedIn Share on Facebook Share on Twitter Share on Google Plus Share this Page

It probably seems like some of your employees are never satisfied with their salaries and that fair pay is always an issue needing to be addressed with either job applicants or current employees. If your organization and its managers haven’t heard the following questions and complaints from your current or prospective workforce, consider yourself among the lucky few...

  • “I do the work of 2 people, why aren’t I paid more?”
  • “If I’m doing a great job, why aren’t I getting a bigger pay adjustment than 2%?”
  • "Can you pay me 'x' for the job given my credentials?"
  • “The company had a record year last year and we didn’t receive a bonus or raise.”
  • “I haven’t gotten a pay raise in 3 years.”
  • “I’m working harder than ever with fewer resources and my pay doesn’t reflect my contributions.”
  • “Why don’t we get cost-of-living increases?”
  • “Why is she paid more than me when she does less work and performs worse?”
  • “The company down the street pays more for this job.”
  • “I found data on the internet which says that I should be paid 'x' for my position.”

These salary questions are tough and complicated for employers. They don’t have easy answers. Plus, with the wide availability of pay information on the internet, employees can quickly become skeptical of your pay practices if they don’t match or seem fair to what they see, hear and read online.

What’s an employer to do? Try to keep salaries as fair as possible and ward off perceptions of inequity as best they can, keeping in mind the needs of the business and market. Below are 5 widely accepted comp principles that employers have successfully used to keep pay fair and complaints to a minimum.

Principle 1: Play to the market.

The best way to stay on track with compensation is to know what your immediate, local competitors are paying and how they pay. Conduct thorough market analyses. Look at details like county and industry comparisons. Consider years of experience and education factors. Explore how other employers pay – do they offer variable pay, merit increases, pay premiums or bonuses in addition to base pay? These factors can lead to substantial differences in total pay.

Principle 2: Make internal comparisons.

What are you paying a premium for at your organization? Are certain skills, behaviors or job attributes more valuable than others to your business? Should they be paid a premium as a result? Who is most important to your company? Comparing the value of positions in the organization can help make sure that employees are paid fairly in relationship to their contributions to the business. Just make sure employees know what skills and attributes are valued.

Principle 3: Directly tie pay to performance.

One of the biggest criticisms employees have about their pay is when underperformers are paid as much as them and when working hard and performing well doesn’t necessarily bring a higher pay raise. It can be frustrating to your highest performers when better performance doesn’t equal better pay. That's why it's critical to accurately measure performance regularly and reward it with pay increases or variable pay.

Principle 4: Share the wealth.

If your organization is having record financial years, employees will eventually notice and become disenchanted if they aren't able to share in the wealth and success they helped create. The majority of employers share their business' financial success with their employees in some way, such as bonuses, profit-sharing and merit increases. Their pay should be tied to your organizational results. If pay can't be adjusted, consider other rewards to recognize employees.

Principle 5: Provide a living wage.

This means compensating employees in a way that allows them to meet their basic needs. When there is a consistent problem or complaint of not being able live on a certain amount of compensation, consider exploring your pay practices and how they meet your talent’s needs. If a segment of your workforce can't survive on what they are being paid, then it may be time to re-evaluate your pay practices, even if the market differs. Take care of your own.

Fair and competitive salaries are absolutely essential for attracting, motivating and retaining employees. When unfair pay is a main issue in a segment of your organization, use these five principles and adjust your pay practices accordingly.

View ERC's Wage & Salary Adjustment Survey Results

The survey reports data from Northeast Ohio organizations regarding their actual and projected wage and salary adjustments.

View the Results

7 Things You Might Not Know About Salary Survey Data

Share on LinkedIn Share on Facebook Share on Twitter Share on Google Plus Share this Page

7 Things You Might Not Know About Salary Survey Data

Being a well-versed salary survey user is an important part of managing employee compensation at your organization. After all, salary surveys are the leading source for setting pay rates.

What data should you use, and what data shouldn't you use? Why is some data lower and some data higher? Should you do a custom survey for better data? If you can't find a given job in a survey, is it okay to use internet or recruiting firm data? How many sources should you use? Here are the answers to these questions and more that we routinely get asked by employers—7 things you may not know about salary survey data.

1. Government data is conservative.

The Bureau of Labor Statistics is a great, reliable resource for salary benchmarking, but compensation analysts find it to be conservative when compared to other compensation data sources. This is because of the time frame in which it is captured, the types of organizations surveyed, and variables covered.

2. Custom salary surveys are less reliable.

Conducting a custom survey for a niche job is commonly believed to be more targeted and accurate than a larger salary survey, however these surveys tend to have lower sample sizes than expected and are not replicated regularly. Custom surveys can be good options for niche jobs and industries, but be aware of their limitations. They certainly aren't always the best option.

3. Internet comp data is generally invalid.

Not only are internet resources for comp data indefensible, but their sources can’t be verified. Research has found that these sources are highly inaccurate and comp experts raise serious questions about the data's validity. Be wary of any data found on the internet that does not publish participant names, demographics, effective dates of data, and sample sizes.

4. Use recruiting firm and job board data with caution.

Data published by recruiting firms and individual employee data (such as from job boards) tend to not be as reliable sources of information as others since they often report inflated pay rates. This information is not a good indicator of how much a job is actually paid.

5. Choosing the right survey makes a difference.

All compensation surveys cater to a certain audience. Make sure that audience fits your's. If a survey contains very large employers on a national scope that you don't compete with, it's probably not a good survey to choose for benchmarking. The wrong survey source can lead to higher or lower data, so always look at the participant list and demographics.

6. Salary data sources are shrinking.

The number of third-parties offering salary data is shrinking which means that employers have fewer sources to select from for their compensation data, though the strong ones still remain. As a result, it’s critically important that organizations support and participate in compensation surveys they value so that valid and reliable information continues to be available.

7. The magic number is “3.”

Ever wonder how many sources you need to make a good pay decision? Some sources say 2, some say 5. Comp experts agree that reliable pay decisions should result from 3 separate sources of salary survey information. Choose three surveys that make the most sense for your analyses.

To make good pay decisions, you need quality data and multiple sources of it. Reliable salary data is tough to come by these days, so be careful about what you use.