SEC Proposes CEO Pay Ratio Rule

The Securities and Exchange Commission (SEC) proposed a rule in 2013, required under the Dodd-Frank Act, which would require companies to disclose a pay ratio of their chief executive officer's compensation to the median total compensation of all of its employees (for the last fiscal year).

The SEC would not prescribe a specific method for organizations to use when calculating a pay ratio, and companies would have the flexibility to determine the median annual total compensation among their employees and make reasonable estimates when calculating elements of and employees' total compensation.  In addition, in the proposed rule, "employee" is defined as any employee who is full-time, part-time, temporary, seasonal, and non-U.S; employed by the company or any of its subsidiaries; and employed as of the last day of the company's prior fiscal year.

Companies would be required to disclose the method they used to identify the median and total compensation as well as any amounts that are estimated.

Source: Securities and Exchange Commission (2013). SEC Proposes Rules for Pay Ratio Disclosure

Integrating Incentive Pay into Your Performance Management Process

When structuring an effective Performance Management process at any organization, including some type of incentive to help drive performance is a key step. Particularly in recent years, large financial incentives are not always feasible, nor are they always found to be the most impactful driver for incentivizing employees. Nonetheless, a consistently strong majority of organizations both across the region and nationally, tie pay to performance either directly or indirectly.

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2013/2014 Salary & Benefits Planning & Budgeting Guide

We’ve compiled a brief compensation and benefits planning and budgeting guide to help your organization make important pay, health care, and benefits decisions this fall and into 2014. The guide summarizes the latest and most important trends we’re seeing related to administering compensation, health care, and benefits, which affect your organization as it plans for 2014.

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4 Important Guidelines for Giving Pay Increases

4 Important Guidelines for Giving Pay Increases

Pay increases are an important part of a compensation system as they aim to reward employees based on their performance achievements, but your organization should make sure you follow these four important guidelines when administering pay increases.

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Northeast Ohio Keeping Up with National Pay Adjustment Trends

The 2013-2014 ERC Wage & Salary Adjustment survey results found an average projected pay adjustment of 2.9%- basically more of the same from 2013. The results from this local survey of Northeast Ohio employers are very much in line with national reports from organizations such as Hay Group and WorldatWork which repeatedly indicate that employers are hovering right around the 3.0% mark, much as they have for that past several years.

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The 15 Attributes of a Great Workplace

The 15 Attributes of a Great Workplace

ERC's NorthCoast 99 program recognizes great workplaces that excel at the attraction, retention, and motivation of top performers. ERC is proud to have recognized great workplaces in Northeast Ohio, and has accumulated a great deal of insight into what makes a workplace truly great through the research we conduct as part of the program.

What makes a great workplace that draws extraordinary employees to love coming to work every day? What makes a great workplace that attracts, retains, and motivates the very best talent?

Here are 15 attributes that we believe are characteristic of great workplaces for top talent, based on our research over the last 15 years.

1. Offer Challenging and Meaningful Work

Great workplaces understand the importance of keeping employees' work interesting, exciting, challenging and meaningful, because consistently, top performers say that challenging and meaningful work is the number one attribute they seek in a job.

2. Hire and Retain Great People

Great workplaces are made up of great people. Within great workplaces, top performers work alongside other top performers who are positive, hardworking, committed and loyal, believe in what the organization does, and participate in making the workplace great.

3. Provide Competitive Compensation

Great workplaces offer competitive and fair compensation, above-average pay increases, and opportunities to earn more pay based on performance, such as bonuses, profit sharing, and other incentives to keep and reward top performing talent as well as attract new talent.

4. Value and Reward Employee Contributions

Great workplaces show they appreciate and value employees and their contributions. They celebrate success often, and praise, recognize, and reward employees in a variety of formal and informal ways. They never miss an opportunity to say 'thanks' for employees' hard work.

5. Invest in Training and Development

Great workplaces invest in training and development for their workforce to grow their talents and capabilities. They make time for learning and support it by paying for employees to participate in various opportunities and offering/delivering a variety of training and career development programs.

6. Guide, Support, and Develop Top Performers

Through performance management practices that help guide, support, and develop exceptional performance, great workplaces provide clarity on how to be a top performer, help other employees become top performers, and assist existing top performers in sustaining top performance. Reaching for excellence each and every day is what makes great workplaces successful.

7. Encourage Work/Life Balance

Great workplaces are flexible to employees' work/life needs and encourage work/life balance by offering flexible schedules, providing generous paid time off, accommodating individual requests and needs, and creating a supportive work environment that is understanding of personal and family obligations.

8. Invest in Employees' Health and Wellness

Great workplaces genuinely care about their employees' well-being. They offer wellness options that help employees develop healthy lifestyle behaviors as well as provide an array of benefits which support their employees' health and personal welfare.

9. Involve and Empower Employees

Great workplaces involve and empower employees by listening to their input, involving them in moving the organization forward, and giving them opportunities to lead initiatives, collaborate with one another, participate in decision-making, and make a meaningful difference at work. At great workplaces, employees believe that their opinions matter and that they can positively impact their organizations.

10. Share Information About the Organization's Performance

Leaders frequently share information about the organization's performance, its financials, the vision and direction of the organization, and other critical information and updates at great workplaces. In addition, leaders regularly interact with and communicate with employees one-on-one, in small groups, and as an entire staff. Additionally, great workplaces help everyone understand the mission and purpose of the organization, and how their work connects to the big picture.

11. Are Led by Exceptional Leaders

Great workplaces are led by exceptional and inspiring leaders. Leaders set the example from the top and lead the organization well. They genuinely care about and value employees. Relationships between leaders and employees are characterized by mutual respect, trust,  honesty, and support.

12. Encourage Innovation and Growth

Great workplaces are successful, growing, and innovative. They hold themselves to high standards, are focused on delivering exceptional customer service and quality, and strive to innovate and continuously improve their organizations. They are always raising the bar in their businesses and in their workplaces.

13. Hire the Best of the Best

Great workplaces hire the best—and only the best. They recognize that a great workplace and culture results from great people. They define the talent they need, strategically recruit it, and put into place selection practices that identify top performers, as well as on-boarding practices that engage top performers and set them up for success from the start.

14. Create and Sustain a Unique Culture

Great workplaces have a unique culture that is their own, often described as fun, congenial, collaborative, positive, passionate, and creative. Their work environments, people, and workplace practices all help create a vibrant, positive, magnetic, and infectious culture.

15. Serve the Community

And last but not least, great workplaces make an impact on and give back to their local community. Not only do they generously donate their company resources to the community, but they also serve their communities by helping others in need and offering their staff's time and talents.

There is no magic formula for achieving a great workplace, and these are just some common attributes of many that great workplaces seem to have. While no workplace is perfect, many organizations strive to become a truly great workplace and come close. The NorthCoast 99 winners are among these organizations, and they, as well as all other organizations that strive everyday to be great workplaces, should be applauded for their efforts to become employers of choice in Northeast Ohio. They are truly making a difference.

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Employers Struggle Most with Tracking FMLA

Organizations could cite a countless number of reasons that they find FMLA administration challenging, but according to a 2013 ERC survey, top among these reasons is “tracking”. According to the 2013 ERC FMLA Practices Survey, “tracking” is the number one challenge for 40% of the participants, up 12% since the survey was last published in 2011. Other somewhat less common challenges include overall compliance (23%), determining overall costs associated with FMLA absences (17%) and determining what constitutes a serious health condition (12%).

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Payroll Cards Facing Legal Scrutiny

In 2013, New York’s Attorney General began investigating companies that pay hourly employees using prepaid payroll cards, with the concern that fees associated with pay card withdrawals may be insufficiently disclosed or excessive, and that the cards may decrease employees’ take-home pay which may, in some cases, result in pay below the minimum wage.

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Local Wellness Programs and the ACA

Based on the results of the 2013-2014 ERC Policies & Benefits survey, Northeast Ohio employers are well positioned to take advantage of the recently released Affordable Care Act (ACA) regulations increasing the maximum rewards employers may offer employees for participation in wellness programs. Local employers have consistently outpaced the national averages in terms of their wellness initiatives, with specific programs illustrated in Figure 1 below.

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