Job Valuing is Regaining Velocity

A recent W@W Workspan published article (September, 2015) titled, “JOB EVALUATION – Relevant, Robust and Reimagined” was written by Hay Group executives Phil Johnson, Tom McMullen and Mark Royal. The article began with an historical perspective of job valuing being a popular job measurement tool from the 1960’s to the 1980’s. The authors noted that since the recent economic downturn and slow recovery period, job valuing has regained momentum as a valuable management process in determining relative internal job worth as it relates to its contribution and impact on company goals and outcomes. Johnson, McMullen and Royal made the following insightful statement in their job valuing article, “Many organizations woke up to the fact that a process that analyzes the work that needs to be done can provide much more than the way to link to market and determine appropriate pay levels.”

DBSquared’s DBCompensation software has a proven proprietary job valuing system with a 1985 origin. With this efficient and easy to use HR technology, job descriptions and job valuing are simultaneously developed and displayed in a job evaluation chart. The job valuing chart offers a high-level job fine-tuning and valuing feature and a link to automatically align final job descriptions with final job values. DBSquared’s compensation professionals support the philosophy of validating internal job valuing and proposed pay structures with external market pay comparisons. The combination of internal job valuing and external market pay analysis produces a more precise and comprehensive pay structure where all jobs have a value on the company’s internal pay line and pay structure.

Recently, we had a VP of HR and Administrative Services of an electric utility company make a comment about the professional integration of internal and external job valuing processes in the DBCompensation software. He was pleased with the recent job classification and compensation study and how the software simplified the process without losing creditability, validity and transparency.

DBCompensation Software Updates Coming Soon!

We have been busy this year making many improvements to our DBCompensation flagship product. Many of the improvements were made “under the hood” so to speak, including numerous performance and technology enhancements.

These improvements have been completed under the DBCompensation 9.0 version number. After much deliberation, the principals at DBSquared have decided to complete a second group of enhancements through the end of the year. This second group of enhancements includes predominantly user-requested features, and we expect to roll out the next software update as DBCompensation 10.0 in the first quarter of next year. This release will include a combination of all the features from versions 9.0 and 10.0.

As usual, we will plan to host user meetings to demonstrate all of the new features, obtain feedback from our valuable customers, and answer any questions. So be sure to watch for more information in upcoming newsletters.

We look forward to delighting you with many great new features. Thanks, as always, for your continued business.

2016 Salary Increase Projections

The average adjustment for 2016 will be three percent (3%) based on data from the following compensation/consulting groups:

You need a third party to evaluate your organization’s current compensation practices and establish a fair, objective, defensible and competitive compensation structure including outside market data for your industry. Please contact us today to learn how we can help.

Performance Appraisals: PAINFUL to JOYFUL

Why do supervisors and managers dread receiving emails and/or phone calls from Human Resources about employee performance appraisals that are due or past due? Some of the typical reasons stated by these performance evaluators follow:

• I do not want to rock the boat and tell the truth about an employee’s poor performance
• I’m not prepared to complete the performance appraisal(s)
• Performance appraisals take too much time
• I have not documented any good or poor performance actions during the past year
• I would rather fix a machine than talk to an employee about their performance
• I do not like conflict and it is easier to rate all employees with a “meets expectation” rating
• If confronted by the employee for performance examples, all I can remember are recent events
• Maybe I can outlast HR’s request for completion of the performance appraisal, probably not

How will Companies and HR professionals turn performance management appraisals from PAIN to JOY?
Most management tools or actions are not meant to be painful. In fact, if administered in a confident and personable manner, performance management appraisals and feedback sessions can change a company’s culture and its productivity. If managers or supervisors believe in on-going performance management, they will provide regular feedback and address employee issues before they become identifiable “poor” performance outcomes. Effective managers and supervisors believe in setting goals, providing timely feedback and developing employees’ talents.
How can HR, Managers and Supervisors take the angst out of performance appraisals (P.A.)?

• Use of technology for efficient and timely retention of on-going performance actions/events
• Portable technology to capture employee actions/events during daily MBWA observations
• Use of practical and user friendly forms that are as simple as obtaining cash from an ATM
• Set clear goals for performance or for improving an employee’s performance
• Offer feedback regularly so that the P.A. session is a summary and not a surprise!
• Simplify the performance appraisal process and time for completion
• Reward and recognize supervisors for effective performance management actions
• Teach and model effective performance management actions and appraisal work
• Help performance evaluators prepare for employee feedback sessions

 

COMPENSATION PROGRAM COMPLIANCE REACHING DOWN TO MID-SIZE EMPLOYERS

Bruce Johanson, one of the principals for DBSquared was invited to conduct a webinar on the HRsoft™ Talent Takeaways Series. Bruce presented a one-hour webinar on Compensation Program Compliance “Integrating Internal Equity with External Competitiveness using proven compensation job valuing, market pay studies and regression line analysis”. For a copy of the PPT slides please contact Brian Sharp. DBSquared and HRsoft are strategic partners in the Compensation and HR software technology sector.

Brian Sharp with HRsoft™ | Chief Marketing Officer | Email: Brian.Sharp@hrsoft.com | Web: http://hrsoft.comHRsoft™ – High Impact Talent Management™ Software

FLSA Overtime Rules Out Soon: Be Proactive and Ahead of the Curve!

In order for a two week vacation to be relaxing and fun, it takes a certain amount of pre-planning. Our family completed a two week vacation out West with various overnights and stops at famous places in Kansas, Utah, Wyoming, Montana, South Dakota, and Missouri. We had set times and days for certain events and some flexible time for what we might discover along the way. Our children were involved in the planning and it by far was the best vacation our family has taken to this day.

When you hear the acronym FLSA, it is not a favorite term that rates as high as a two week vacation. However, they are similar as they both require proactive planning so the outcome will be positive. The proposed FLSA changes following President Obama’s directive to expand the eligibility for more employees to receive overtime pay is imminent. The World at Work organization estimates 6,000,000 exempt salaried U.S. employees could become non-exempt hourly workers. Based on several sources, the salary test and primary duties test for determining whether a job is classified as exempt or non-exempt will be impacted. The current annual exempt salary level of $23,660 will probably be increased to $52,000 or $1,000 a week. The primary duties test is projected to require that at least 50% of the essential duties be considered as exempted level duties.

Our automated web-based job description writer, DBDescriptions, will help organizations with the primary duties test. Job duties and tasks can be reviewed to determine what positions may be at risk as our software tool allows you to enter in a percentage of time and frequency for each essential duty. With the collaboration feature, managers and employees that live and perform the job can and should weigh in to confirm the makeup and requirements of the job. In the future, there is a strong likelihood that the Department of Labor will actually want to observe an employee in their position to verify what the job description states compared to actual performance. Making sure that the job description is right and matches with what the employee is doing will be a normal function of the company’s compliance efforts.

DBDescriptions was created in 2008 and introduced to the public in 2009. The 1100 pre-loaded job descriptions and the position analysis questionnaire help to create FSLA and ADA compliant job descriptions in minutes. We believe that we are the first SaaS-based job description management tool and our annual per user fee for unlimited access is only $295. This is inexpensive insurance which will give you a peace of mind equal to your next two-week vacation

Chicago Rock Band and DBCompensation

 

We recently attended the Chicago Rock Band in concert at the Walmart AMP in Northwest Arkansas. The two hour performance was awesome and four of the nine current band members were part of the original group. A paragraph from their website below provided some history of one of the best bands in the country.

In 1967, Chicago musicians Walter Parazaider, Terry Kath, Danny Seraphine, Lee Loughnane, James Pankow, Robert Lamm, and Peter Cetera formed a group with one dream, to integrate all the musical diversity from their beloved city and weave a new sound, a rock ‘n’ roll band with horns. Their dream turned into record sales topping the 100,000,000 mark, including 21 Top 10 singles, 5 consecutive Number One albums, 11 Number One singles and 5 Gold singles. An incredible 25 of their 34 albums have been certified platinum, and the band has a total of 47 gold and platinum awards. In 2017, the Chicago Rock Band will be 50 years old.

We have seen many groups come and go, but there are only a few that have been able to stand the test of time and continue to reinvent themselves. Chicago has done that with five new band members who gel well with the past four original band members. The nine member band is producing new albums and they played a couple of their new songs at the concert as well as tons of the favorites that brought the crowd to its feet several times during the event. They are embarking on a new tour that will cover 33 cities/performances in the U.S. and Canada.

The foundation of DBCompensation was started in 2001 when Blair Johanson and Dale Oliver, two principals of DB Squared decided that it was time to automate the job descriptions and compensation management process or what was called back then the “Job Evaluation and Salary Administration Program” or “JESAP” for short. Over the next four years, the software was created and used internally before our clients started asking to have the software for their personal use. This was like being asked to go out on tour! It was exciting to see the interest and energy over a much needed time-saving and effective decision-making tool. Since 2005, the DBCompensation tools have been upgraded and enhanced over eight times. Our job evaluation and compensation groupies (clients) continue to expand and our latest change was to provide an interactive scatter graph that color-codes an organization’s employees by age, ethnic background, and gender to see from an equity and competitiveness point of view if the organization is compensating its employees fairly or not. Our next goal is to add a performance management module which we believe will be another important piece of the overall compensation management process. DB Squared and one of its great products, DBCompensation is celebrating ten years, and though it doesn’t have the history like the Chicago Rock Band, the HR software program is causing our users to stand up and cheer and promote the many benefits of the software to others around the country. Who knows, maybe we will be asked to do a TED talk which would be equivalent to our group going out on tour.

WorldatWork 2015 Conference Exhibit Hall Vendors Offer the Three New R’s

 

When I was in school, I heard and learned about the 3 R’s: Reading, Writing and Arithmetic. While exhibiting our compensation management software at the recent WorldatWork Total Rewards conference in Minneapolis, Bruce, Dale and I noticed that the exhibit hall vendors were offering products and services that support a different set of three R’s associated with employee engagement: REVIEWING, RECOGNIZING AND REWARDING employees. Each year at the Total Rewards conference, we like to determine the underlining theme for compensation management products and services being offered by the exhibit hall vendors. Talent Management, Performance Management, Total Rewards and HRIS Systems Management have been some of the previous focused offerings and this year’s focus was definitely on “employee engagement” with the three R’s. Talk about specialized rewards, there was even a vendor offering gold and silver coins for special employee recognition rewards and for employee retirement funding options.

We believe that 2015 will be a pivotal year for base compensation and total rewards offerings as employment of competent employees becomes more competitive along with increases in minimum wage levels offered by large corporations inclusive of Walmart and McDonalds and mandated increases in minimum wage levels by several states across the country. Doug McMillon, President and CEO of Walmart believes that the increase in entry wages to $9 an hour in April of this year and $10 an hour by February 0f 2016 will have a positive impact on employee morale and customer service. Also, Doug made the following statement in the June, 2015 issue of Celebrate magazine, “We’re also strengthening our department manager roles and will raise the starting wage for some of these positions to at least $13 an hour this summer and at least $15 an hour next year. There will be no better place in retail to learn, grow and build a career than Walmart.”

DBSquared and its compensation management software products and services are ready to help companies and organizations with building, updating and maintaining their base compensation structures. Developing consistent, comprehensive and compliant job descriptions with corresponding internal job values, uploading employee HRIS data and inputting market pay comparisons does not need to be painful and time-consuming. These key compensation management components for developing a fair and competitive base compensation structured program when integrated and enhanced through software technology become productive and efficient processes for accomplishing the pay and position changes as mentioned by Doug McMillon.

We have over 1,000 HR and Compensation professionals using our software products and consultation services. We’re driving productivity and changing the role of HR with practical, real-time solutions. During our DBSquared presentation at the W@W conference, we stated that our key take-away focus is that we want our clients to say that we helped them with compensation management productivity and efficiency through proven systems integration and defensible processes that have been field tested.

Closing the Compensation Management Loop
By the way, we were able to see the HRsoft’s Compview™ software program at the WorldatWork conference and it complements our DBCompensation software program. Our program creates the foundation of job descriptions, job point ratings, and outside market data to create the base job classification and salary range structure. HRsoft’s program handles performance management, incentive compensation, and total rewards management. Their system also has an automated approval string process. With both programs, you would have the equivalent of an expensive HRIS system that is fully functional and comparatively inexpensive. You can learn more about HRSoft Compview™ by visiting their web site

Pay Decisions – Increasing Complexity

I recently read a Workspan article titled, “What Should You Pay” that was written by Robert Greene, PH.D., CCP, CBP, GRP, SPHR, GPHR, a principal with Reward Systems, Inc. Dr. Greene’s article focused on different approaches to managing base pay and how the approaches should be the right fit for your company. Dr. Greene outlines three approaches: Pay for the job, pay for the person and paying for the results. He states that, “the pay for the job” approach ties base pay to the job’s relative internal value and to its market value; that when an organization sees value in having professional and technical employees who can perform a variety of tasks, it can make a case for paying for these capabilities by using a “pay for the person” approach and when utilizing the “pay for the results” approach, rewards come in the form of variable pay, and base pay might be set relatively low.” Dr. Greene’s comment about the use of variable pay is supported by another Workspan article (Nov. 2014) written by Ken Abosch with Aon Hewitt. Mr. Abosch’s article made the case for the importance of planning when developing a pay-for-performance program that utilizes variable pay as the major compensation differentiator when compared to merit base pay adjustments. Ken provided a chart in his article that displayed annual salary and variable pay percentage increase averages from 1998 to 2015 (projected). In 2014, variable pay awards averaged 12.7% of salaried employees’ payroll and the average base salary increase was 2.9%.

In working with our clients and observing compensation and total rewards in pay and benefits’ studies that are produced annually for compensation associations, human resource SHRM chapters and various trade organizations, I believe that Dr. Greene’s article is timely and supports the notion that effective total rewards programs are becoming more complex and dynamic post the 2008 – 2010 recession.

The difference between annual cost of living percentage increases and annual employee pay adjustments has been declining for the past four decades. The pressure is increasing for organizations and companies to distribute their wages and benefits more wisely and effectively as global competition and governmental regulations expand and with the decline in employees’ purchasing power.

We encourage our clients to foundationally “Pay for the Job” as defined in Dr. Greene’s article and then differentiate compensation beyond base pay with paying for the person and paying for the results as recommended by Dr. Greene. Utilizing professional and technical competencies combined with variable pay for performance provides the flexibility to compensate high performance employees that are driving impactful end results and to pay competitive base salaries for steady performing employees that keep the production lines flowing and the power and water running for their customers.

As pay decision processes become more complex, HR and Compensation professionals need to increase the use of technology to manage the ever-changing total rewards systems that are driving positive behavioral performance outcomes for greater business and organizational results.   HR technology is evolving to meet new demands from management to move from forms and tables to dynamic and interactive compensation and performance evaluation tools that are focused and yet simple to understand and complete.

In a simple way, the programmable house and office digital thermostat was a major technology break-through for managing inside space temperatures and related energy costs for periods of time as compared to the manual circular dial and plastic temperature level controls. HR technology anyone?

Gaining the Engineer’s Approval: Job Classification and Compensation

 

Our firm completed a few job classification and compensation study projects in Kentucky last year and one of the side entertainment venues was the Keeneland Race Track in Lexington. What a nice horse racing track and facility for guests traveling to the Lexington area from within U.S. and around the world to see these amazing animals and jockeys racing full speed to the finish line. While spending the day at Keeneland, it became pretty apparent the amount of precision and forethought that goes into all the systems and processes for a smooth operating race track facility. The display board computer and graphics, the betting system software and hardware requirements, the photo finish computer and systems, the beverage and food POS software and hardware configuration, the publishing systems to produce a daily race track program, and the HRIS system to manage human capital compensation and benefit programs. While the Keeneland Race Track was being developed, constructed and configured for its ultimate opening day and during its on-going operation, a team of engineers and information technology professionals used and continue to use their skills, training, knowledge and keen eyes to ensure no stone is left uncovered. This leads to consistent and efficient daily race track operations.

When we completed one of the job classification and compensation study projects for a public utility, the final step required approval by the utility board of commissioners. One of the commissioners is a mechanical engineer and his review of the proposed job classification and compensation study project was through the lens of a skilled and knowledgeable technical professional. His questions about the study internal job valuing and external market pay study processes were comprehensive and precise. It was his desire as a member of the commissioners’ team to test the processes and systems to determine its validity and value for the public utility organization. After answering several questions and having a good discussion about the job classification and compensation study project, the commissioner was satisfied and understood that the Utility’s new job classification and compensation management system. It passed the engineer’s filter for comprehensiveness and precision.

We gained the Engineer’s approval and he was going to support passage of the new job classification and compensation study.

What are the components of a “state of the art” job classification and compensation management study project?

  • Comprehensive, consistent and compliant job descriptions developed in an automated electronic position analysis questionnaire database system with a collaboration feature.
  • Job descriptions and job rating systems that are integrated and aligned for efficient internal job valuing and placement within the organization structure.
  • Automated employee information uploading systems to minimize or eliminate data entry. Employee information that includes at minimum, ID #, Last Name, First Name, Job Title, Pay, Gender, Race/Ethnicity, Date of Birth, Date of Hire, EEO or Merit Rank, Department and Supervisor’s Title.
  • The ability to include external market pay data comparisons to evaluate internal pay competitiveness and validate the job valuing process for greater compensation management precision and defensibility.
  • Integrated and interactive system output tables, graphs, worksheets and reports for effective base compensation management structures and decisions that foster organization and employee behaviors and efforts that are aligned to meet objectives and goals.