Horizon Point Consulting

Category: Human Resources

We know HR. Read our Human Resources blog archives for stories and best practices from our work with real clients and personal experiences in the world of HR.

  • 7 Things to Consider in Wage Fairness

    7 Things to Consider in Wage Fairness

    Pay disparity has long been a topic, most notably with discrepancies in pay between women and minority groups.   The #metoo movement and #blacklivesmatter movements have brought this issue even further to the forefront.   And rightly so. 

    Payscale published its annual Gender Pay Gap Report in March, stating that, “Since we have started tracking the gender pay gap, the difference between the earnings of women and men has shrunk, but only by an incremental amount each year. There remains a disparity in how men and women are paid, even when all compensable factors are controlled, meaning that women are still being paid less than men due to no attributable reason other than gender. As our data will show, the gender pay gap is wider for women of color, women in executive-level roles, women in certain occupations and industries, and in some US states.” 

    The report is definitely worth a deep dive to read if you have a chance.  

    If your organization is concerned about pay disparity, what should you do? It starts with considering all the factors that go into determining pay:

    1. Consider what your organization values.  What creates value for your organization by creating a competitive advantage?  These are compensable factors.   As another Payscale report states, “It’s also perfectly reasonable to pay people in the same position differently as long as the compensable factors are justified and aligned with legal requirements.” 

    2. Consider time.  Years of experience overall and tenure with the organization are important factors that affect pay. 

    3. Consider performance.   Performance can and should affect pay.  Make sure you have a documented and systematic way of measuring performance that can justify and backup pay differences. 

    Examine your wage data.

    4. Conduct a pay equity analysis.   A professional in the field can help you conduct regression analysis to see what factors are contributing to pay disparities if any, and if these factors are based on protected classes and/or on factors mentioned above like years of experience, compensable factors, etc. 

    5. Get your legal team involved.  I know, I know, I hate to call the attorney too unless it is absolutely necessary, but it is necessary here.  This can help you do a pay equity analysis under attorney-client privilege, and based on what you discover, help you chart the right path forward. 

    Finally, consider ways you can help to combat systemic issues with pay disparity: 

    6. Consider policies and “norms” that impact gender or other demographic factors like race differently.  A documented reason for macro gender pay disparity issues is tied to women leaving the workforce altogether or seeking more flexible work opportunities to raise children.   Considering how your organization can retain female talent during child-rearing years is an important consideration for individual organizations and for the entire economy on a macro level. 

    7. Teach advocating and negotiation skills to women and minority groups.  I personally believe one of the reasons women and some members are of minority groups are paid less is because they don’t ask for what they are worth.  There is evidence to support this (and there is evidence that contradicts it).  Helping people understand the market for their skills and experience and giving them the confidence to stand for what they are worth and ask for it is empowerment at its finest.  I’ve found that many people just don’t know what they don’t know when it comes to the knowledge and skills needed to advocate and negotiate, so they just don’t.  Over a lifetime, this could mean a substantial difference in lifetime earnings. 

    Are you concerned about pay fairness and pay disparity at your organization?

  • 8 Steps to Take if Your Compensation is Out of Line with the Market

    8 Steps to Take if Your Compensation is Out of Line with the Market

    2020 has been a year of polar opposite reports about compensation from our clients.  Some have implemented hiring and pay freezes, even laid people off, while others have more business than they know what to do with and are concerned they are losing people because their wages are not competitive with the market.  

    So, what do you do if you are concerned about the market competitiveness of your wages?

      1. First, decide if you haven’t already, what your wage strategy is. Do you want/need to lead, lag, or meet the market?  Knowing your destination before you take the journey is important.  Several things weigh into this such are your budget, margins, industry, location, culture, and overall philosophy on compensation.  There is no right or wrong answer, but the key thought in all this should be what creates a competitive advantage for your organization. 
      2. Pull market data.  Here is some information on sources for data.   Not listed in this post as a source that we like to use now is Economic Research Institute (ERI)’s Salary Assessor.  One of the things we like about ERI data is you can pull it by level (1,2,3)  and by job title, which can help you hone in on comparing apples to apples with your organization’s wages.  We suggest utilizing multiple sources. 
      3. Based on your strategy, determine what is most important for you to focus on looking at the market data. If your strategy is to lag the market, look at the 25th percentile of market data as a benchmark. If your strategy is to meet the market, look at the midpoint (50th percentile) and an average of the data, and if your strategy is to lead the market, look at the 75th percentile of the market data for benchmarking. 
      4. Ask yourself: Are you out of line with the market and your strategy? 
      5. If you are below the market and your overall goal, consider how you can best bring your wages up and within the range of your market data.  This could be a one-time salary increase for certain or all positions, a percentage increase across the board in your pay ranges/salary structure, or consideration of a variable pay system that includes other forms of compensation than base pay to bring your overall compensation in line with the market.  Variable pay structures can help you bring in other considerations for payout like your overall profitability. 
      6. Consider non-monetary rewards that align with your company’s culture and philosophy.  Based on research, flexibility may be more valuable to people than monetary rewards.  Can you implement more flexible work policies that combat recruiting and retention issues because of less than average wages? 
      7. If wages are out of line with the market and your organization can’t meet the market in a way that aligns with your strategy in one overall step or change,  consider a phased-in increase to your overall salary ranges across a set period of time like every six months or every year. This can be a way to move your overall comp strategy (not just a position here or there) to get to where you need to be. 
      8. Evaluate your wages against the market more often.  The organizations we see with the most trouble with their wages not meeting the market are ones that have gone five years or more without comparing their salary and structure to the market.  The more you lag behind, the harder and harder it becomes to catch up.  We suggest looking at overall compensation structure adjustments every two to three years unless there are large fluctuations in the market in a short period of time.  You should look at individual wages for specific jobs more often, every year or so, especially if you are experiencing retention and or recruitment issues. 

     

     

    Do you need to take a look at your wage competitiveness? 

  • Is Employment Really At-Will?

    Is Employment Really At-Will?

    One of the questions I often help employers work through is can they terminate an employee. And too often I hear “But we’re in an at-will state” or “we’re an at-will employer”.

    At-will employment is often misinterpreted to mean that an employer can terminate an employee whenever they please, and while at-will employment policies do state that the employee or employer can terminate employment at any time, with or without cause, and with or without notice, there are limitations to that on the part of the employer. 

    First, all states are at-will employment states. Some states have added legislation that further limits the bounds of at-will employment, but the overall objective is the same. 

    So what does at-will employment really mean? 

    Yes, employees can resign their positions at any time, with or without notice, and with or without reason. And yes, employers can impose penalties if employees do not give notice within the limits of federal, state, and local laws, such as setting a vacation policy that requires 2-weeks’ notice to receive a payout of accrued, unused vacation time upon termination. And yes, if an employee gives a 2-week notice, the employer can opt to take that notice effective immediately, and it’s still considered a voluntary resignation. 

    But what at-will employment does not mean is that an employer can terminate employment with or without notice, and with or without cause, if doing so violates other employment laws. 

    When reviewing an employer’s request to terminate an employee, there are a few things that I take into consideration:

    1. Is the employee in a protected class? For example, are they female, are they over the age of 40, are they a minority, are they disabled?
    2. What is the employer’s reason for wanting to terminate employment? Are there performance issues and if so, have they been addressed with the employee, and has the employee been given the opportunity to improve performance? And have those performance issues and conversations been documented? Is it an attendance issue? Is there documentation of poor attendance and disciplinary action for violation of the attendance policy? Is there a written attendance policy? 
    3. Is the termination a layoff? If so, is it truly a layoff or is the employer using that reason as means to get rid of an employee they just don’t want? While there are no legal limitations on how long a position must be vacant in order to constitute a layoff, the adhered to standard is six months unless there is a significant change in business. If an employer lays off an employee and refills the position in 2-3 weeks, chances are it wasn’t really a layoff but an excuse to terminate an employee they didn’t want. 
    4. Is there an employment contract that impacts Employment-At-Will? Employment contracts are a legally binding document that outlines the terms of employment, and often includes the length of employment under the contract and penalties for terminating the contract early, both for the employee and the employer. Such contracts may create limitations to employment-at-will.  
    5. Would a judge find this termination justified? If an employee were to file a lawsuit for wrongful termination, how would a judge see it? Have I as an employer covered all my bases to make sure the termination was within the law? Documentation is critical to this decision. If an employer wishes to terminate an employee, they must be able to show justification for that decision. 

    Employment-at-will is not a free pass to terminate employees “just because.” The employer is still responsible for ensuring that the termination is justified and within the limits of federal, state, and local laws. 

  • Stop Selling When Interviewing Candidates

    Stop Selling When Interviewing Candidates

    When I was a recruiter, interviews started off with a little overview of the organization.  I’d tell them a little bit about what it was like to work for our company and also cover information about how the interview and hiring process worked before launching into questions.  

    I often had the chance to sit with hiring managers interviewing candidates as well.   The difference in how the hiring manager handled the first part of the interview related to information about the company was always interesting.  Some said very little if anything about the organization or their department and/or team, while others gave a dissertation on it all.  Some bragged and bragged about how great it was to work at our company, others gave the good, the bad, and the ugly about what the work and the environment was like. 

    Turns out, there is a way to do this and a way not to if you want to hire the right candidates.   According to research by Jennifer Carson Mar and Dan Cable on the effects of selling on interviewers’ judgements,  it’s not so much on how the candidate portrays him or herself in the interview, it’s about how the interviewer portrays himself or herself and the organization. 

    Amy Cuddy describes the findings of the study well in her book Presence: 

    “The more the interviewers were focused on attracting candidates, that is the more they wanted to be liked, the less accurate they were at selecting candidates that would do well after being hired in terms of performance, good citizenship, and core values fit. 

    The takeaway is this.  Focus less on the impression you are making on others and more on the impression you are making on yourself. The later serves the former.” 

    So, if you want to hire people who will perform well, get along well, and share the values your organization espouses, stop selling, and be authentic. 

    I wonder if the implications of this study extend to other areas of HR?  When do we need to sell and when do we not? 

    When do you turn on your selling style and turn it off at work? 

     

    Like this post, you may also like: 

    3 Reasons to Make Realistic Job Previews a Part of Your Hiring Process

     

  • The Misconceptions of Business Continuity Planning

    The Misconceptions of Business Continuity Planning

    Last week I had the privilege of leading a workshop in partnership with the Huntsville-Madison Chamber of Commerce to discuss Business Continuity Planning with leaders in our area. The Covid-19 Pandemic caught many organizations unprepared and they have struggled through how to keep their business going during this time.  One reason for the lack of preparedness is misconceptions organizations have regarding Business Continuity Planning. 

    Misconception #1: My organization doesn’t have the time to create a Business Continuity Plan. And besides, we’ll never need it. 

    Yes, Business Continuity Planning takes time. It’s not something you can create overnight. And it takes input from multiple sources within your organization and possibly even outside of your organization. A successful Business Continuity Plan is designed by a team, not an individual. And even once designed, it requires regular review and updates. But the time you spend up front to create a solid Business Continuity Plan will save you time should you ever need to respond to a large-scale emergency. It will also ensure that you’re able to get your organization back up and running quickly and efficiently and minimize the impact to your employees & their families, clients, vendors, and your revenue. 

    I think it’s safe to say that many organizations now understand and acknowledge that they do have a need for a plan. But they’re scrambling to try and create that plan as they respond to the impact of the pandemic and doing so could be detrimental to the design of the plan.  

    Misconception #2: My organization isn’t big enough to need a Business Continuity Plan. 

    Regardless of the size of your organization, you need to assess your potential risk due to possible large-scale emergencies and determine how you would need to respond in order to keep your organization afloat and to insure the safety and well-being of your employees, their families, and your customers.

    One of my biggest concerns during the pandemic has been small businesses and how they will survive. Many small businesses were required to close their doors and that had a major impact on their revenue and their ability to retain employees. Sadly, some may not survive. Creating a plan to help assess the impact and determine how to respond could be the difference between surviving a large-scale emergency or having to close your doors permanently.  

    Misconception #3: Our employees will know what to do in the event of a disaster. 

    Employees are trained and prepared to handle small-scale emergencies and can usually do so without much direction. Your system goes down temporarily, your power goes out for the day. But they aren’t trained or prepared to handle large-scale emergencies. They look to leadership to guide them and through that guidance to put them at ease. And leadership needs to be prepared in advance to provide that guidance, to make critical decisions and implement those decisions, to reroute employees to assist with the restoration of critical functionality, and to honestly be the calm in the storm. 

    Watching leadership flounder in a time of crisis could be devastating to an organization’s employees, customers, and vendors. It could also have a negative consequence on your organization’s public image and reputation. 

    Misconception #4: We’ll just communicate with our employees if the need arises. 

    Last summer my father had open-heart surgery which resulted in pneumonia and a second surgery. I remember talking with my mother when he was readmitted to the hospital trying to determine who needed to be notified, who was going to notify them, and what they needed to be told. Neither of our minds was in the right place to be making those decisions at that time (and I’m sure we forgot some people). 

    The same goes for organizations. Determining who needs to be notified, who is responsible for notifying them, and what information to share should not be done in the middle of a stressful situation. Plan your communication in advance. By doing so, you can create a checklist of who needs to be informed and when, who will handle that communication, and what needs to be shared. The information you provide to your employees may be quite different from the information you share with customers and vendors. And some notifications may need to be made as soon as possible, while some can be delayed. By creating a list in advance and drafting scripts for each group, you can efficiently get that communication out and be sure that all necessary parties receive notification. 

    Misconception #5: We have insurance policies to cover us. 

    Most insurance policies will cover physical damage, many will not cover, or fully cover lost revenue. Review your insurance policies and determine if you need to adjust limits on a regular basis. In addition, your organization may want to consider adding Business Interruption Coverage. 

    While these policies can certainly help in a time of need, none of these insurance policies are going to get your organization back up and running. They may provide financial assistance to do so, but it is up to your organization to respond to and recover from an emergency. 

    Designing and implementing a Business Continuity Plan is no small feat, but if the Covid-19 Pandemic has taught us anything, it’s that the unexpected can happen and we need to be prepared for if and when it does. Is your organization prepared? 

     

    Here are some additional resources on Business Continuity Planning: 

    Preparing for the Worst: Business Continuity Planning

    Defeating the Kobayashi Maru, the No-Win Situation 

    4 Keys to Leading Through Crisis

    Creating a Business Continuity Plan Webinar & Worksheets