Survey: US Employers Rethinking Compensation Programs

Survey: US Employers Rethinking Compensation Programs

A new survey released last week by Willis Towers Watson illustrates the key factors driving US companies to reassess and change their compensation practices. In explaining why they were making these changes, employers cited cost, manager feedback, changes in the marketplace, and employee feedback as the most common motivations. WTW’s Getting Compensation Right Survey, conducted in April 2018, surveyed 1,949 employers worldwide, including 374 US employers whose total workforce comprises more than 5.2 million employees.

Among the US employers, nearly half said they were considering or planning on redesigning their annual incentive plans, while more than a third said they were changing criteria for salary increases. This highlights a trend we’ve been seeing over the past few years, in which employers are rethinking the traditional annual raise and opting for more targeted and differentiated increases or bonuses to reward and incentivize performance. Many employers also told WTW that they were refocusing performance management to include future potential and possession of skills needed to drive the business in the future, as well as introducing recognition programs to provide on-the-spot rewards.

One move many companies are making is toward greater pay transparency, with 53 percent of respondents saying they were planning on or considering increasing the level of transparency around pay decisions. Our latest research at CEB, now Gartner, also finds that transparency is a growing concern among rewards functions. One driver of this trend is the increasing amount of information available to employees and candidates about what other people are earning in their roles, both within their organization and at other organizations, through external sources like Glassdoor or LinkedIn.

In our employee survey, we found that 42 percent of employees who had consulted one of these online sources for pay information had thought about leaving their current employer as a result. These external forms of transparency are making it increasingly important for employers to be more forthcoming about their pay practices and take control of the narrative around compensation at their organization to get ahead of employees who might find (potentially inaccurate) information elsewhere and draw their own conclusions.

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Dogs at Work May Boost Engagement, But Don’t Forget the Downsides

Dogs at Work May Boost Engagement, But Don’t Forget the Downsides

Today marks the 20th annual observance of Take Your Dog to Work Day, an event launched by Pet Sitters International in 1999 to promote dog adoption by encouraging organizations to let their dog owner employees bring their canine companions to work for the day. Take Your Dog to Work Day highlights Americans’ increasing level of devotion to their pets, especially among Millennials, the largest generation of pet owners today. Rising rates of pet ownership are inspiring employers to offer benefits like pet insurance and even pet bereavement leave.

Indeed, many dog owners would love it if every day were Take Your Dog to Work Day, and some research purports to show that pet-friendly workplaces have many upsides, from increased employee engagement and loyalty to reduced stress levels and greater overall wellbeing. For instance, a new study from Nationwide and the Human Animal Bond Research Institute suggests that employers with pet-friendly workplaces enjoy greater engagement among all employees, not just dog owners, Nick Otto and Yasemin Sim Esmen report at Employee Benefit News:

According to the study, 91% of the workforce feels more fully engaged in the work compared to 65% of employees who work in a non-friendly workplace, which is defined in the study as one that allows pets in the workplace (regularly or occasionally) and/or offers a pet-friendly employee benefit, such as health insurance. One of the interesting things that the study noted was the camaraderie and positive relationships with both supervisors and coworkers (52% and 53%, respectively) at pet friendly companies versus non-pet-friendly workplaces (14% and 19%).

Still, just a fraction of US employers allow employees to bring their pets to work, but some high-profile organizations do: Amazon has allowed dogs in the office at its Seattle headquarters for about 20 years, Jennifer Calfas reports at Time, and over 1,000 dogs come to work there with their owners on a regular basis. What works for Amazon, however, may not work for all workplaces. As Calfas notes, some dogs aren’t suited to spending time in an office, while some employees will object to having them around:

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How ‘Flexibility Bias’ Can Hinder the Pursuit of Work-Life Balance

How ‘Flexibility Bias’ Can Hinder the Pursuit of Work-Life Balance

As HR leaders know all too well, it’s one thing to give employees a benefit, and quite another to actually get them to use it. This problem often arises around paid leave and flexibility: An organization will offer ample paid vacation, parental leave, and flexible work options, only to find that employees don’t take full advantage of these options, often because their managers, their peers, or the company culture discourages them. Even if the organization’s policy is generous, employees may fear that using their leave entitlement or working flexibly will make them look less dedicated, cause them to miss out on prestigious assignments, or otherwise hold them back in their careers.

Sociologists Lindsey Trimble O’Connor and Erin Cech examined this phenomenon, which they call “flexibility bias,” in two new studies, the findings of which they detailed at the Harvard Business Review last week:

We show that when employees see workplace flexibility bias in their organizations, they are less happy professionally and are more likely to say they will quit their jobs in the near future. Importantly, the effects of this bias aren’t limited to working mothers. Even men who don’t have kids and who have never taken family leave or worked flexibly are harmed when they see flexibility bias in their workplaces.

We also find that perceiving bias against people who work flexibly not only impacts work attitudes but also follows employees home. It increases their experiences with work-life spillover, minor health problems, and depressive symptoms, as well as leads to more absenteeism at work and worse self-rated health and sleep. These effects occur for working moms, dads, and childless women and men alike. The effect holds across age groups and racial and ethnic categories as well. …

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Pay Transparency Matters Most As a Means Toward Employee Confidence

Pay Transparency Matters Most As a Means Toward Employee Confidence

There are very few talent-related issues that generate as much attention as compensation—in particular, how compensation compares among all the various employees at an organization. Historically, companies have preferred not to share information about compensation out of fear that those who are on the bottom half of the compensation chart will become disappointed and disengaged when they learn that they are earning less than their colleagues. This fear has been a major factor in the business community’s objection to the CEO-employee pay ratio reporting rule that came into force in the US this year: When you publish the salary of the median employee, half your employees inevitably discover that their pay is “below average.”

This idea of hiding compensation for fear of disengaging employees is a relic of the past, however. The reality today is that employees can get a sense of how their compensation stacks up compared to their peers through a growing number of websites that share this information publicly, such as Glassdoor, PayScale, or Salary.com. In other words, employees can already find out how their compensation compares to others and are already talking about it; the question for senior leaders is whether they want to participate in or shape these discussions.

As technology has forced greater transparency in compensation, some companies have decided to actively manage the conversation by proactively revealing to their employees what their co-workers, managers, and senior leaders earn. The New York-based tech company Fog Creek Software is one such organization; eight months ago, it gave its three dozen employees a chance to see what their peers were making. On Bloomberg’s “The Pay Check” podcast this week, Rebecca Greenfield checks in with Fog Creek to see how it went:

Fog Creek’s chief executive officer, Anil Dash, believed … that salary transparency would shine a light on unfair pay practices and ensure things stayed that way. Dash, an entrepreneur, prominent tech blogger and prolific tweeter, is a rare, pro-union, tech CEO who also believes in the old-guard internet principle that information wants to be free. “Transparency is not a cure-all and it’s not the end goal, it’s a step on the way to the goal, which is to be fair in how we compensate everyone,” Dash said. …

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In Time Management, Anticipating Interruptions Can Boost Engagement and Productivity

In Time Management, Anticipating Interruptions Can Boost Engagement and Productivity

Time management is a perennial challenge for any professional. As HR practitioners’ roles become more strategic, they find themselves under increasing pressure mitigate the time costs of non-strategic activities, as well as to figure out ways to improve time management throughout their organizations. A recent study led by London Business School professor Michael Parke points toward a possible solution.

Parke and one of his co-authors, Justin Weinhardt from the University of Calgary, discussed their findings in a recent Harvard Business Review article. Workers juggling competing demands on their time, they explain, can significantly increase their engagement and productivity at work by moving away from the traditional time management approach, toward a new approach they call “contingent planning.” In this type of planning, people “consider the possible disruptions or interruptions they may face in their work day and devise a plan to address them if they occur.”

“Contingent planning is less commonly used than time-management planning because individuals frequently make plans that overestimate how much they will get done and underestimate (or fail altogether) to account for how their work will be disrupted,” they add.

The researchers found that either type of planning positively impacted daily engagement and daily productivity in the absence of significant interruptions. However, when employees faced many interruptions in the course of a day, only contingent planning had a positive impact.

Talent Daily reached out to Parke for more ideas about how professionals can practice contingent planning in their day-to-day work, and he provided the following five tips:

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It’s Not All Fun in Gamification

It’s Not All Fun in Gamification

In a recent overview of gamification technologies at Employee Benefit News, John Soat looked at the growing number of ways in which organizations are gamifying HR processes. Soat highlighted three areas in which gamification is most promising: pre-hire assessments for recruiting, training programs for current employees, and encouraging participation in wellbeing initiatives and other benefits programs. Game-like tools are popular and effective because they are fun and engaging, so employees are more likely to use them voluntarily, even outside working hours. This impact on engagement, Soat hears from vendors, is part of the often intangible ROI their clients see from gamification.

This is a trend we’ve been following both here at Talent Daily and in our research at CEB, now Gartner, for several years now. Looking at how various organizations have gamified their processes, we’ve discovered some surprising use cases for this approach and developed a robust understanding of what makes gamification initiatives most likely to succeed.

In the training space, it’s interesting to note that companies aren’t just using gamification for entry level or technical skills. In 2014, we profiled GE’s Experienced Leaders Challenge: a week-long, immersive development session for experienced GE leaders designed to help them develop a leadership mindset aligned to today’s inherently unpredictable business environment. A key part of the program is a simulation that lets leaders practice navigating common challenges and observe the unexpected consequences of their decisions or actions. (CEB Corporate Leadership Council members can check out the full case study here.)

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‘Seen But Not Noticed’: How Employee Monitoring Can Backfire

‘Seen But Not Noticed’: How Employee Monitoring Can Backfire

Michel Anteby, a professor at Boston University’s Questrom School of Business, and Curtis K. Chan of Boston College’s Carroll School of Management teamed up on a research project wherein they interviewed 89 Transportation Security Administration employees and their managers to learn more about how these employees responded to the camera surveillance systems that had been installed at their airport workplaces in 2011. The closed-circuit television cameras were motivated by complaints from travelers about their belongings getting lost or stolen during TSA screenings, the authors explained recently at the Harvard Business Review, so the managers “decided to install cameras to catch employees in the act of thieving, or to demonstrate to travelers that theft was not occurring by their employees’ hands at the checkpoints”:

But even if managers had intended for the monitoring efforts to protect employees from false accusations, the prevalent sentiment expressed by TSA employees was that managers were watching them to control them, making sure that every single, little thing that they did was exactly and precisely as planned. TSA officers expressed the sense of constantly being seen by higher-ups. … Officers used words like “Big Brother” and “spying” to articulate how managers were monitoring them, suggesting strongly that they really did not like the feeling of constantly being seen.

At the same time, however, officers expressed that even though they were constantly seen, they were almost never noticed.

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