18 Questions for Comp Managers in 2013

Here are the questions Neelman asks clients to help them complete their planning for 2013. Neelman is a principal and senior consultant with Compensation Resources, Inc. in Upper Saddle River, New Jersey.

• Who are your best employees?
• Which employees truly impact your success?
• What employees can you least afford to lose?
• What are your strategies for retaining them? (including non-compensation rewards such as training, opportunities for growth)
• Is your compensation program correct?
• Is your mix and amount appropriate?
• When did you last benchmark compensation?
• Are pay levels reflective of your marketplace?
• Do your structures need updating or rebuilding?
• Do we need different structures for different groups?
• Are you getting the biggest bang for your buck?
• Are you looking beyond compensation to total rewards, work-life balance, training, opportunities, etc.?
• Are you being creative with fewer resources?
• Can you accurately evaluate performance?
• Can you differentiate compensation based on performance?
• Have you linked performance and pay?
• Do you have the right tools to accurately evaluate performance?
• Can you define quantitative goals and objectives? (Are goals necessary for every employee?)
• Can you measure achievement of goals?
• Does the compensation program effectively tie results to pay actions?
• Does it empower employees?
• Are you beginning to eliminate an entitlement mentality?
• Have you adequately communicated concerning your plan?

As you go, Neelman says, be sure to avoid mixed messages!  For example, when you say, “You’re not doing a good job but here’s a 3% merit increase,” that’s a mixed message.

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Strategic Compensation Toolbox

Create a compensation “toolbox” for motivating employees, Neelman says.

• Identify various programs that will motivate employees to perform at their peak: spot, annual, project reward.
• Remember that not all elements will apply to all employees.
• Design plans so that they achieve their intended goals.
• Ensure that performance metrics are viable.
• Make sure you can track performance.
• Remember to keep communication lines open.

Why Pay for Performance?

Neelman says her clients ask, Since it complicates things, why do pay for performance? She responds that with pay for performance:

• Employees realize job satisfaction, a sense of empowerment, pride, and intrinsic motivation.
• Employees see a direct influence on rewards, especially when you reward employees who can drive future growth.
• Employees remember how they are treated.

Focus on how your pay-for-performance program can aid in keeping your best and brightest employees. You can’t afford to lose your stars, she says.

Getting comp organized for 2013 is going to be a challenge for any organization, and wage/hour compliance is surely going to be on your to-do list. Everyone thinks wage/hour should be simple, but it’s just not. Complying with the Fair Labor Standards Act (FLSA) is one of the most confusing and challenging things comp managers have to do.

Even the most savvy practitioners get tripped up, and the law’s complex requirements can easily land you and your company on the wrong side of a lawsuit or DOL investigation.

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Wage & Hour Compliance: Practical Solutions for HR features:

• Real-world examples of wage and hour challenges, and how to solve them
• Multiple quizzes, so you can see where you need to review more carefully
• An overtime exemption audit checklist, so you never make the wrong call
• State-specific charts, for comparing your multistate obligations
• Sample policies, easily modified to fit your specific preferences
• A quarterly newsletter, Wage & Hour Compliance Bulletin, to keep you aware of the latest developments in the law, and why they matter to you

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Why are aggressive attorneys so eager to file claims on behalf of employees? Because there’s so much money to be made:

• $4.75 million: Hospital in Thousand Oaks, California, settles wage and hour lawsuit over miscalculated overtime pay and failing to compensate workers for missed meal and rest periods.
• $1.15 million: Las Vegas construction company to pay in back wages to 1,060 current and former employees.
• $976,327: New Mexico aerospace company settles with 900 employees who were routinely required to work through lunch breaks without compensation.
• $340,400: New Jersey convenience store to pay back wages and damages for violations of overtime and recordkeeping.
• $84,541: New York physical therapist agrees to pay 22 employees for minimum wage violations.
• $30,000: Texas chain of four gas stations to pay their six hourly employees, again for recordkeeping and overtime violations.

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