Responding to Employees’ Online Comp Data

Experts Terry Pasteris and Mark Lipis have an answer, but first, the rest of their focal points for 2012 from yesterday’s Advisor. (Pasteris is president of TLMP Consulting Group and Lipis is owner of Lipis Consulting Inc.)

2012 Focal Points for Private Companies

Here’s what Lipis and Pasteris suggest you consider for 2012:

IRS’s continued focus on unreasonable compensation. The IRS under Section 162 can come in and say we think you are being paid too much, and demand a form of clawback if they see, for instance that the owners tend to zero out the corporation every year. IRS will want to know what the algorithm was.

Owners pay as false or de facto cap. This is a “nifty” way of limiting compensation; the owner pays himself or herself a low amount so no one gets more than that “false cap.”

Attract key contributors who will never be owners. How can you attract a top exec to a private company when owners won’t offer equity? First deal with problems, says Lipis. That might be owners who don’t want to dilute, or don’t want to expose their finances, or it might be family dynamics, that is issues around wives, ex-wives, etc etc. Whatever the issues are, you can’t ignore them, Lipis says.

Then consider the following options:

• Phantom stock—make-believe stock works
• Profit participation
• Profits interest. (This is only for LLCs, says Lipis. Not a lot of companies are doing this, but it may be attractive because it gives capitol gains treatment even though the recipient is not an actual owner.)
• Non‐voting stock
• GUS (Gain Upon Sale) Plan. This option gifves nothing an ongoing basis, but if the company is sold there’s a gain.

A few employees driving you nuts? You’re not alone. Learn how to tame the worst offenders—attend BLR’s new Managing and Motivating Difficult Employees: Conflict Resolution Tips for HR webinar April 11. Practical, field-tested approaches. Guaranteed. Get info here.

Responding to Employees’ Online Comp Data

Employees or managers will come to you with online information, using it to justify a pay raise.

Unfortunately, says Pasteris, the fact is you are not likely to change the employee’s mind, but you can try pointing out the problems with this sort of data:

• It’s typically self reported data which is generally unreliable and often overstated
• There’s no quality control
• Differences in job content and scope are not addressed
• Differences in company performance and financial status are not addressed
• Differences in individual performance are not addressed
• Geographical and industry differences are not taken into account
• Company philosophies are ignored (for example, one company may provide high pay and little else, while another provides adequate pay and a plethora of benefits and perks)

It’s also helpful to have your own data (and hope it supports your position), concludes Pasteris.

Of course, it’s fine for employees to have questions , but it seems there are always a few who step over the line and become “a pain.” And that can present challenges for even the most level-headed HR manager.

The toll negative employee behavior takes on an organization is more than you might think. Aside from the obvious blow to morale, dealing with problem employees takes time, costs money, and can even escalate into a costly lawsuit if issues are not resolved quickly.

While you can’t change employee personalities, to maintain order, boost productivity, and keep your employees motivated, it’s crucial to not only effectively manage conflict as it arises, but also to have a plan in place to prevent everyday disagreements from blowing up into full-blown arguments—or even physical violence.

Fortunately there’s timely help in the form of BLR’s new webinar—Managing and Motivating Difficult Employees: Conflict Resolution Tips for HR– April 11.In just 90 minutes, you’ll learn everything you need to know about dealing with your most difficult employees. Register today for this interactive webinar, and learn field-tested techniques for managing challenging situations.

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Participate in this interactive webinar, and you’ll learn:

• How to recognize what triggers conflict, including common examples of situations that could fuel workplace spats
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• How to address issues in a way that garners respect for your organization and gets to the root of employee problems
• Tools for remaining calm in the face of an angry employee
• How to correctly identify what conflicted employees are feeling — stressed, anxious, frustrated, or angry — and what they really want
• Effective problem-solving techniques that will help you create a positive environment where former adversaries leave the table with a mutual understanding
• The best way to rein in workers who are habitually unreasonable or difficult
• When termination may be your best option
• How to properly document conflict resolution efforts to help reduce your legal risks

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