Category Archives: Compensation

HR Announces – ‘We’re Out of Ideas’

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Recently the crew at FOT has been having some conversations about what’s new in HR.  It use to be all you had to do was show up at a HR conference and listen to someone from Zappos, Google, Sodexo, etc. to find out what were the latest and greatest happenings going on in HR!  But no more – it seems like HR is in a dead period of new ideas!  I blame the recession – why wouldn’t I – the ‘Great Recession’ gets blamed for everything – might as well take some HR heat!   Nobody at FOT could really come up with any ideas that were new.  But thankfully the good HR folks at Google came through one more idea, but I don’t how new it is…

From Quartz – Google admits those infamous brainteasers were completely useless for hiring:

“Google has admitted that the headscratching questions it once used to quiz job applicants (How many piano tuners are there in the entire world? Why are manhole covers round?) were utterly useless as a predictor of who will be a good employee.

“We found that brainteasers are a complete waste of time,” Laszlo Bock, senior vice president of people operations at Google, told the New York Times. “They don’t predict anything. They serve primarily to make the interviewer feel smart…

Bock says Google now relies on more quotidian means of interviewing prospective employees, such as standardizing interviews so that candidates can be assessed consistently, and “behavioral interviewing,” such as asking people to describe a time they solved a difficult problem. It’s also giving much less weight to college grade point averages and SAT scores.”

Yes, you are reading that correctly – Google’s ‘new’ HR idea is to go retro!  Back to behavioral interviewing and standardized interview decks – hello 90’s!  Isn’t that wonderful – I can’t believe Google didn’t have someone at SHRM 13 leading a session like “Google’s Strategic HR Innovations – Just Interview Them Stupid!”  HR ladies would have packed the house to find out how they to could jump into the 90’s.  Also, let’s just come right out corporately and validate to all those kids in college – you’re just wasting your time and spending your parents retirement.  I’ve really never been so excited for our industry!

So, I would like to take it upon myself and the entire HR community to let the world know – HR is out of ideas!

Here’s were we/HR stand:

– Still need to hire people

– Still need to train our employees

– Still need to provide benefits and pay administration

– Still planning the company picnic, and/or ‘holiday party

Long live HR.

The Reality About Salary Expectations

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I think we all know that one person in our life that thinks they get the best deal on everything!  They consider themselves the ultra-negotiator, the person sales people hate to see coming! You know the person -they go and buy a $40,000 car and call and tell you how they got it for $27,000 and the car dealership actually lost money on them.  These are the same people that believe they can also ‘negotiate’ their salary.  There are some realities we face as HR Pros that most employees don’t get.  While we have rules and processes and salary bands – quite honestly, very little negotiation goes into any salary offer.  Younger people are always told, usually by their Dad or some cheesy uncle, to “Negotiate” their salary – “Never take the first offer!”

To me there are 7 main realities about negotiating salaries, and here they are:

1. A good HR/Talent Pro will pre-close you one what you are expecting. This is truly the point where you should be negotiating – the first call. 99% of candidates miss this opportunity.  This is also where you can truly find out what the position pays by playing ‘the game’ – Go in super high and work backwards – you’ll eventually get to the ceiling.

2. Health Benefits, 401K match, holidays – are all non-negotiable, unless you’re negotiating a C-suite offer.

3. Vacation days are usually negotiable – but only if you’re coming in with experience – most entry levels have no room to negotiate this – and if you did negotiate, as an entry level, and get more vacation than they originally offered, calm down, they were willing to give this already – it was a test.

4.  In most positions you have a 10% range within a position to negotiate salary for an experienced professional – they offer $60K – you can probably get $65K without much hassle.

4a. There are 2 schools of thought on this:

A. The fewer the people in a position the easier it is to negotiate salary – the theory being we can hire Tim at $65K, we have  Jill is already hired and working at $60K – but it will only cost us $5K to move her up to that same level – everyone’s happy.

B. The more people in a certain position the harder it becomes to negotiate because the example above, pay inequity now becomes very expensive, and ‘pay creep’ is more of a concern when you have 200 people in a position vs. 2.

5. You can raise your salary up quickly by moving around early in your career and jumping from company to company – but it won’t help you move ‘up’ in your career.  Congratulations you’re making $95K as an Engineer – but you won’t be the first choice to a manager or director position – that will go to the person who has been there for 8 years while you were working for 4 different companies.

6.  HR/Talent Pros (the good ones) expect you will negotiate something – they usually are holding something back to help seal the deal.  If you don’t negotiate, you missed out an opportunity to get something – and that will follow you as long as you are with that company.  The $5K you left on the table initially, compounds each year like bank interest – if you’re with the company 20 years – that one little $5K negotiation will cost you $100K+.

7. The best HR/Talent Pros will tell you up front if they have don’t have room to negotiate – very rarely are they lying.

Share some of your salary negotiation stories in the comments below.

Do you value new employees over old?

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Here’s a quick way to check!

When an old employee comes to you and says, “Hey, I really like working here but I’m hearing from folks that I can make like $10-15-20K more doing the same thing at the company across the street.”  And you go, “Well, you know, we love you and you’re doing great work, but we just can’t afford to pay you that much more. Sorry.  Let me see what I can do for you – I need to talk to HR.”

Your supervisor then goes to HR.  She tells HR what you said.  HR might actually know that your competition is indeed paying that much more – but the budgets are done – we didn’t figure in 20-20% pay increases.  Let’s first go back and try and give them $3,000, bringing their total to $75,000, and again tell the employee how valuable they are to us and how much we need them on ‘our’ team.  Sound like a plan?  Sound like you’ve had this conversation before? I have.

So, the supervisor does it – gives them employee $3,000 and waits and hopes the employee will take it and not actually go out and look.  Here’s the problem.  The $3,000 increase you just gave them – probably was the straw that actually broke the camels back!  Now, for sure they’ll look.

Let’s fast forward a month down the road.  Same employee comes into the supervisor’s office and turns in 2 week notice.  They got their offer for $20K more than you were originally paying them, they are now at $95K – they gave you a chance – you blew it.

Fast forward two months down the road.  You’ve posted the position, did interviews and now want to make an offer to the replacement.  The replacement wants $95K.  You go to the hiring manager and tell them the budget only has $75K in it.  The hiring manager comes back and says they have no choice, we have to pay $95K…

You value new employees over old employees.

 

Direct Deposit Has Killed Compensation Motivation

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Do you open your birthday cards and simultaneously do the “money grab”/catch, knowing-wanting something to fall out of your card?  Or do you play it cool and let it fall to the ground, acting like you didn’t expect it!?  That’s what I trained my kids to do – and act really surprised at the same time.

Seriously!? Don’t lie.  You do it.  How do I know you do it?  Because everyone does it!

There’s something emotional about opening a birthday card and finding money or a gift card in the card.  When there isn’t something in there, you almost feel the need to explain to the person – “oh sorry, we didn’t have time, here’s $20!”

One of the great traditional HRish things we use to get to do was to hand out paychecks on payday!  Don’t worry kids, ask someone over 30 to explain it to you.  It was a piece of paper you carried into a bank and would sign the back of this piece of paper and the bank would give you money! Yeah!  Anyway, direct deposit, paycards, etc. have almost completely killed paychecks and the need to go around on payday and hand deliver them to your employees.  That’s right kids – you had to meet face to face every other week with real employees! Sounds crazy, uh?

Paycheck delivery did a number of very motivating things, that in our rush to be ‘more efficient’ we have lost:

1. Payday euphoria!  Every payday when checks were being handed out you could almost feel the energy building in the organization.  Your boss or someone in HR/Payroll would walk around and hand out check, make small talk, give words of praise – “Have a great weekend!”, “Don’t spend it all in one place!”, or my personal favorite – “Can I have a loan?”

2. Leadership connections.  It really forced a ton of leaders to go out and deliver the ‘pay’ for the week.  Which really put them in a situation to have to say something nice to each employee! Crazy how motivating that is for employees after a long week!

3. A trophy for everyone.  When you got that paycheck in your hand, you felt like you accomplished something.  Here’s what I did all that work for.  I can look at it, I can see it, I can smell the ink! (don’t judge, I was born in the 70’s)

There is a definite emotional and some would say, physical, response to being handed a week or two’s worth of pay.  For most people, it feels good.  It feels like accomplishment.

Direct deposit takes that all a way.  On Friday afternoon, you don’t get a visit from your boss or HR. You don’t get to know your local banking people and get fresh new bills and those little money envelops from the teller and DumDum sucker for the kids.   Direct Deposit, while great in its efficiencies, has effectively killed one of life’s great joys.  Cashing your paycheck.

So, what do you think HR Pros – would you ever go back to handing out physical paychecks each week?

 

 

Do You Offer Unique Employment Experiences?

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It is said that:

“Experiences are the new Luxury goods.”

Think about what people are paying for –

  • Navy Seal inspired Bootcamp
  • Tough Mudder
  • Marathons
  • Haunted House Vacations
  • Survival Vacations
  • The Death Race
  • To be challenged mentally and physically beyond anything they have ever experienced!

We are spending our free time and our hard earned money, not on relaxation, but on experiences that we will never have or find in our daily life.  Experiences that make us feel good about ourselves – doing things we thought we would never be able to do.

Why?

You could go out and buy yourself a new Rolex for $5,000 or you could backpack across the desert over two weeks in brutal conditions.  Which one would you remember most?  Which one would you talk about more? Which one would make you most proud of yourself?  Experiences are the new Luxury goods.

I’ve thought about this recently in terms to employee engagement and loyalty.   In my company we have had a Sales Retreat a number of times in our history.  We don’t have one each year, but we’ve had a number of them in our history.  It’s part education, part team building, part motivation, part party.  Everyone of them offers a great ’employment’ experience and they are talked about often, months and years later.  During these retreats – no sales happen, no recruiting happens, our normal daily work stops.  Yet, these are the experiences my team remembers most.  Same with the chili cook-offs, the football tailgates, the Friday after-work happy hours.  We laugh, we share, we learn more about each other than we knew before.

My recruiters also get to travel to client sites – some are close, within driving distance – some they have to fly to.  All of them love going to meet with clients at their locations, seeing their operations, meeting the people face-to-face.  Maybe not totally ‘unique’ – but different from their daily tasks for sure.  This doesn’t happen weekly, maybe not even monthly – but they all get to get out from time to time.

I’m wondering how often do you give your employees unique experiences?  It doesn’t have to trips or picnics.  It can be something that fits right into your daily operations and your employees development plans.  These experiences can all be tied right to the betterment of your business.  Think about that up and coming leader who just isn’t that well known.  How hard would it be to have that person co-present at your next department meeting or even at a board meeting!  While that might not ‘challenge’ you – it might challenge the heck out of them!  What about having your HR Director go on a sales call with your VP of Sales?  And not just sit there, but have one portion of the sales presentation they have to answer to!

Unique experiences challenge people.  They challenge people to sharpen their saw, to get out of their comfort zone and stay engaged with your business.  It’s something money or extra benefits can’t touch.  Unique experiences are priceless.  They don’t cost of anything, yet it’s one of the most valuable things we have to offer.  Great leaders and great HR Pros can make these experiences happen.  It doesn’t have to be a crazy position description or job design, it just has to be different from what the person normally does.  An average day for one of your operations leaders, could be a crazy day for one of your marketing associates, and vice verse.

 

Na-na Na-na Boo Boo, I’m Better Than You!

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Quick question:  Would you rather have $50,000 salary or $100,000 salary?  (Same job – no strings)

$100,000, every single time.

File this under why we are all very stupid – From Fast Company:

A few years ago, students at Harvard University were asked to make a seemingly straightforward choice: Which would they prefer, a job where they made $50,000 a year (option A) or one where they made $100,000 a year (option B)?

Seems like a no-brainer, right? But there was one catch. In option A, the students would get paid twice as much as others, who would only get $25,000. In option B, they would get paid half as much as others, who would get $200,000.

What did the majority of people choose?

Option A. They preferred to do better than others, even if it meant getting less for themselves. They chose the option that was worse in absolute terms but better in relative terms.

We (yes – all of us) are so stupid that we will logically decide to make less money for the simple fact that it would be more than those working with us versus making more but making less that others!?  Compensation Managers take note!   Social Comparison Theory is very real.  If we think we are better off than others, we feel better about ourselves.  If we feel worse off than others, we feel worse.  Even if the reality is that we are better!  We compare our own self by those who are around us, doing similar things.  It’s one reason why your employees get so upset when they feel like they are paid less than someone else doing the same job – even though that other person might have more experience, more education, higher performance, etc.  “I’m going the same job – I should make the same!”

The awesome part of this, is that it’s totally adaptable to HR programs and doing what we do better.  Think about your dying referral program.  You launched it – had a really cool new poster in the break room – spent weeks crafty catchy communications to go along with your very creative theme “Here We Grow Again!” – it was going to solve all of your recruiting problems – 6 weeks later it was dead – no referrals.  One way to engage the concept of social comparison in a work environment is through gamification.  Weather you like it or not, competition within your work environment will deliver more results, almost always in the short-term.  Put up a scoreboard – and people will work to get their name up on it! Or their department, their function, etc.  Individual or team – both work.

If you have a monthly contest on which department refers the most candidates that month – and you’re showing it visually and communicating it often – Accounting will want to be beat Marketing! And, Marketing will want to be Operations, and the end result will be more referrals.  The key to gamification is keeping the game fresh.  Having a new game each week, month, period, etc. is key to giving everyone another shot at winning, and keep them motivated to play the game.  It’s not about the prize – it’s about the friendly competition and having fun with your competitions in your work environment.  It’s also about kicking their peer’s butts!  Sound like a lot of work? It might be to get started – but it’s more work to recruit talent on your own – then creating a great referral program and having your staff do the heavy lifting for you!

 

Do you allow smoke breaks?

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Let’s break down the anatomy of a Smoke Break:

Step 1: Gathering of smoke related materials to go on break (20-30 seconds)

Step 2: Decision to go on break commando, or alert smoke friend you’re going on break (10-45 seconds)

Step 3: Travel time to proper Smoke Break destination (1-2 minutes)

Step 4: Consuming cancer stick (3-4 minutes) – which includes conversation with cancer buddies

Step 5: Travel time back to work area (1-2 minutes)

Step 6: Settling back in to get on task (1 -2 minutes)

Total estimated Smoke Break time: 10 minutes

Multiply Smoke Break time by 6 = 1 hour per day for Smoking, that you’re paying for. 5 hours per week. Let’s say 49 weeks per year.  Average wage $20/hr = $4,900 you are paying someone in your environment to Smoke.  (FYI – this does not include the cost of your insurance going up as well for poor health)

Just so we are clear – I add this into our Total Compensation Statements for our Smokers!   It’s a great benefit – I list it under “Recess”.

So, not to make my non-smoking employees upset by this total disregard for company resources – I let each non-smoking employee have an hour of ‘recess’ each day!  What is ‘recess’ – it’s when you see Janie over by someones cube talking about Dancing with Stars for 20 minutes – that’s 20 minutes of ‘recess’!  Now, if Janie is a smoker – and she’s taking ‘recess’ on top of her smoking break – Janie gets fired.  Janie is using her ‘recess’ to smoke – she doesn’t get additional ‘recess’.

Sounds crazy right?

Here’s what I know – every single one of your non-smoking employees – looks at this situation, exactly like I describe it above – but maybe in less colorful terms.  “Why does Janie get to take an hour of her day off to smoke, and get paid, while I continue to sit here an work?”  Why do we as leaders and HR Pros allow this to happen?  We don’t legally have to allow people to take a smoking break – heck – we can fire them for taking a smoking break. Would you allow an employee to take an hour out of their day to play with a loaded gun in the parking lot?  Why not?  What’s the difference?

As a leader and HR Pro I know smoking is bad.  I know it costs me the health of my employees, increases in health insurances and that my non-smoking employees hate that I allow this.  So, why do I allow it?  You’re going to love this answer!  Because – ‘we always have’.  That’s why.  And it’s stupid.

So, do you allow Smoke Breaks? Why? (and please don’t comment about ‘life choices’)

 

Don’t Ask Me To Take Less Money!

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I love pro sports – football, basketball, baseball – it doesn’t matter, I love watching the best athletes in the world compete against each other.  I also love watching college sports – but for a different reason.  Pro sports and college sports are different.  One is a business of entertainment and one is competition.  While their is an element of competition in pro sports – the bottom line business proposition is still to entertain.  99% of college sport athletes will never go on to become pro sport athletes and get paid for playing the game they love.  They play for a number of reasons, the biggest one is that they love playing the game and they love the competition.  Some pro sports athletes also do this – but if they weren’t being paid, most would not be putting their bodies through the punishment they do. Still, there talent is awesome and it’s why we pay big bucks to see them ‘perform’.

That is why I love the Tom Brady story.  An all-pro NFL quarterback who takes less money then he could get on the open market, so his ‘team’ can go out and get better talent for him to play with and possibly compete for future Super Bowls.  Great pro athlete story.  Here’s the breakdown from the NY Times:

“Brady took a deal that will pay him well below the market rate for a quarterback of his caliber at a time when the Patriots and every other team are struggling to manage against a salary cap that is expected to remain nearly flat for several years.

Brady is now under contract through the 2017 season, when he will be 40. But the contract will pay him just $27 million, far below the annual $20 million that is the current average for the game’s top quarterbacks. The terms of the contract were first reported by Sports Illustrated.

Brady also took a below-market deal in 2005, with the thought that he wanted to give the Patriots the chance to sign and keep other players. That is what drove his decision-making this time, too.”

I love when guys from the teams I root for do this because of all the reasons Brady is doing this.  When anyone turns down millions of dollars to make your organization better – that means something! But, this doesn’t make it right for everyone!

Let’s face some facts.  Brady has more money then he’ll ever need, a super-rich wife and incredible earning power after sports in the broadcast booth.  He can take the pay cut and not flinch.  The problem with these kinds of stories is that companies believe you should be willing to do the same thing.  “Hey Tim, we need you to take a $10K cut to help us out through this rough patch we’re facing.”  Um, No!  I’m not Tom Brady – and I’m guessing you aren’t either – pay cuts in ‘real’ life, don’t work.  Yet, we see organizations, even our own government, trying to do this.  It’s a disaster.   Don’t get me wrong – I understand why organizations do this.  If the alternative is to go out of business – I’m going to offer up some pay cuts.  The reality, though, is this a downward spiral of doom – 99.9% of organizations that force pay cuts don’t make it.

They don’t make it because the good people, the real talent, bail as fast as possible.  Leaving you less talented, under paid, desperate employees – that is not a recipe for success.  So, what can you do?  Do more with less.  Don’t cut everyone – just eliminate the lowest performers and keep the pay at where it should be.  People are willing to pick up more if they feel like it truly is going to make a difference. Cutting pay, across the board, only demotivates the entire staff, further compounding your problem of survival.  As an HR Pro don’t allow yourself to be pulled into this leadership trap – it won’t work.

I Love Work From Home

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Now that everyone has calmed down about Yahoo pulling their ‘Work From Home’ program and making those Yahoos working from home come back to the barn – I wanted to comment.

“I LOVE Work From Home.”

You can quote me on this.  I know, I know – all you big business, strategic HR types have come out and given us WFHers a real ear full.  Good for you strategic HR pros!  It only took you the last 10 years and a Great Recession to figure out you better get on the business side of things and jump off the sinking employee boat!  Well played.  Screw work-life balance – nobody wants to support those kinds of crazy programs!  We’re HR Business partners – not HR Employee partners.

I love WFH – my wife works from home.  And what they say about WFH employees is exactly correct – she faces communications challenges every single day.  She doesn’t get the respect or appreciation that non-WFH employees get.  Getting people to understand the amount of work you do, is almost impossible.  Everyone wants to change positions with her, believing It is easy.  Everyday is a struggle, but at the same time a blessing.

You see – my wife is a stay at home mother.  She is raising 3 smart and well adjusted boys to go out into the world.  Boys don’t communicate very well – it’s a challenge she faces everyday. Children have a hard appreciating all that their mother does for them, and her husband doesn’t appreciate her enough.  It’s hard – financially.  We don’t have brand new cars.  We don’t have a 2nd lake house. We don’t go on Disney Cruise vacations.  We are saving for 3 college educations, while at the same time attempting to give our kids all ‘those things we never had’.   Our WFH arrangement is the best decision we have ever made.

I’m envious many days of my wife’s WFH job.  While it’s a job I could not do successfully – she gets to see some of the most wonderful moments of my kids lives. Things I will never get to see.  She has a relationship with my children, I’ll never have.  She has sacrificed most of her career and professionalism to raise 3 young men.   We are winning.

I hear you – a Stay At Home Mom is not the same as the WFH Yahoos.  You’re right – instead of Yahoo paying for my wife to “WFH”, I’m paying her.  I’m not asking a corporation to pay my wife a full-time salary to raise my family.  The fact of the matter is organizations who are failing, like Yahoo, can’t sustain paying employees to work at home and raise their family. Raising your family isn’t a part-time job, so who’s getting the short end of the stick – Yahoo or your kids?  “Well, I don’t have a family and I was a WFH Yahoo Employee.”  Good for you – but it begs the question – if you didn’t have to be at home to raise a family or take care of a loved one, etc. why were you working from home to begin with?

Regardless – I love my Work From Home arrangement – I wish more people would find a way to do it.

Why Hasn’t Paying Employees To Leave Caught On?

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Remember a few years back when Zappos, the darling of the HR world, announced it was offering new employees $1000 on their 90 day anniversary to Leave the company?  At the time that’s all HR people talked about – it was revolutionary – pretty soon every company would be paying their employees to leave.  What happened to that?  Zappos is still offering to pay employees to leave.  Is your company? Why not?

It hasn’t caught on because your leadership is afraid your good hires would actually take you up on your offer!

Of all the HR gimmicks Zappos does, offering employees at bonus at 90 days is the best one – because it puts everything on the table.  It’s the one thing they did that other companies are too afraid to steal!   When you go to an employee and say we need you to be all in – so – if you can’t be all in, here’s $1000 bill, all you have to do is leave.  That’s having true faith in your organization, your culture.  We only want people to work here – that really want to be here.  Many of say it, but 99.9% aren’t willing to back it up with an offer.

It hasn’t caught on, because your HR team is too weak!

Think about the HR person who takes that idea to the executive conference room.  They’re either really good at what they do, or crazy.  Because most leadership teams are not going to buy in on the initial idea.  To get an idea like that approved, you have to have executive buy in, in a major way.  You have to be able to sell it.  That person is not your average HR person. That’s an HR person willing to do thing different, willing to put their beliefs on the line.  Those kind of HR folks are the ones who get the corporate logo tattooed on their ass – and don’t even tell you about it.

It hasn’t caught on because the recession put people 2nd and business 1st. (Remember when your employees were 1st!)

In a down economy the importance of your workforce has taken a back seat.  It has.  Leadership and management training was almost non-existent, retention programs disappeared and work-life balance turned into get-your-ass-back-to-work balance.  That’s simple economics.  When your pool of labor far outreaches your needs, the employer holds more of the power.  This makes the exercise of giving people money to leave, seem a little silly.  First, people aren’t leaving because they have no where else to go. Second, if someone sucks, I’m getting rid of them because I have 100 others waiting to take their spot.

HR Pros discount this policy.  They say it’s meaningless. It wouldn’t make a difference in their environment.  They have a performance management process that gets rid of ‘those’ kinds of employees. The fact is, we are scared.  We are scared to go and do this because we know the truth.  That it would cause turnover, that would cause our systems and processes to be taxed.  We don’t have the resources to handle it.  We don’t have the leadership to handle it.  We don’t have the guts to try it.

It’s the single most brilliant thing that Zappos has done in the HR space, and you’re not doing it.