The Bait

Compensation is a vital instrument used by company management to advance business needs, goals and missions, and the workforce of an organization. Compensation is directly tied to various HR programs, including:

  • Recruitment, Retention, and Employee Relocation;
  • Performance Appraisals;
  • Training;
  • Career Development and Advancement;
  • Labor Relations;
  • Employee Terminations; and,
  • Compliance and Legislation

Recruitment, retention, and employee relocation incentives are oftentimes offered to current and newly-hired employees in situations where the benefits of offering some form of incentive (sign-on bonus, higher pay, etc.) outweigh the difficulties that may arise from losing or missing out on great people. These forms of incentives may be offered when recruiting for top talent/quality employees, retention of the organization’s best people, as well as the need to offer employee relocation assistance as needed.

Many organizations utilize performance appraisals as a tool to administer merit (performance) pay programs. For merit pay programs to be successful, performance appraisals must be accurate, employees must know that their efforts toward meeting goals are directly tied to merit pay increases, and the program administrator (HR, Managers, Supervisors, etc.) must have the ability to successfully design, implement, and most importantly, communicate their merit pay program.

Knowledge-based pay is a compensation system used to reward employees for setting goals, learning new skills, and acquiring new knowledge. Successful pay-for-knowledge plans directly relate to an organization’s ability to develop and implement organized training programs. When training is methodical, employees are able to learn the skills needed to increase their pay and train other employees. In organizations that implement pay-for-knowledge plans, oftentimes training becomes necessary rather than optional. In order for organizations to successfully implement this type of compensation system, employees must have access to the training, tools and resources needed to acquire the advanced skills and knowledge.

Through work experience, training, and/or education, an employee’s career may develop laterally or horizontally within an organization’s hierarchy. If an organization utilizes the traditional job-based pay structure, as an employee’s career develops and advances, his or her compensation will likely adjust to reflect shifting or increased responsibilities.

A collective bargaining agreement, negotiated between an organization’s executive team and the union, is used to outline the terms of employment, such as pay and work hours, specific to union employees. Throughout the collective bargaining agreement, compensation is often a key theme. Historically, unions have advocated for steady pay increases, COLAs, and seniority pay systems. Unions have more recently started to consider incentive-based pay systems that serve the interests of both employees and employers.

Two areas where compensation is closely tied to employee terminations are layoffs and retirement. In the case of involuntary layoffs, organizations have the option to provide severance pay, which is typically calculated based on years of service or position within a company and provides a number of months’ pay following the layoff.

Some organizations implement early retirement programs to reduce staff size and cut compensation costs. Early retirement programs provide incentives to encourage certain employees to retire earlier than planned. These types of incentives expedite senior employees’ retirement eligibility and offer increased retirement income. Some companies also provide continued medical benefits through their early retirement programs.

Compensation is tied to multiple employment laws, which establish boundaries for both acceptable employment practices and worker rights. Federal laws that apply to compensation practices are commonly tied to: income continuity, safety and work hours, pay discrimination, disability and family needs accommodations, and prevailing wage laws.

To learn more about compensation practices or how compensation strategically fits into your HR department, please contact us!

Next month on Cascade’s Compensation Toolkit: Compensation and Compliance

Check back next month to learn about major laws that influence compensation practices and the ripple affect they may have on your organization.

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Leadership Development Center OCS instructors help train MSST Boston personnel.

Your thought: “Oh no, that will never work! And I’m not the only one who knows that. And my boss expects us to put this into action now. I bet I get the blame if it fails.”

Some top managers ask for your input and have good judgment, making these situations rare. Some are visionaries who don’t know what will work in practice. Some are dictators who see your disagreement as disloyalty. When you anticipate lots of problems implementing what the boss wants, no wonder you’re nervous.

It’s an awkward feeling when you have to tell others to do something that you believe is unwise. Step One is overcoming your initial fight-flight stress reaction and Step Two is thinking what matters to whom. Assuming your goals are to 1) be sincere, 2) be positive and 3) get everyone to do their best, the following ABC’s can help:

Anticipate: Think about what could go wrong and what could go right and the odds of each. Determine ways to overcome obstacles, get buy-in and make the change successful. Consider how employees or other stakeholders might resist and what they need to respond positively over time.

Before: If you see a high risk of problems, ask for your boss’s or other expert help to see the best path forward. If you usually are supportive and committed, sharing your concerns and alternative ways to make progress will be seen as trying to help. Be sure not to make the discussion competitive (a contest of wills) or to embarrass your boss publicly or privately. Private grumbles are often seen as more negative than you intend.

Communicate constructively: If you want support from employees, don’t ask for blind conformity. Explain why you are concerned and discuss issues. Resistance is normal, especially for those who lack vision and confidence, but if heard sympathetically, is commonly temporary. Stifling dissent rarely works while rational, supportive problem solving does. People need a chance to get accustomed to uncomfortable ideas and to figure out how to make them work.

The worst mistake insecure leads and managers make is to blame others. “The boss is clueless.” “Employees aren’t open to change.” “Our suppliers can’t be trusted.”

Blame, like pessimism, undermines collaboration. Realistic optimism may see failure as a possibility but only as a pothole in the road. Keeping good relationships up and down the hierarchy, between departments and with others whose support is valuable, is critical to long-term success.

Part of anyone’s job is making both their boss look good and their organization succeed. Even when there are major barriers to face, your best efforts to build unity will be remembered.

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Heart for you

As February is the month of love, let’s talk a bit about doing what you love and loving what you do!

Considering that most of us spend more than 2000 hours per year at our jobs, it would be great if we loved what we did. “Doing what you love” is typically at the heart of those who choose to work for nonprofit organizations. Nonprofit employees have chosen a rewarding path, putting all their efforts into helping others, supporting a mission, and above all making a difference. Because nonprofits oftentimes are constrained by limited financial resources, employee salaries are typically lower than average compared to what you might find in the general industry. That being said, nonprofits are still a business and need to attract and retain top talent.

During a time when recruitment and retention has never been more important, ensuring that pay and benefit levels are appropriate is crucial! Because we at Cascade understand how important nonprofit work is, we want to help make a difference.

Due to the demand for quality, reliable pay and benefit data in the world of nonprofits, it is our pleasure to introduce the very first annual Non-Profit Pay & Benefits Survey. Our survey includes over 250 jobs and over 100 benefit/practice related questions.

Don’t miss out on this important opportunity and participate now! To learn more, click here. If you have additional questions, or would like to participate, contact Courtney LeCompte at clecompte@cascadeemployers.com or at 503.585.4320.

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Willamette Valley Pie Company

This Cascade member’s story starts with about 30 local farm families, who grow the fruit for their all-natural handmade pies, cobblers and frozen fruit packs. Did you know…

  1. In 1999, after growing berries locally for three generations, Gerald Roth and his family started a small frozen fruit processing operation in a backyard warehouse just outside of Salem, Oregon, soon becoming a Northwest leader in frozen berry processing. In 2001, with the goal of vertically integrating their business, the Roths jumped at the chance to acquire LaSuisse Pie Company from a neighbor down the road, also adding traditional cake batter cobblers and frozen fruit polybags to their retail product offering.
  2. The company buys 3 million pounds of fruit from local farm families every year, and that number is growing. The fruit includes strawberries, raspberries, boysenberries, blueberries, blackberries, cranberries and the local favorite, Marionberries.
  3. Each day, about 70 bakery employees make thousands of pies, cobblers, pastries, and other treats by hand in their new 47,000-square-foot production facility located in Silverton, Oregon. Leading up to Thanksgiving this last fall, employees made 2200 pies in one eight-hour shift.
  4. The company primarily distributes to grocery stores on the West Coast, including Roth’s, Whole Foods, New Seasons, Market of Choice, Zupan’s and many others. They also operate a popular retail farm store located 5 miles northeast of Salem, where customers can purchase frozen fruits, or enjoy a fresh-baked slice of pie all year long.
  5. In the last 12 months, Willamette Valley Pie Company has begun moving into the Midwest and East Coast markets, increasing sales, efficiency, and the amount of fruit purchased from their growers.

Cascade is proud to feature Willamette Valley Pie Company, a member who is passionate about supporting local farm families and delivering the best, all-natural fruit products to their customers.

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