Compensation and Benefits

If you’re wondering whether or not the employee - employer relationship is affected by all of our country’s economic woes, the answer is yes.  OMG YES!

The answer is rooted in Maslow’s classic theory. You probably remember it - Maslow’s hierarchy of needs. He said that every person has needs and for us to achieve a higher need (for example, personal growth) we must first take care of a basic need (i.e. safety and security).  Now, translate this into our everyday jobs.  For me to focus on making sales and servicing customers, I need some of the basics handled like getting paid on time and having adequate benefits.

At this point, some people might be saying, “Shouldn’t my employees just be lucky they have a job?” “How is the company supposed to provide more than it already is?”  There are things companies can do to show their employees they care and are sensitive to the challenges of today’s economy…without it costing extra.

Do tell, you say?  Here are two things you can do:

1. Make sure your health care coverage addresses employee’s needs. I once worked for a company that only offered an indemnity plan.  Why?  Because the owners wanted an indemnity plan, of course.  They couldn’t fathom that any employee would want an HMO or a POS plan.  It was only when they were faced with a huge premium increase that HR was allowed to explore options.  The result:  they offered two plans.  90% of the employees switched to the HMO, saving the company and the employees over 15% in premiums.
2. Align recognition programs with corporate culture. (Another true story).  A company gave employees service pins and awards from Tiffany & Co.  They were really beautiful.  But, the average hourly pay of a company employee was $8.50.  So what did the employees do with their recognition?  They took it to the pawn shop for cash, of course.

When budgets are tight (and even when they aren’t), make sure your benefits and recognition are what your employees want/need.  Talk with your employees.  Share options.  Find out what they want.  Every dollar spent should get the desired bang for the buck.  Your employees will thank you for it.

Poverty is defined as the “deprivation of common necessities that determine the quality of life, including food, clothing, shelter and safe drinking water, and may also include the deprivation of opportunities to learn, to obtain better employment to escape poverty, and/or to enjoy the respect of fellow citizens.”

A couple days ago, I was reading Punk Rock HR Laurie Ruettimann’s comments to a Yahoo Finance piece titled “10 Reasons You Aren’t Rich” so I clicked over to read the article.  While some of the author’s points may have merit, I can’t help but wonder about the timing.  Our country is faced with a history-making financial crisis and the article implies that people aren’t rich because they drive a nice car.

The reality is that poverty is on the increase because the prices of everyday items like food and energy are going up and wages are not increasing at an equal pace.  In addition, the credit crunch is not allowing companies to grow and expand their businesses.  So commerce is stalled, which means that employee growth is stagnant while the cost of everything around us continues to rise.

Here’s a real example.  Let’s say I’m a room attendant at a hotel.  I make $10 hour ($20,800 annually).  I’m divorced and have two kids.  According to the government, poverty is $17,600.  So this chart implies that, according to the government, I’m not poor and that I don’t need financial assistance.

But the fact of the matter is, after I pay Uncle Sam, I probably don’t have enough money for health insurance.  And, I certainly don’t have enough money for a fancy car or a 401(k) plan for that matter.

Business owners need to realize the odds are great that at least one of their employees is living under or close to the poverty level.

It’s time to get our heads out of the sand.

We all know it’s important to have good customer service.  Regardless of our country’s economic condition, people want to purchase products or services from companies that provide value.   Good customer service brings value.

And how often do we forget about good customer service with our employees?  Yes, employees are customers.  They choose to work for you and make a conscious decision every day to represent your company well or fling your reputation into the toilet.

A recent post by HR Minion on how HR needs to provide good customer service was spot on.  It mentioned a point that I want to emphasize…if you want your employees to leave their personal problems at the door and focus on doing their job, you need to give them the resources to do that.  Here are 4 things you can do to help your employees focus on your business.

1. Have a solid orientation program. Tell employees about the mission of your company and show them how what they do contributes to the success of the organization.  Employees will perform well when they have pride in what they do.  Pride comes from understanding how everyone’s role translates into company success.
2. Conduct department training. Teach employees how to do their jobs.  Whether it’s a formalized program or on-the-job training, have a process for letting your team know what is expected of them.  Oh and, make sure they can actually perform the job to company standard before you turn them loose.
3. Offer benefits and market them. Yes, market them!  Employee benefits give people an opportunity to focus on themselves - whether it’s their health, time off, education, or whatever.  It gives people resources they need outside of work so they can come back to the office and focus on their work.  And since everyone’s needs are different, be sure to promote all of your company benefits so your employees will utilize all the good things they have coming to them.
4. Communicate and follow-up with employees. When questions and concerns occur (and they will), listen to your employees and follow-up with answers.  I’m not saying that you have to always give people the answer they want to hear…but give them an answer.  After all, they deserve it.

As managers, if we follow the simple mantra of telling people what it takes to be successful, then showing them how to be successful, and removing any detractors…our employees will be well positioned to make good things happen for us.  And that’s what you want, isn’t it?

Over the years, I’ve had a lot of offices.  Some of them nice and others, not so much.  The biggest office I had was my first and the smallest was when I was a VP.  Go figure.

But the nicest office I’ve ever had was when I first started my consulting business.  My home office was the perfect size and had great equipment - like two computer monitors.  (If you don’t have two monitors, try it sometime…you’ll never use a single monitor again.)  Anywho, I digress.

The reason I bring up home offices is because more companies/employees are considering telecommuting as an option.  It can help create greater work/life balance, increase productivity, and save employees on gas money.

That being said, telecommuting is a very serious decision.  It’s not a ‘wake up one morning and tell everyone they can work from home’ kind of thing.  Some elements you need to think about include:

• What will your customers/vendors hear when they call your telecommuting employee?  Will 6-year old little Sally pick up the phone or will they hear Sparky the Labradoodle barking in the background?
• What equipment is necessary to set up a home office?  Who will purchase and maintain it?
• Can your home-based employee provide a safe place for sensitive information like medical data or credit card information?  Is their computer hooked up to an unsecured network?
• What happens if a home-based employee is injured on the job?  What are the company’s OSHA requirements and their liability?

This is just a sampling of the questions you should ask when agreeing to a home-working arrangement.

And, don’t forget that your management team needs some guidance on how to supervise these employees and manage the work of people they won’t see all the time.  It’s easy to spot a slacker when they’re in the office.  But when they’re miles away at home, how will you know they’re working for you and not just watching Oprah?  Or, worse yet, working for someone else while on your payroll.

Home offices can be the best…once you work out the details.

Asking for a pay increase or promotion can be a tricky thing.  Timing has to be right and your justification needs to be solid.  Just saying “I need a raise” or “I’m due for a raise” doesn’t mean a thing.  You have to say “I’m worth a raise - and here are the reasons why”.

Before you walk into your boss’ office looking for a bigger paycheck, ask yourself a couple of questions:

What have I done lately to help the company generate more revenue?

What have I done lately to help the company reduce expenses?

After you come up with the list (and hopefully it’s a long one), see if you can put a dollar figure to each item.  See where I’m going with this?  If you can help your company increase their profits, then you can justify your raise.

If you want the company to just give you money without working harder for it…sorry, not sure that’s going to happen.

To understand why, keep in mind the rules of employee pay.  Your compensation is directly tied to three things:  

1. The company’s ability to find employees in your salary range
2. The company’s ability to keep employees in your salary range
3. The company’s ability to pay your salary

 So right now in this economy, chances are good that if you left tomorrow afternoon, the company could find someone to replace you (translation: reason #1 to give you a raise is out).  And, since people are concerned about jobs right now…chances are good that people are staying put until the economy gets better (so #2 is out).  That means your ticket to a bigger paycheck is helping your company improve their ability to pay - or increase their bottom line.