Sherrie's Blog | Sherrie Suski

Compensation- putting the plan in place

November 15, 2017 by Sherrie Suskie

Last week we talked about establishing your Compensation Strategy and how to determine the competition and your rationale for certain recommendations. Once you have a thorough well thought out strategy, though, you need to execute. Careful, well thought out execution is every bit as important as developing your strategy. Remember, it is likely that you understand compensation better than anyone else in your organization so start at the top.

Get your Executive Team Bought in

Keep in mind that executive teams have a lot on their mind and are likely not up to speed with why a compensation strategy is important, so start simple. https://www.shrm.org/ResourcesAndTools/hr-topics/compensation/Pages/AlignPay.aspx The payroll in a company is by far the largest expenditure and compensation touches all areas like candidate attraction, retention, turnover and satisfaction to some degree. Pay ranks in the number three spot as to reasons why employees leave positions and the cost to replace that employee is anywhere between 100-200% of their base salary. https://www.appleone.com/Employers/SCALE/2017/EngagementTools/cost-of-turnover-calculator.aspx Plenty of reason to make sure that compensation is NOT the driving force behind your resignations.

Train your Managers to have Compensation Conversations

Once your executive team is bought into your strategy, it’s time to train your managers to talk about compensation. https://hbr.org/2014/04/how-to-discuss-pay-with-your-employees We have all heard or experienced firsthand the horror stories of employees finding out what their raise is when their paycheck comes out, never having had a conversation with their manager, or the manager walking into a group of employees, handing each a piece of paper with their raise on it and walking out, thus missing a critical opportunity to further enhance the employee’s satisfaction and level of engagement. https://compensation.blr.com/Compensation-news/Compensation/Compensation-Administration/Preparing-for-Compensation-Conversations-with-Empl/ The first step is to listen. Listen to what the employee has to say, repeat back what you think you have heard. Share critical information, such as the merit budget pool for the year and the compensation philosophy.

Communicate the Process

Letting the team know up front and reminding them often of who will do what we go a long ways towards preparing for success. http://www.simplehrguide.com/compensation-strategy-key-content.html Communicate the roles that HR will play-to establish salary grades and structures, to provide compa-ratios, to set the merit pool amount and to weigh in on any recommended market adjustments. The first line managers will be responsible for recommending salary increase, justifying recommendations for promotions or market adjustments and communicating the approved increases to the individual employees. Your executive team has the responsibility to communicate and support the compensation strategy and philosophy they have approved. Employees, too, play a role. They have the responsibility to ask questions and ensure that they get a satisfactory answer. Make sure that they know their manager is their first stop, but if questions remain unanswered that HR’s door is always open.

Do you best to create an environment where compensation is not practiced in a black box, but is implemented in a thoughtful, straight forward way, where everyone understands what it is meant to achieve and feels comfortable offering suggestions to enhance the process. A compensation strategy, created and implemented well, can enhance many aspects of the organization and the employee experience.

Compensation- Getting it Right

November 9, 2017 by Sherrie Suskie

This time of year brings all the excitement of the holidays, Halloween, Thanksgiving, Christmas and Hanukkah, among others. Amid all the festivities, for many organizations, it brings Compensation planning activities including revisions of salary structures, decisions on merit increases, promotions, adjustments and bonuses. Before you say “Bah Humbug” let’s take a closer look at how to structure a compensation plan and why it’s so important to your organization.

For all of the articles out there espousing compensation as a short term motivator, compensation speaks to our employees. It tells a story of how we perceive their value in the workplace. There is little that is more important than the value one sees in oneself and that is partly determined by the value others place on us and our contributions.

Ask Questions

You have to start out by asking the right questions in order to determine what your company’s compensation strategy should be. It’s OK not to have all the answers, they will provide topics for discussion with your internal teams.

What are your goals?

It’s important to know what problem you are trying to solve before you launch into a strategy to solve it. Do you have excessive turnover? Are you having a hard time attracting candidates? Are you losing your high potential employees at an alarming rate? Do you need to focus certain groups on different goals

How would you define your market?

Is it defined solely based on a geography you are in? Do you need to include competitors outside of your geographical regions? Is it domestic or do you have international competitors as well? Sometimes, you can get a good clue to identifying this by asking where do your employees come from, and where do they go when they leave?

How competitive do you need to be?

Some disciplines like Big Data are highly competitive and there may only be a handful of candidates that everyone is competing for. On the other hand, if your positions are relatively common and there are many candidates available, you may be able to set you target closer to the 50th percentile and be just fine

What and how should you reward?

What behavior do you want to reinforce and what types of rewards will you give? The most effective plans focus on a Purpose Statement and/or Guiding Principles. Your rewards should ultimately drive the culture you are trying to create. Even monetary rewards come in many different forms. They could be merit increases, promotions, short term or long term cash incentives.

All of the above questions will help to guide you toward the most effective compensation strategy for your organization and drive employee productivity forward.

Holocracy- Implementation Challenges

October 23, 2017 by Sherrie Suskie

Last week we talked about Holocracy, what it is and what its advocates say the potential benefits are. But in reality, does Holocracy work ? Can a type of self-management that gives decision making power to fluid teams, or “circles,” and roles rather than individuals yield results and better decisions than a traditional structure? How well do people deal with the uncertainty that a holocratic approach creates?

Sourcing and Hiring

Holocracy models complicate sourcing and hiring decisions. How do you advertise for a job that is comprised of ever changing micro roles and how do you assess whether the person sitting in front of you actually is competent at those micro roles and any other talents they might have? People are used to looking for traditional job titles, but in holocracy, there are no traditional job titles. Do management level employees worry that deviating from their career path might stall out their careers. What if they are at a Director level now and you are trying to recruit for a team member with a skill set normally held by an Accounting Dir. How many would take a “team or circle member” title?

Micro Roles

Another issue that holocracy creates is the formation of micro roles. No longer is one individual responsible for a specific set of set roles, but a swirling set of micro roles that are ever changing. It can complicate the work actually getting done as employees may be responsible for up to 25 different responsibilities and struggle with prioritizing them and deciding where to focus first. They may be members of a number of different circles and have weighty responsibilities to each, but not be able to satisfy all of them or be forced to prioritize in conflict with others.

Compensation

Compensation becomes difficult as well. Not only are there struggles with determining internal equity as this now requires each of 100’s of micro roles to be assessed and the value of these roles change as new circles are created and as the organization matures and different skills become more or less valuable, but external equity is an issue. How do you go to the market to assess the worth of a position when there is no longer a match for the position? There is nothing to compare the person’s position to.

Unlearning old behavior

For holocrcay to be successful it necessitates that both bosses and subordinates unlearn old behavior. If everyone is truly to be tapped for their full potential then there cannot be those who are hesitant to express opposing views in front of what used to be superiors. This is a hard habit to break for both bosses and subordinates. It is hard for leaders to learn to step back and not lead all the time.

Holocary has yet to be proven as a model that offers significant benefits over a traditional structure. The best of both worlds may be to incorporate some of the circle mentality into the traditional structure allowing everyone a voice to be heard and encouraging growth horizontally as well as vertically.

Hierarchy versus holacracy

October 16, 2017 by Sherrie Suskie

Before we delve into whether or not holacracy is right for your organization, how many of us know what holacracy is? Holacracy is a social technology or system of organizational governance in which authority and decision-making are distributed throughout a holarchy of self-organizing teams rather than being vested in a management hierarchy. In theory, holacracy empowers people to make meaningful decisions and drive change.

Instead of a traditional management structure where questions must go from the bottom to the top and decisions go in reverse, organizations that adopt holacracy empower agile teams of people to make and implement decisions.

Self-organization models typically share three characteristics:

Teams are the structure

In holacracy, there are “circles” or many companies simply call them “teams.” Whatever they’re called, these basic components are not, individuals, and not units, departments, or divisions but they are the essential organizational building blocks. Individual roles are defined and assigned in order to accomplish the work. As in more traditional hierarchical organizations, there may be different teams for different projects or functions like finance, tech, sales. But self-managing enterprises have a lot more of them. After Zappos implemented holacracy, 150 departmental units evolved into over 500 circles.

Teams design and govern themselves

Although self-organizing companies try to avoid the traditional hierarchy, the teams are a part of a larger structure, which they are actually able to shape and refine. Holacratic organizations have everyone sign a constitution—a document outlining the rules by which circles are created, changed, and removed. So the circles not only manage themselves; within those guidelines, they also design and govern themselves. The constitution doesn’t dictate exactly how people should do their tasks. It explains in a broad way how circles should be created and operate: how they should assign roles, what boundaries the roles should have, and how the circles should interact with one another.

Leadership is constantly changing

In self-managed organizations, leadership is distributed among roles, not individual people. People usually hold multiple roles, on multiple teams. Leadership responsibilities continually change as the work changes and as teams create and define new roles. Technology is essential for keeping all these changes straight. The information is accessible to anyone in the organization and each individual’s commitments are visible to everybody at the company. Supposedly, transparency enables cross-team integration.

Although it is becoming a buzz word, holacracy is not being adopted at a rapid pace. The organizations who have tried to adopt it run into a myriad of issues, including increased turnover and decreased productivity given the endless meetings. While some look at it with interest, others simply say it does not work. Next week we will delve into some of the issues that have arisen when organizations have tried to implement holacracy.

Putting Words into Action

September 12, 2017 by Sherrie Suskie

There is never a time more appropriate for putting our words into action than in the midst of unforeseen crises and disasters. We all speak of our employees being our biggest asset, of creating a workforce that is engaged and more productive. We know that when we treat our employees well it builds loyalty, a great culture and better metrics at the bottom line. But how many of us really show our employees, in a meaningful way, that we care about them as more than just employees? That we care about their lives and families outside of work?

I am proud to work for a Company that does just that in a bigger way than I have previously witnessed. The unfortunate, recent, back to back hurricanes have devastated parts of Houston, Texas and many parts of Florida. While many companies put out words of encouragement to stay safe, how many really went the extra mile, went above and beyond?

Here are just a few of the more meaningful ways you can show your employees that you care and, hopefully set an example for other companies to follow:

Full Pay

Ensure your workforce that they will continue to be paid full pay for all the hours/days they are unable to get into the office to work due to the storm or subsequent damage or flooding. Many employees live very close to their paychecks and losing even 1-2 days of pay creates an undue hardship and stress on the family.

Insurance

Many employees do carry renter’s or homeowner’s insurance, as well as car insurance, but may not be able to easily afford the deductibles. Some have purposely chosen policies with lower premiums and higher deductibles in the hopes that they would not run into a situation where they needed them. Most of these deductibles are in the $100-$500 range. Think about what it would mean to your employees if you were to offer to reimburse them for their deductibles?

Housing

We are fortunate enough to be a property management company with homes all over the US. We offered all of our employees under evacuation orders, vacant homes to move into, on a short term basis, in other geographical areas out of harm’s way. Even if you are not so fortunate as to have vacant homes to offer, you can offer to pick up the cost of hotels for the time that the employees are forced to evacuate.

Donations

It probably goes without saying that others want to help in times of need. Set up a Red Cross donation through payroll deduction. Make it easy for the rest of your workforce to assist those in need. When we set this up last week, we have over 20% participation with 45 minutes.

Take this opportunity to put your words into action and show your employees that you do truly care about what they and their families are going through and you are here to help. It’s time we learn to take care of one another out of and in the workplace!

Let leaders lead

August 28, 2017 by Sherrie Suskie

Most who enter the Human Resources disciplines due so out of a desire to help others and to help the organization to align their employee workforce with the goals of the company to further productivity. Often times, however, we forget to let our leaders lead. Especially as an organization grows, HR functions need to adopt a “train the trainer” approach more than a train everyone approach. Although enlightened organizations put their full support and resources into HR functions, the team still has a responsibility to be able to scale the organization without adding significant numbers of HR team members. Efficiency is key.

Train- the- trainer

A train-the-trainer model allows experienced trainers to show a less-experienced individuals how to deliver courses, workshops and seminars. http://work.chron.com/train-trainer-model-5463.html Usually, a new instructor first observes a training event led by the course designer. A train-the-trainer approach can build a pool of competent instructors who can then teach the material to other people. Instead of having just one instructor who teaches a course for a long time, you have multiple instructors teaching the same course at the same time. This ensures that employees get timely training to complete tasks according to company policies and procedures.

Identify SME’s

SME’s or subject matter experts exist in all corners of the organizations and at all levels. It is a fairly good bet that your excel gurus are not sitting in the corner office. Tap those resources! Find out how has a skill set that the rest of the organization could benefit from and engage the SME to deliver the training. This serves two purposes. One, it enhances your pool of trainers and two, it gives well deserved recognition to a group of people who might be overlooked otherwise, further engaging them in the business.

Step out of the way

The inclination is to teach every class to every audience, but the real goal is to get the training out to a broad audience in a timely manner. Like a proud parent, you need to teach your junior trainers your techniques, ensure that they know their material, do a few dry runs with them and then let them launch. Will it be perfect, no. Will it improve with time, yes and will you gain far more by engaging your workforce then trying to do it all yourself, a big YES!

Training is not a one and done. It is a process over an unending period of time that, done correctly, not only teaches a new skill, but also engages and inspires a workforce to do greater things both in their work and personal lives.

Health Insurance 2018

August 14, 2017 by Sherrie Suskie

PwC’s Health Research Institute (HRI) annually projects the growth of health insurance and more specifically, medical costs, in the employer insurance market for the coming year. They also identify the major factors expected to impact the trend. Moving into 2018, the healthcare industry seems to be settling into a “new trend” which is marked by more moderate fluctuations and single-digit medical cost trends

HRI projects 2018’s medical cost trend to be 6.5%—the first uptick in growth in three years.

What does this mean for employers still seeking to get the most for their insurance dollars and provide the best benefits for their employee population? In a labor market that is heating up and becoming more competitive, employers are looking for new cost containment strategies beyond shifting more costs to their employees.

Target Health and Wellness

Many employers are creating wellness programs and enlisting the employees in a partnership arrangement regrading practicing better health habits. Although hard numbers are difficult to come by, many employers believe they are creating a focus on wellness that will pay off at the bottom line. Employers are offering smoking cessation programs, health fairs populated by as many as 100 different vendors, offering everything from multi vitamins to massage, and healthy snacks, like fruit and nuts instead of candy, cupcakes and empty snacks.

Investigate provider arrangements

More employers are taking a harder look the health services they are providing and how those health services are being offered. Some are considering more restrictive arrangements like EPO’s (Exclusive Provider Organizations) where they can get better discounts by decreasing the size of the provider network. Other options include offering 2 tier plans where the employer pays a sizable percentage of the lower plan, but gives the employees an opportunity to “buy up” if they want to choose the more expensive plan.

Evaluate the value of drug spending

Employers are banding together to put pressure on drug companies to moderate price increases. Similar pressures were enacted in the early 1990s and significant decreases in the drug price growth rate.

We are already seeing some pharmaceutical companies take action, limiting price increases, offering cheaper generic alternatives and proactively addressing questions of value in the marketplace.

Even though health insurance price increases have slowed over the past three years, they still outpace inflation and employers need to continue to pursue alternatives that will lead to a healthier workforce and, ultimately, to lower health insurance costs for everyone.

International HR – Germany

July 17, 2017 by Sherrie Suskie

There are significant differences when it comes to the Human Resources organizations in the US versus companies in Germany, and many other countries in the EU.

Managerial Discretion

Anyone who has worked in the US understands that managers and HR have a lot of discretion over who to hire and who and when to terminate. Sometimes these kinds of decisions can be made in a few days or weeks. In Germany, specifically, these types of decisions are months if not years long, with serious infractions needing to have taken place. Germany has a co-determination practice. Co-determination is a practice whereby the employees have a role in the management of a company. The word is a literal translation from the German word Mitbestimmung.. In some countries, like the USA, the workers have virtually no role in corporate management; and in others, like Germany, their role is more important.

Wage differences

In the US, many studies show that white collar workers can make as much as 20 times that of blue collar workers in the same company. This is drastically different than in Germany. Germany is known for its balanced remuneration system. The average white-collar worker’s wage is only 20% over the average blue collar worker`s wage. In addition, companies are not allowed to hire skilled workers from other companies by offering higher salaries.

Company Loyalty

Here too, the perception differs. In the US, workers are generally always in search of something new or better, and there is very little company loyalty. In Germany, employees feel a much greater sense of loyalty to their companies and, general, will not leave. They will look for opportunities within their current company or subsidiaries and the company will work hard to provide those.

Management decisions

While the US is typically a very individualistic society, making quick decisions and reversing them if necessary, Germany, in stark contrast, tends to work like a democracy in their companies. It is important the whole team has a say and the whole team is bought into the decision. While this can seem appealing, the trade off is time. Decision making will take much longer with a group of employees when everyone needs to be in agreement.

Both cultures have their pros and cons and neither is necessarily best. The US, acting as an impulsive, decisive, all knowing teenager and Germany as the wise parent, moving slowly with certain purpose.

International HR – UK

July 17, 2017 by Sherrie Suskie

Differences between the UK and US

Much like there are slight difference between states in the US, like the timing of final pay for an involuntary or voluntary termination, ranging from day of termination in California to next scheduled pay period in Georgia, there are greater difference amongst countries around the world. Many of these differences relate to working hours and leave.

Overtime

In the UK, for instance, employees cannot be required to work more than 48 hours in a work week, while in the US, there are companies that require, legally, far in excess of this amount, especially during peak seasonal times.

Vacation Pay

While most workers in the US get 10 paid vacation days per year, their lucky UK counterparts are enjoying more than twice that at 28 days. And, if you are in the UK, you are going on “holiday”, not on “vacation.”

Maternity Leave

In the UK you can take a year off for maternity leave without losing your employee rights. No matter how long you’ve worked for a company. Just let the company know 15 weeks before the due date. The official UK maternity leave policy – known as Statutory Maternity Leave (SMP) – means that employees will still earn money for up to 39 weeks. During the first 6 weeks they receive 90% of their average weekly earnings before tax.

Then for the next 33 weeks either £136.78 pounds sterling (about $225 US per week) or 90% of their average weekly earnings before tax depending which is lower. Their employee rights, including holiday entitlements and pay raises, are safeguarded during the time they take off. Compare that to the 6-8 weeks that most US employees take and only receive 66% of their normal wages IF they have SDI.

Teach a Man to Fish

July 6, 2017 by Sherrie Suskie

One of life’s conundrums is the choice of when to do something for someone and when to teach them to do it for themselves. This is an age old struggle between parents and children, teachers and students, managers and employees and the Human Resources team and our internal customers. We all want to help those in need whether it’s a child struggling to open a heavy door or an employee who needs a quick answer. But are we really “helping” when we constantly rush in to be the hero or are we really fueling a need within ourselves? Might it not actually be better to teach someone how to be self-sufficient and then step back and out of the way? This would allow you to make a greater and more broad reaching impact.

Especially for those of us in HR who, generally, are in this function because we enjoy helping others, we might want to take a look at how to more effectively “help” others in the organization. It would be beneficial to have a plan when someone comes to you with a problem. A way to identify whether this is a crisis and an immediate need or an opportunity to teach someone to be able to do it for themselves.

Urgent or Immediate needs

HR gets bombarded daily with immediate needs or at least needs that the internal customer thinks are immediate needs. A few examples of actual immediate needs: Someone has fallen and you need to call 911, someone is making credible threats and needs to be escorted out of the building, access to systems need to be shut down due to an involuntary termination for cause. These are the types of needs that you will always handle and are probably not teachable, necessarily, to someone else.

Important needs

Important needs are those that are important but not urgent. Examples might be a question on an incentive plan and how it works or an update on a particular position you are hiring for. Some critical needs can lend themselves to establishing SOP’s, Standard Operating Procedures. Requisitions reports can be created and distributed so that managers can check statuses of their openings. Webinars can be held to explain the nuances of the incentive plans.

Routine needs

Routine needs are those that someone will call you for every time they need the answer. Someone has an address change, or a title change or a change in the car reimbursement program. Routine needs are wonderful teaching opportunities. Offer to walk the person through the steps needed and then establish the SOP’s, standard operating procedures, and let them know where to access them.

Un-needs

Occasionally, you run into those people, or they hunt you down, with on-going, what we will call, un-needs. This is the desire to have someone listen to them by creating a perceived need. In these situations, the best thing to do is to politely remind the person that you have a call coming in or must get back to your work. You can train someone out of this behavior, but not necessarily teach them.

By defining the different classification of needs, you will work more efficiently, have a broader impact and be able to help others to help themselves.