Blog Archive - September 2009

When economic times get tough, states get creative about protecting and managing revenue. Payroll professionals have already hustled to accommodate new COBRA legislation and changes to state unemployment and disability eligibility earlier in 2009. Some states are even establishing new approaches to taxes, such as adopting state-based earned income credit.

A study of 20 companies that have replaced their traditional job descriptions with people’s competencies and skills was described in a recent WorldatWork Quarterly Journal. Public and private companies took part, as did organizations from the non-profit and government sectors. These organizations reported significant improvements in their ability to recruit, engage, develop and reward their workers. By rolling out competencies, each organization provided a foundation for performance management, training and development, career growth, compensation, staffing, and other HR programs.

Cross-training is receiving renewed attention from companies around the globe. In Singapore, for instance, GlaxoSmithKline plans to cross-train employees to make them “more flexible in a fast-changing business environment.” W.R. Grace’s new Customer Centre of Excellence near Barcelona encourages cross training among product groups, “allowing for increased productivity and efficiencies.”

Inc.com  defines cross-training as “teaching an employee who was hired to perform one job function the skills required to perform other job functions.” Cross-training can enhance an employee’s depth of skills (e.g., training a veteran sales person to sell other types of product lines), or add to an employee’s breadth of knowledge (training a compensation analyst to administer benefits.)

As Lena previously touched on, it’s important to avoid the peanut butter approach to allocating merit increases. Any motivation employees get from these rewards will be misplaced; your high performers won’t be motivated to work hard and your poor performers will be motivated to keep up their poor performance.

There’s another reason to focus on rewarding your top performers: these employees will always be in demand. Superstars go the extra mile and in the current economic environment, organizations need these employees to work harder than ever. Your funds may be limited, and it might be a tough sell to management, but it’s prudent to allocate some money to reward high performance.

There is no shortage of news regarding the length and severity of the current recession, and its effect on people’s lives.  It is going to take the world a while to recuperate from this large wave of bankruptcies, layoffs, and financial scandals. Salary.com’s 2009 Salary Budget Survey shows that salary increases will be lower this year, with many employers freezing pay altogether.

As scrutiny over compensation expenses grows, human resource and compensation managers need to help their companies think strategically in order to survive the recession and thrive in the recovery. In essence, employers need to ensure they receive as much value from their work force as possible, while at the same time ensuring that jobs continue to be attractive value propositions for employees.