The SESCO Report – November 2011

Planned Merit and General Increases by Size and Industry

In BLR's 2012 Pay Budget Survey, June 2011, a total of 1,637 organizations participated. The following are the results:

Actual and Planned General Increases by Company Size (to view chart click HERE)

Industry Increases Planned for 2012 (to view chart click HERE)

Industry Nonexempt Increases Planned for 2012 (to view chart click HERE)

There is no question that managing compensation has and always will be extremely challenging as compensation is an employer's largest, single controllable cost. For those organizations who do not have a carefully developed, formal compensation system, we suggest that you contact SESCO to discuss the basic elements of an effective compensation system as well as philosophy and compliance such as EEOC, Wage and Hour and Affirmative Action guidelines.


Labor Unions Lost Nearly 10% of Members in 2010

The U.S. Bureau of Labor Statistics has issued its annual report on union membership in the United States. It's not good news for the unions.

Union membership fell almost 10% in a single year, from 15,327,000 in 2009 to 14,715,000 in 2010, a loss of 612,000 members.

More than half of the decline was in the private sector where union membership fell by 339,000. The decline in union membership was also accompanied by a decline of 317,000 in employment on private payrolls.

Unlike 2009, when public sector union membership increased despite a decline in government employment, in 2010 public sector membership also declined, in this case by 273,000 members. There was a decline in public sector union density of 1.2 percentage points, from 37.4% in 2009 to 36.2% in 2010.

In 2010, union membership on government payrolls remained above 50% of all union members, despite only about one in six jobs being in government. At the state level, government employment increased by 34,000 while union membership declined by 56,000. As a consequence, union density dropped from 32.2% to 31.1%, a decline of 1.1 percentage points.

The biggest change in the public sector took place at the local government level, where employment declined by 209,000 and union membership declined by 197,000 resulting in a 1.0% decline in density.

Unions experienced their greatest percent declines in Michigan (-2.3%), New Jersey (-2.2%), Massachusetts (-2.1), Illinois (-2.0%), and Hawaii (-1.7%), all states with relatively high levels of unionism.

The states experiencing the greatest percent of union density were West Virginia (+.9%), Idaho (+.8%), Alaska (+.6%), Kansas (+.6%), and New Mexico (+.6%), a mixed bag of states as far as union density is concerned.
Due to the continued loss in membership, SESCO finds that the labor movement is extremely aggressive and in desparate need of union members. SESCO has represented a number of employers in the Southeast where union membership is relatively low as compared to other states in the union. We believe that this activity is due to the overwhelming percentage of union-free facilities providing for a significant amount of opportunities for the union.

SESCO continues to suggest that managers be trained to include awareness and avoidance. This two-hour program provides for a number of basic, yet important leadership tips and recommendations to not only teach managers on remaining union free, but how to properly and effectively manage their employees on a daily basis, thereby removing the need of an outside third party.


Ensuring that the Performance Appraisal Process is Productive

Let's face it, everybody HATES PERFORMANCE REVIEWS. In fact, most people would rather go to the dentist. Managers see them as a time stuck in an already manic schedule. For HR, it's just a start to the annual paper chase process. Executives don't see value in typical review because they don't tie these back into the organization's overall success. And most employees see the whole process as busy work, without much real value.

The following is a checklist to improve the performance appraisal process and make it meaningful:

Preparation:

Review performance plans and accomplishments.
Note areas in which goals have not been met.
Complete appraisal form.
Prepare ideas for further development.

Timing:
Give the employee advance notice of the time of the interview.
Schedule enough time for a meaningful exchange to take place.

Location:
Arrange for a quiet location.
Be sure that you have privacy and avoid interruptions.

Conducting The Interview:
Begin with a few minutes of casual conversation to help relax the employee.
Proceed to discuss all aspects of the job; go over each accountability separately. Although you must point out both strengths and weaknesses, it will probably be more effective to discuss positive aspects of performance first.
Try to avoid appraisals that are completely negative.
Focus on performances rather than personality.
Be constructive, rather than destructive. If there are weaknesses, point them out, but emphasize what can be done to rectify the situation.
Focus on ONE key area of responsibility where improvement is mutually agreed to be desirable. Establish a Development Plan with the assistance of the employee to improve this area of responsibility.
Welcome any questions or complaints that the employee may have.

Summary:
Briefly review the important points of the appraisal.
Carefully restate the details of any proposed sources of action that you have recommended.
Be sure that the employee has had sufficient opportunity to say everything that he/she intended.
At the end of the interview, allow the employee to read the written appraisal and fill out the employee comments section.
The form must be signed by the employee to verify that he/she has read it.

Follow-Up:
Periodically check the employee's activities to determine whether or not goals discussed at the interview are being obtained.
Offer assistance in achieving objectives.

Contact SESCO to discuss performance management systems, training and criteria-based job descriptions.


How Much Do We Know About Employee Motivation?

1. If they didn't need the money, the majority of people would not work.

Disagree. People work for many reasons other than money. Work can be a source of personal satisfaction related to achievement or to serving a useful social purpose. The workplace is a source of friendships and social interactions. A job may confer status on an individual, and work is often a source of self-esteem and self-actualization.

2. A clean, comfortable working environment will motivate most people to work more effectively.

Disagree. Good working conditions tend to be satisfiers rather than motivators. The absence of good working conditions can often be a source of dissatisfaction and, thus, may be an impediment to effective work; but the existence of good working conditions rarely motivates effective performance.

3. For most people, having job security reduces their need to work as effectively as they can.

Disagree. People who have job security and yet do not work effectively are not less productive because they are not threatened by the loss of their jobs, but because their jobs are not structured in ways that will motivate them.

4. For some people, a distinctive job title is a greater motivator than more money.

Agree. There are people for whom status is more important than money.

5. The opportunity to participate in problem-solving and decision-making is a prime motivating factor for a large number of employees.

Agree. While it is true that there are many people who do not welcome decision-making responsibility, many more are motivated by the opportunity to participate in these activities.

6. A supervisor's expressed confidence in an employee is almost always a strong motivating influence.

Agree. The evidence is strong that such expressed confidence is highly motivating for most people.

7. For most employees, money is by far the single most powerful motivator.

Disagree. Except for people whose compensation is clearly tied to performance, money does not have great staying power as a motivator. It can be a great dissatisfier if any employee perceives inequity in his/her compensation.

8. Most employees prefer not having decision-making responsibilities.

Disagree. While this is true of many employees, many more are motivated by involvement in the decision-making process.

9. Pensions, medical insurance, and other fringe benefits are major factors in motivating employees to work effectively.

Disagree. Fringe benefits are like good working conditions for most people-they are satisfiers rather than motivators.

10. Awards and other forms of public recognition are strong motivators for a significant number of employees.

Agree. Virtually everyone is motivated by recognition.


Special Thanks to New SESCO Clients!

Ourisman Ford & Lincoln
Alexandria, VA

Mike Doty, DDS
Abingdon, VA

A Sacred Moment, Inc.
Everett, WA

SESCO Client Feedback

"Thank you so much for all your help last week. I could not have gotten all the information I needed and the process to have gone as smooth as it did without the help of the two of you. It means a lot to have someone just a phone call away when you need it, and I really needed it." ~ Jaynelle Golladay, Operations Coordinator — Harrisonburg Community Health Center

Wage and Benefit Survey — "It saved me a lot of time because I didn't have to put the booklet together this year and the phone calls increased our participation which was great. Kim Tester was very friendly, I never felt like I was bothering her, and she made me feel like our project was important. You have a wonderful employee! Also Bill Ford was very flexible regarding the contract and friendship. Thank you!" ~ Ann Rohret, Executive Assistant — Iowa Association of Homes and Services for the Aging

"Joel helped develop and create a compensation plan that we can take and manage on our own that is effective and functional. He is very knowledgable about the issues, very flexible and willing to accommodate in any way possible. SESCO goes out of the way to ensure accurate and timely information. Cooperative and proficient in all aspects." ~ Lori Counts — New Peoples Bank

SESCO Client Inquiry — Staff Response

Question: How does an employee's Medicare entitlement affect his or her COBRA continuation rights for health care insurance?

Answer: The timing of the entitlement is what will determine a qualified beneficiary's (QB) right to COBRA continuation coverage. If the person becomes entitled to Medicare before electing COBRA coverage, entitlement cannot be a basis for terminating the QB's right to COBRA coverage. In contrast, if the person becomes entitled to Medicare after electing COBRA coverage, the statute allows for this person's coverage to be terminated as of the date of entitlement to Medicare.

The COBRA regulations clarify that simply being eligible to enroll in Medicare does not constitute entitlement; the qualified beneficiary must have actively enrolled in either Part A or B to be considered entitled to Medicare. Social Security has further clarified that entitlement to Medicare involves actively applying for benefits or submitting a claim that Medicare pays.


Happy Thanksgiving

"Let us remember that, as much has been given us, much will be expected from us, and that true homage comes from the heart as well as from the lips, and shows itself in deeds." ~ Theodore Roosevelt

"Thanksgiving Day comes, by statute, once a year; to the honest man it comes as frequently as the heart of gratitude will allow." ~ Edward Sandford Martin


How To Observe Thanksgiving Poem

Count your blessings instead of your crosses;
Count your gains instead of your losses.
Count your joys instead of your woes;
Count your friends instead of your foes.
Count your smiles instead of your tears;
Count your courage instead of your fears.
Count your full years instead of your lean;
Count your kind deeds instead of your mean.
Count your health instead of your wealth;
Count on God instead of yourself.