Author: Site Staff

Regulators have placed more stringent requirements on members of corporate boards of directors than ever before. In return, members’ pay is rising.

The median retainer for board members rose from $35,000 in 2003 to $40,000 in 2004, according to Hewitt Associates, which surveyed more than 170 U.S. companies.

The makeup of this board pay is changing: Restricted stock is hot and stock options are not. Board members are paid in options at 59 percent of companies, compared to 68 percent in 2003. Restricted stock is used 34 percent of the time, up from 27 percent.

In addition to dealing with vigilant regulation, board members are working more. Edward Archer, managing director at the compensation-consulting firm Pearl Meyer & Partners, tells CFO magazine that board members are dealing with “more responsibility, more time and a lot more pressure.” He estimates that “an average director of a top 200 company (largest 200 U.S. industrial and service companies) spends one-third more time on the job now than he or she spent two years earlier.”

Sibson Consulting says that the regulatory changes affecting boards are keeping quite a few workforce-management executives awake at night. It is telling clients that they can attempt to keep board pay in check by playing up the positive benefits–beyond just money–of being on a board. These include the opportunity to make contacts; the chance to make a difference in the world; and the opportunity to increase one’s knowledge and skills.

The faculty at Columbia College in Missouri has recommended that employees receive domestic-partner benefits. But the college’s president is essentially vetoing the recommendation, according to the Columbia Daily Tribune.

Columbia President Gerald Brouder says that the proposal might “cause problems” at the college’s 15 military campuses, according to the Tribune. More than half of Columbia’s campuses are on military bases, serving service men and women and their dependents. He also says that offering health and other benefits to domestic partners (which often, though not always, end up being given to people of the same gender) could conflict with Missouri’s constitutional definition of marriage as being between a man and a woman.

In addition, Brouder says, “it’s nearly impossible to distinguish between a genuine same-sex relationship and a couple that might live together simply to acquire benefits.”

Celeste Mazzacono, one of the faculty members that supports offering domestic-partner benefits, says she does so partly for business reasons–it will help recruit faculty members.

For related information, see “Little Impact From Gay Marriage Ruling.”

Sponsored by Pensions & Investments and Workforce Management

A key to bottom-line success for any organization is its ability to attract and retain high-caliber employees. Offering outstanding benefits is one way to draw and keep great employees, of course. But equally important is helping employees learn to make the most of their benefits–particularly when it comes to defined-contribution plans. So many employees miss opportunities to create a comfortable retirement because they don’t understand how defined-contribution plans work, why they’re important and how they can be used most effectively.

If your organization does an outstanding job educating employees about your defined contribution plan, then the Eddy Awards are for you.

The competition, co-sponsored byWorkforce Management and its sister publication, Pensions & Investments, recognizes corporate, public and union defined contribution plan sponsors for the best and most effective investment education programs in several categories. Nominations are due Oct. 15.

Winners will be announced and will receive their awards at the 14th Annual Defined Contribution/401(k) East Coast Conference this winter.

The 2005 Eddy Awards are just around the corner. Now is the time to gather your materials and begin the submission process.

Click here for the 2005 Eddy Awards Entry Form

Employers’ efforts to get their employees in shape–under the assumption that such programs will reduce health costs–are all the rage. But according to The Washington Post “the case for employer involvement in health promotion isn’t yet clear-cut, at least as it concerns the bottom line.”

“What’s lacking is clear data that [employer] intervention reduces costs,” says Bill Dietz, director of the Centers for Disease Control’s Division of Nutrition and Physical Activity, which recently launched a $14 million study of workplace wellness programs. And according to the U.S. Department of Health and Human Services, employees aren’t particularly interested in health-promotion programs at work and lose whatever interest they do have quickly.

Ron Z. Goetzel, director of Cornell University’s Institute for Health and Productivity Studies tells the Post that the most financially effective wellness programs are those that target specific diseases such as diabetes as well as such behaviors as smoking, as opposed to fitness-club discounts. Fitness-club perks are often used by people who normally exercise anyway and don’t do much to encourage couch potatoes to improve their health, he says. More information on wellness, disease management, obesity and related topics is available online.

Dear Grooming:



You’ve identified what matters most to organizations regarding people-related programs: results. A good leadership-development program improves the skills, knowledge and behaviors of leaders so that they achieve the business results expected of them and the organization.

Leadership development is done to:

• Communicate the key competencies, skills, abilities and behaviors that are expected of leaders in an organization.
  
• Assess current skill levels of individual leaders and aggregate skill levels of leader groups.
  
• Identify skills gaps, either for individuals or for the entire group.
  
• Prepare a development plan and identify the experiences that are needed to help the individual or group close the gap.
  

You are on target in wondering about the validity of competency models. It’s important to pay attention to the validity of a competency model if it is to be used as the basis for feedback or for making decisions about promotions, career opportunities, succession, etc. (for both legal and effectiveness reasons). In the end, a valid leadership-competency model is, by definition, a current model because it reflects what is expected of leaders now and in the immediate future.

A well-designed and validated leadership-competency model should reflect the competencies that are most strategically significant to your business. These are the key competencies–not an exhaustive list–a leader must demonstrate on the job. Each competency has behaviorally defined levels of performance (e.g., needs improvement, achieves expectations, exceeds expectations) or behaviorally defined levels of growth (e.g., developing, skilled, expert). This defines the behaviors that are realistically expected of high-performers.

For maximum effectiveness, a leadership-competency model should be specific to your organization’s needs and used for a range of decisions, including recruiting and selection, development of individuals, design of leadership course work and assessment tools, and succession planning. Tailor the competency model to support the company’s specific mission, vision, strategy and goals. Be sure to periodically review and update it, especially in light of any major business changes that affect the mission, strategy, etc.

Remember, too, that a “well-researched leadership-competency model” may not target the specific behaviors or skills you need to make smarter organizational decisions on development and promotions. Instead, it’s likely to derive from best practices. GE wouldn’t adopt a leadership-competency model used by Microsoft, and vice versa.

In the end, a validated competency model using best practices always would be better than making a gut decision. Still, it lacks validation inside that particular organization, and therefore is unlikely to provide the strategically sound foundation of a tailored model.

SOURCE: Catherine Mergen, associate principal, Mellon’s Human Resources & Investor Solutions, Chicago, Oct. 25, 2003.

LEARN MORE:How to Capitalize on Competencies.

The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

Dear Tabs on Tabulators:



An organization’s overall performance-management system begins with the development of organizational strategy. Before any assessment of individual performance is made, make sure the organization’s direction is articulated and communicated. Although looking for bank-related standard performance indicators may be an attractive solution, you’ll achieve better results and have greater buy-in from all stakeholders if key performance indicators are defined on the basis of the bank’s mission, vision and values, combined with the job’s accountabilities, objectives and standards.

Once you have defined the accountabilities, one way to define performance standards is to identify “high-performers” or “stars” within each unit of the bank. This can be segmented into management and non-management. Then, using a standardized set of questions, interview both the star and the star’s manager. Draw out what makes this person a star within the organization. What results are generated by high-performers? Capture direct measures of output. There are only four direct categories of output: quantity, quality, cost and time. Identify the most effective and valid measures for each of these categories.

A performance-appraisal form then can be designed on the basis of traits, talents and results found in high-performers. The design of the form is not as critical as the research that went into it. However, given that the form is a kind of report card for the individual, the better the design, the more effective it will be. BancOne Corp.’s performance factors (from 1996) are listed in Dick Grote’s The Complete Guide to Performance Appraisal. While most of the performance factors are similar to those found across all industries, several are bank-related:

For Management
Business and Operational Management
● Financial planning/forecasting
● Controlling
● Asset quality
● Compliance and internal controls

Quality Process
● Solicits customer feedback/complaints
● Measures key customer/financial indicators
● Develops and reaches quality plan objectives

Customer Relations (internal/external)
● Monitors customer/client feedback
● Develops new/improved customer relations

Grote states: “It is unnecessary to determine in advance the level of performance that will earn a rating at each position on your scale (highest to lowest). Only the core requirements for fully satisfactory performance need be identified.”

You also could design a special form for measuring traits considered critical or most important for a given job. You would indicate the level of importance of a specific trait to a job (high, medium or low).

Then you’d use a numerical scale of 1 through 5 to indicate the level of performance observed or documented for the employee. For example: 1 = clearly below acceptable levels; 2 = needs immediate improvement; 3 = meets high standards; 4 = consistently exceeds high standards; and 5 = always exceeds high standards and consistently works effectively beyond the scope of the job. Include a comment box to support your rating with objective results using quantities, qualities, costs and time.

SOURCE: Carl Nielson, principal, The Nielson Group, Dallas, Oct. 25, 2003.

LEARN MORE: About 67 other items on performance appraisals, including sample appraisals.

The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

Faced with a strike by nurses and other employees, the Group Health Cooperative in Washington state will make do with $40-an-hour temporary nurses this week, according to the Seattle Times.

The 5-day strike, like many recent labor disputes around America, involves the shifting of health-care costs to employees. Union members at Group Health currently “pay no monthly health premiums and receive 100 percent insurance coverage after paying $5 co-pays for doctor visits and prescription drugs,” according to the Times.

Management would like to increase co-pays to $15 and start charging employees a percentage of their pay for coverage. According to the New York Times, the employees–who are members of the Service Employees International Union–are willing to pay more, just not as much as management is requesting.

A similar dispute is taking place at Caterpillar.

A Dear No Autocrats Allowed:



Aren’t the results enough proof that her managerial approach is out of style, not to mention ineffective? If turnover is high under her command, she ought to be wondering why, and examining ways to correct the problem. If not, then she’s probably too close to the situation to realize that it is her managerial style that’s at fault (rather than the young front-liners she’s probably blaming). Advise her to step out of the frame and take a look at the big picture.

Show her statistics on your high turnover and low morale. Show her the value of retaining people. If she still doesn’t get it, take a bolder step.Survey your employees and ask for candid, albeit anonymous, responses to a series of questions about the job and the company management.

Use sample questions like:

• Would you recommend this job to a friend?
  
• Do you work hard and do your best even when no supervisor is watching you?
  
• Do you feel valued and appreciated by management?
  

Surely these andother questions will be the wake-up call she needs to totally revamp her managerial style–or find another career.

SOURCE: Eric Chester,Generation Why, Lakewood, Colorado, September 2003.

The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

Some employers are taking their time in figuring out how to comply with the U.S. Department of Labor’s new overtime regulations. Howard Radzely, the Labor Department’s head of litigation, tells The News & Observer, which covers the Raleigh, North Carolina area, “That might not be a wise decision.”

“We will begin enforcing these new rules starting Monday,” Radzely says. “Those who take a wait-and-see approach will likely be visited by a compliance officer if we get a complaint.”

In Raleigh, 60 employees at WakeMed, a hospital, will now get overtime, including some who work in the hospital’s recreational facility, according to Jeanene Martin, WakeMed’s senior vice president of human resources.

The News & Observer reports that at the cardiology practice of Capital Heart Associates, some employees may lose overtime protection. At Rex Healthcare, a couple of employees in the IT department will also lose their non-exempt status.

Many employers apparently haven’t performed the self-audits that these Raleigh companies have. The Post and Courier, a Charleston, South Carolina, newspaper, surveyed employees last week and found that “most had no clue the new overtime regulations are coming.” And a spokesman for 200,000-employee Verizon tells the Boston Herald that “This is such a complex issue we are still studying it.”

The new overtime rules, simplifying exempt-or-not-exempt decisions, go into effect on Monday, August 23. Jeff Joerres, chairman, president and chief executive officer of Manpower, tells the Milwaukee Journal Sentinel that the new rules are simpler than the current regulations. “It’s a good thing overall,” he says. “It makes the law much clearer and simpler. From that perspective, it will make life a little easier for us.”