Mercer’s research reveals that:

• U.S. employers held cost growth to 5.5 percent in 2009, the lowest increase in a decade.

• Growth in the use of wellness or health management programs accelerated as large employers looked to hold down cost without cost-shifting.

• Small employers added consumer-directed health plans in 2009, helping to push up enrollment in these high-deductible plans to 9 percent of all covered employees.

Similar cost growth is expected in 2010, according to Mercer’s National Survey of Employer-Sponsored Health Plans. Employers predicted that medical plan cost would rise by about 9 percent in 2010 if they simply renewed their current plans without making any changes. However, they hope to achieve about a 6 percent increase after making changes to plan design or changing plan vendors.

 Information supplied by the Society for Human Resource Management.

Creating and managing a principled compensation program that rewards desired behaviors and outcomes and offers market-driven compensation levels to attract and retain talent should be the responsibility of an organization not the federal government.  Federal mandates satisfy the needs of small thinkers to be consistent and treat all entities and all people the same.  This is the road to mediocrity, stagnation, malaise and eventual failure. 

The pendulum is swinging left. 

All the discussion about “we must reduce costs” is more hype than reality.  As a genetically produced “cost cutter” — it is in my blood and a former industrial engineer — I don’t think it is realistic to pretend that costs will go down.  We can always keep costs in check and be efficient, but go down – no.  I know with the increasing of the older population (us boomers) and the wonderful advancements in medical research and applications –  there will be NO bending of the cost curve.   It is a cost / expense that is worthy of being paid and we must budget and plan for it and not lie about it.  We’re not ostriches. 

And, one last thing — kudos to ALL the health care professionals who take care of us!  

Bottom Line:  the new law will not drastically alter the existing workplace landscape — it will reflect what employers are already doing.     

Organizations need to consider many, but four main, factors in determining their compensation levels and practices:  1.  Performance — of the individual, team and organization; 2.  Internal equity — people doing similar work with similar qualifications need similar pay (it’s the law!); — 3.  External competitiveness — don’t stray too far away from the market or you’ll have trouble recruiting and retaining; 4.  and, as the study discovered, the ability of the organization to pay.  

If the company is struggling, not profitable, or the market is squishy  – employers should not enter into long term contracts promising higher pay and expensive benefits. 

The successful employee pay formula:  1.   rewards performance, 2.  is fundamentally fair and immaculately legal, 3.  recognizes external market conditions and 4.  is prudent and practical based on their own ability to pay.

(The statistics from the Mercy study are from an article by Stephen Miller from SHRM.)

To get help setting up a Successful Pay Plan with the Four Square Legs — call Karla at Wright Consulting.       

Begin the handbook with a welcoming statement to build a positive culture.  Keep legalistic words (such as:  whereas and forthwith and furthermore) out of the handbook.  Instead of listing all the do nots, describe the expectations and what ”to do”.  For any list of “do nots” there will always be another behavior, not on the list, that will inevitably surface, making the ”do not” list moot (sorry for the legal term).  Carefully choose words to avoid the “we vs them” culture. 

There should be clearly stated expectations against harassment and discrimination and also established steps to follow.  Good guidelines exist for this language.  However, the policy and procedures against harassment and discrimination should be kept in perspective.  Handbooks with many pages dedicated to this subject send the message “wow, this company has a problem”.  Be clear, be concise, be legal, be kind. 

Be careful when adding new wording for new laws.  A hastily slapped together and lengthy policy will stand out like a sore thumb and gives an impression that this is the MOST important policy.  Weave new policy generated by new laws in with other policies and practices. 

Supervisors like lists of actions subject to discipline; and they mistakenly think it will make their job easier.  It won’t.  Resist the list! 

Finally, don’t say you’re going to do something and then not do it.  If in doubt, leave it out.   Use words like “intend” or “may” to allow flexibility.  Arbitrary inconsistencies are bad, but the reality is there will always be the need for exceptions and flexibility.  Don’t mistake treating everyone exactly the same, regardless of circumstances, with fairness.  Fairness requires discernment and judgement.  Hard and fast rules with no room for recognizing the exception lead to trouble more often than not.  Managing from the heart will result in fairness; managing from the book will result in losing the good employees.  The fair manager will eventually have to say “no” to one to be fair to all.    

Contracts do have their place when two parties do not trust each other or do not know each other.  The handbook should be a communication tool that sets expectations, estalishes positive relations and builds trust.

The rule of thumb is for every fifty words of policy, there is one loophole.  So don’t try to build the perfect document with MORE words.  Build a document that sets standards and expectations, gives good guidelines and practical steps and information, sets a tone for a positive, respectful working environment for all and treats adults as adults — not felons or children.   

Bottom line, edit your handbooks for tone as well as for words.  Would an employee read the document and feel like a team member or would an employee read the document and feel like they need a lawyer?      

Workplace stress causes employee health disorders and increased accidents and mistakes at work.  Stress-related dysfunctional behaviors cause anxiety among coworkers resulting in disciplinary action, lowered productivity, contagious discontent among the workforce, and even violence.  These are high costs for employees and employers.

When practical, employers should consider offering additional self-care training and work life balancing seminars.  Perhaps some much needed downtime and fun get-togethers could help.  Offering alternative and flexible work schedules and offering an “extra” paid holiday to just ease the load and tension and show appreciation could be tried.  Communication is always key though to ensure employees know what the company is planning and the realities.  A company blog with employee feedback allows information to flow both ways.   

EAPs have been shown to be a worthwhile investment for employers.  In today’s uncertain climate, employees can seek assistance through EAPs for not only behavioral health issues but also for seeking financial, family counseling, stress mitigation support, improved work life balancing and planning and learning to deal with uncertainty. 

Many of the above ideas came from SHRM News.   

Yesterday is history

Tomorrow is a mystery

Today is a gift

That’s why it’s called the present.