Compensation is a never-ending concern for both employees and employers. Several surveys conducted by compensation and benefits association WorldatWork reveal a few trends for 2002.
Stock still an option
Instead of providing stock options to all employees, employers are now tying grants to individual performance. Approximately 67 per cent of the 300 North American companies surveyed in the recent WorldatWork electronic survey, The State of Stock Options 2002, said individual performance is a factor when considering whether an employee is eligible for option grants. More than 30 per cent of respondents said performance-based options has been the biggest change in their option plan in the last few years.
“Companies are rethinking how to gain value from the options that they provide, and how to deliver options to those who most deserve them,” said Gerry Ledford of Sibson Consulting, a management consulting firm that conducted the survey with WorldatWork.
The survey investigates the changes in stock options from the year 2000 to 2002, and it takes into account the drop in the stock market and accounting scandals, which have affected stock option practices. Overall, respondents reported that these major economic and political events had little effect on stock option objectives and participation. In fact, 83 per cent said the Enron scandal was not the reason for their change in option plans. They also said the dot-com crash (81 per cent) and possible changes in international accounting standards (78 per cent) did not influence option decisions either.
“It is encouraging that companies are not making hasty decisions about their option plans in light of the current environment,” said Kay Sandvik-Schmitke, manager of surveys and research for WorldatWork.
Referral bonuses
With last year’s turbulent times, it was expected North American companies would severely cut employee benefits and rewards, but despite the economic slowdown corporations are still handing out cash to employees for helping find new recruits.
About 59 per cent of respondents to the WorldatWork March 2002 Survey said they have a referral bonus program which rewards staff for bringing in new employees, and the 14 per cent that didn’t have a referral bonus program said they are considering implementing one.
To Sandvik-Schmitke, the results were a bit of a surprise.
“I was figuring that companies would cut back,” she said. “Even with all the belt-tightening that’s been going on… it doesn’t appear that this is a popular item to cut. Companies today realize how important it is to both preserve and build human capital in good times and bad.”
The payouts are quite generous too. The majority of companies surveyed offered employees an award of $1,000 (US) to $5,000 for a hired referral. Around 10 per cent reported an award of more than $5,000 when an executive is hired.
Organizations are changing their tune and increasing the bonus for executive referrals as compared to previous years, said Sandvik-Schmitke. “(Referrals are) a lot less costly than bringing in a headhunter or recruitment firm.”
To know is to understand
Usually management is very “hush-hush” about salary, pay increases, bonuses and most importantly pay cuts. However, a recent study, Knowledge of Pay, shows that if more employers are open with staff about these topics, it can help ease employee concerns. Increased openness about pay plans can create higher trust in management, and stronger employee commitment and retention, according to the survey sponsored by WorldatWork and conducted by The LeBlanc Group.
More than 6,000 managers and employees from 26 companies across North America were surveyed and the results indicate a direct correlation between an employee’s knowledge around pay and their satisfaction with pay.
“Management has tended to say less about how pay decisions are made to protect the amount of discretion and judgement that is often involved,” said report author Peter LeBlanc. “However, some employers that are being intelligently open about pay are building a stronger bond with workers and managers alike.”
While some employees were satisfied with their base pay level, many were dissatisfied with the pay process, a link that could be related to lack of communication. About 50 per cent of the survey participants agreed pay programs are “taboo” and not to be discussed at their company.
The report suggests that higher levels of knowledge about total pay, base pay and access to pay information all showed strong positive correlations with pay satisfaction.
Stock still an option
Instead of providing stock options to all employees, employers are now tying grants to individual performance. Approximately 67 per cent of the 300 North American companies surveyed in the recent WorldatWork electronic survey, The State of Stock Options 2002, said individual performance is a factor when considering whether an employee is eligible for option grants. More than 30 per cent of respondents said performance-based options has been the biggest change in their option plan in the last few years.
“Companies are rethinking how to gain value from the options that they provide, and how to deliver options to those who most deserve them,” said Gerry Ledford of Sibson Consulting, a management consulting firm that conducted the survey with WorldatWork.
The survey investigates the changes in stock options from the year 2000 to 2002, and it takes into account the drop in the stock market and accounting scandals, which have affected stock option practices. Overall, respondents reported that these major economic and political events had little effect on stock option objectives and participation. In fact, 83 per cent said the Enron scandal was not the reason for their change in option plans. They also said the dot-com crash (81 per cent) and possible changes in international accounting standards (78 per cent) did not influence option decisions either.
“It is encouraging that companies are not making hasty decisions about their option plans in light of the current environment,” said Kay Sandvik-Schmitke, manager of surveys and research for WorldatWork.
Referral bonuses
With last year’s turbulent times, it was expected North American companies would severely cut employee benefits and rewards, but despite the economic slowdown corporations are still handing out cash to employees for helping find new recruits.
About 59 per cent of respondents to the WorldatWork March 2002 Survey said they have a referral bonus program which rewards staff for bringing in new employees, and the 14 per cent that didn’t have a referral bonus program said they are considering implementing one.
To Sandvik-Schmitke, the results were a bit of a surprise.
“I was figuring that companies would cut back,” she said. “Even with all the belt-tightening that’s been going on… it doesn’t appear that this is a popular item to cut. Companies today realize how important it is to both preserve and build human capital in good times and bad.”
The payouts are quite generous too. The majority of companies surveyed offered employees an award of $1,000 (US) to $5,000 for a hired referral. Around 10 per cent reported an award of more than $5,000 when an executive is hired.
Organizations are changing their tune and increasing the bonus for executive referrals as compared to previous years, said Sandvik-Schmitke. “(Referrals are) a lot less costly than bringing in a headhunter or recruitment firm.”
To know is to understand
Usually management is very “hush-hush” about salary, pay increases, bonuses and most importantly pay cuts. However, a recent study, Knowledge of Pay, shows that if more employers are open with staff about these topics, it can help ease employee concerns. Increased openness about pay plans can create higher trust in management, and stronger employee commitment and retention, according to the survey sponsored by WorldatWork and conducted by The LeBlanc Group.
More than 6,000 managers and employees from 26 companies across North America were surveyed and the results indicate a direct correlation between an employee’s knowledge around pay and their satisfaction with pay.
“Management has tended to say less about how pay decisions are made to protect the amount of discretion and judgement that is often involved,” said report author Peter LeBlanc. “However, some employers that are being intelligently open about pay are building a stronger bond with workers and managers alike.”
While some employees were satisfied with their base pay level, many were dissatisfied with the pay process, a link that could be related to lack of communication. About 50 per cent of the survey participants agreed pay programs are “taboo” and not to be discussed at their company.
The report suggests that higher levels of knowledge about total pay, base pay and access to pay information all showed strong positive correlations with pay satisfaction.
