Library

December 22, 2003

Happy Holidays!

Happy holidays from all of us at Astron Solutions! Wishing you the best Christmas, Hanukkah, Kwanzaa, New Year's - whichever holiday or holidays you celebrate! - ever. Be sure to be safe while celebrating.

Thank you for being a part of our extended family. It is an honor to serve you. We look forward to many more years of providing you with the cutting-edge HR information you need to know.

See you in 2004!

Do You Know...

National Director Michael Maciekowich was quoted in the November 2003 issue of Best Practices in Compensation and Benefits, published by Business and Legal Reports (BLR). The front page story, "Generational Differences Require Flexible Rewards," explores the types of rewards attractive to different generations, and what employers are doing to respond to this variety.

Looking Back, Looking Forward: Perspectives on HR After 20 Years in the Field - the 1990s

This issue's article continues the retrospective from the last Astronology. Our tour of the 1990s is written by Michael Maciekowich, National Director.

The 1990s began with the last major employment discrimination law to be signed, the Americans with Disabilities Act (ADA). The ADA changed the way we wrote and administered job descriptions and performance appraisals by realigning our focus on properly defining the essential functions of the job. Inevitably, hiring and performance decisions were linked to these essential functions.

This act created an entire branch of consultancy on job descriptions, performance management redesign, and related management training. It challenged the previous decade's trend towards expansive job descriptions attempting to cover every aspect of the job.

Human Resources now had to face the challenge of working with management on the prioritization of job duties, and to develop summary, essential function-based responsibility statements. Job evaluation plans came under closer review to ensure that jobs were valued based on these essential functions. In addition, job descriptions were audited to ensure that the essential requirements had been properly articulated.

The nineties also saw the publication of a number of influential books. Among them was a book on a major shift in compensation theory, entitled The New Pay, by Jay Schuster and Patricia Zingheim. The publication of The New Pay in 1996 stimulated a shift in contemporary compensation thinking. It described an evolution of compensation programs through five stages:

Stage 1: Centrally controlled pay; merit-based pay adjustments; emphasis on fairness of the pay system.

Stage 2: Pay decentralized to the units; job value totally market-focused; introduction to variable pay.

Stage 3: The importance of communication is emphasized through pay; team measures and rewards are introduced; gain / goal-sharing programs introduced; competency / skill-based pay programs in use.

Stage 4: Pay focused on reinforcing business goals and requirements; people recognized as win-win partners; variable pay is primary performance reward; competency / skill-based pay replaces job-based evaluation; people are more involved in pay design.

Stage 5: Pay becomes customer-focused; team becomes the key organizational unit; variable pay is the primary performance award; team peers urge individual contributions; competency pay dominates individual pay process; people are deeply involved in the process.

Another major work to influence compensation design during the 1990s was the publication of The Balanced Scorecard: Translating Strategy into Action, by Robert Kaplan and David Norton, in 1996. While this work was initially a review of the strategic decisions made by more successful organizations, the theories and concepts quickly found their way into compensation design. In short, The Balanced Scorecard states that all successful companies focus on four key strategic objectives: Financial, Quality, Customer and Growth. Those companies that can keep all four in balance and not emphasize one over the other have both short and long term success. This concept has been adopted in compensation design in job evaluation plans, performance appraisals, and incentive compensation plans.

The 90s also marked the advent of the …for Dummies series, including the Human Resources Kit for Dummies, which provides new or small companies with the basics of human resource management. Books by former CEOs from corporate America emerged, sharing how they were successful in managing people.

The 1990s, like most of the 1980s, had an expanding economy. Unemployment continued to drop to unheard-of levels, while inflation, for the most part, was nonexistent. However, the 90s also saw a dramatic increase in the creation of new jobs linked directly to the technology explosion and the advent of the dot-com phenomenon.

With Microsoft and Apple leading the charge, the shortage of employees in technical positions reached a critical level. With this came the introduction of hiring bonuses and other perquisites to lure employees away. Major corporations were forced to review their total compensation and human resource strategies. Everything from casual dress codes to flex scheduling was introduced.

Because of these shortages, employers were forced to consider whether their employees viewed them as "employers of choice." Fortune Magazine began their annual survey of Best Places to Work. Employee opinion surveys became climate surveys, and employers began focusing on why employees were leaving, which led to more emphasis on the exit analysis process.

From a compensation perspective, all of this emphasis on being viewed as an employer of choice has led to an emphasis on linking employee rewards to the success or failure of the organization through incentives and variable pay.

As we ended the 1990s, the country once again fell into its decennial recession. More than ever, organizations needed to reexamine the effectiveness of traditional merit pay, which, due to the lack of funds, had become more of an entitlement than recognition of performance. In an insecure economic climate, however, there was concern about making financial commitments to the rewards program. As predicted in the beginning of the decade by The New Pay, gain- and goal-sharing incentive plans, self-funded by nature, became the most important methods of rewarding employees.

As regards HR, the 1990s expanded on the philosophical foundation that began in the 1980s. One can only speculate that the 2000s will continue this pattern, but it seems clear from recent client activity that Stage 5 from The New Pay will become the goal for more organizations: customer-focused variable pay emphasizing team activities with more employee involvement.

Reader Poll Archive

Wonder what your fellow readers think about critical HR topics? Is your organization unique from or similar to others?
Click here to view the results of our past polls!

Have a Question?

If you have a topic you would like addressed in Astronology, or some feedback on a past article, don't hesitate to tell us! Simply reply to this e-mail. See your question answered, or comments addressed, in an upcoming issue of Astronology.

Looking for a top-notch presenter for your human resource organization's meeting? Both Jennifer Loftus and Michael Maciekowich present highly-rated sessions on a variety of compensation and employee retention issues. For more information, send an e-mail to info@astronsolutions.com.

Are you reading a pass-along copy of Astronology? Click on this button to start your own subscription today!

Send inquiries to info@astronsolutions.com or call 800-520-3889, x105.

The Fine Print

We hold your e-mail address in trust. Astron Solutions promises never to share or rent your personal information. We also promise never to send you frivolous e-mails and will allow you to leave our list, at your option, at any time.

To remove yourself from this list, please follow your personalized subscriber link at the bottom of your Astronology alert e-mail.

ISSN Number 1549-0467