April 12, 2004

Changes to the Astron Team

John Sazaklis joined the Astron team last Monday as our new Automation Expert!  In his role, John will create automated solutions to fill clients' HR needs, including custom programming for EasyEval installations.  John is also Astron's webmaster.

Prior to Astron, John worked for TNT Consulting, Inc., performing web and network consulting services.  John holds a Computer Science BS degree from C.W. Post University.

You can reach John at jesazaklis@astronsolutions.com, 800-520-3889 x6, or 646-792-2516.  Welcome aboard John!

In other news, Jason Mitchell has been promoted to Statistics and Programming Coordinator.  Jason will undertake project management responsibilities during EasyEval installations, custom compensation and benefits surveys, and other compensation projects.  Congratulations, Jason!

Last Chance to Dance - Master Group Forum 2004

We know you're out there...why haven't we heard from you yet? 

It's time for you to register for the 2004 edition of the Master Group Forum!  The Master Group Forum is a great opportunity for you to hear about the latest in compensation, proactively learn critical information about the new FLSA regulations, and discover solutions to your thorny HR issues.  Not only will you network with other HR professionals, you'll come away with the tools you need to make a positive difference in your organization, earn 2.0 HRCI recertification credit hours, and enjoy our delicious signature breakfast to boot!

Click here to download the registration form.  For more information, contact Sharon Terry at 800-520-3889 x4.

Seating is limited.  Your registration form must be received by April 20, 2004 to secure your place.

What Do I Do With Red Circled Employees?

The Red Circle... it's not just an obscure 2003 French film, but is something that may be affecting your employees' salaries and future. When it comes to a "red circled" employee, the situation could be more dramatic than the plot of any movie.

When an employee salary has been "red circled," it means that its rate has been frozen at the maximum wage determined for the position. This is based on what the market will bear. The position is considered "topped out" at a specific salary, and the employee is then ineligible for future pay increases, including service based, performance based, or general salary increases. Many times, this happens to a dedicated, long-term employee who has reached the maximum salary level through years of raises. This can present a predicament for employers who want to continue to reward and retain the "red circled" employee.

The first step should be to take a look at the salary range to see if it's still appropriate. At times, there are certain high-demand skills that employees encompass that deserve to be rewarded according to the market-based pay standard. A special, non-permanent adjustment can be made to the employee’s salary in accordance to these special skills.

If the employee is a star performer, consider paying a lump sum or offering extra time off in lieu of a salary increase. It should be noted that there are certain FLSA issues with paying a lump sum or offering extra time for non-exempt employees. Both can be viewed as part of the employee's wage and because of that, there can be overtime implications. In addition, if you provide a lump sum to an exempt employee and the amount is calculated on actual hours worked, you can run the risk of losing the FLSA exemption for the position. For more information on this topic, check out these three articles from our archive: 1, 2, and 3.

However, if neither situation applies, you may want to consider no increase at all, since the individual is already paid above the standard for the position.

Another option, as Astron Solutions consultants have recommended to numerous clients in compensation audits, is to institute a temporary "Over Range Maximum" bonus to be phased out over a three-year period:

• Year One – The pay adjustment is to be paid as a flat dollar amount, and divided equally each pay period over a year. Employees near the maximum would receive the amount remaining after the maximum is met.
• Year Two – The amount in Year One is reduced by 50%.
• Year Three – The "Over Range Maximum" bonus is eliminated.

Astron Solutions' client work reveals that in some organizations, a large percentage of employees are more than 50% above the minimum of the range of pay for their jobs. This is due to the fact that many organizations are choosing not to cap employees' salaries at the maximum of the pay range. Unfortunately, this can present a host of other problems:

• By not limiting base pay within a defined pay range, the exercise of setting job value is irrelevant.
• It sends a message to the employee that individual tenure, rather than job performance or the value of the job itself, is what is important.
• The ability of the organization to control their salary expense is eliminated.

There are steps that can be taken to avoid "red circling." Employers can strengthen and increase the responsibilities and duties of a position so that salary increases would be warranted. If possible, employers should offer tuition reimbursement to "red circled" employees to learn new skills, and add credentials, in order to increase their value.

How many of your employees are red circled?  Be sure to vote in this week's on-line poll!

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.

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

Copyright 2007, Astron Solutions, LLC

ISSN Number 1549-0467