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2nd Quarter 2014 | Volume 23 | Number 2
Compensation Annexation: The Redeployment of Salary Budget Dollars Across Employees to Support Business Transformation
By Theodore E. Weinberger, Insperity Inc.
The notion that companies would ever reduce the current salary rates of employees in some jobs in order to finance the rate increases of employees in other jobs is nearly unthinkable. However, in the future, companies may be compelled to radically, and abruptly, alter the composition of salary rates across employees in response to unforeseen market events or to support new strategic initiatives. Within any given company, it stands to reason that those jobs associated with the least adaptive products or services will experience stagnant or diminished demand for labor. Therefore, it would be economically inefficient for a company to allocate the same ration of salary budget dollars to these jobs. This article explains that salary dollars could be transferred from employees in the less to the more strategically central jobs as long as rates are maintained within a lower bound of market competitiveness.
How to Maximize the Value of Evidence-Based Decision Making and Minimize the Costs
By Steve Werner, Ph.D., University of Houston
Evidence-based management can be a great tool for compensation professionals, but like any tool, can help the user achieve impressive accomplishments or do major damage. The benefits of using evidence-based management can be maximized by using evidence that is high quality, consistent, timely and valuable. Further, the costs in time, money and poor decisions due to evidence-based management can be minimized by using unbiased, easily consumable evidence that is applicable to a business and context while being mindful of unintended consequences.
Is Full Funding of Public Pension Plans Necessary?
By John G. Kilgour, Ph.D., California State University, East Bay
This article traces the evolution of the full-funding standard in the private sector and its migration to the public sector via accounting and reporting rules. While it is needed in the private sector to protect the federal Pension Benefit Guaranty Corp. from having to take over pension plans with large unfunded vested liabilities, there is no such need in the public sector. Rather, the full-funding standard contributes to state and local government budgetary problems. Required pension contributions are countercyclical. As financial markets decline, required contributions increase just as other recession-linked costs increase too. This article recommends an alternate approach.
Addressing New Sales Roles
By Michael Vaccaro and Tom Hill, Hay Group
There is an ongoing evolution of traditional sales roles into a broad range of new roles and responsibilities. These new roles can support more sophisticated market strategies that are better aligned with customer segmentation and buying preferences while leading to a more cost-effective use of talent and resources. This article describes ways to modify human capital management processes to meet the challenges of an evolving sales function.
How Health-Care Reform Will Affect Total Rewards
By Laurie Bienstock, Jill Havely and Jane Jensen, Towers Watson
Employers cannot delay making important decisions about health-care benefits, especially with less than a year until the Patient Protection and Affordable Care Act's (PPACA) employer mandate takes effect. Their decisions for both the near and long term will affect the rewards program, the employee value proposition and, ultimately, the organization's ability to thrive. Research and author experience show that some organizations are starting to recognize that their response to health-care reform will be more effective if they consider total rewards as they make benefits decisions.
Analyzing the Private-Exchange System in U.S. Health Care: Waves of Accountability
By Tracy Watts, Mercer
There is no question the landscape has changed significantly for U.S. health care following the Patient Protection and Affordable Care Act (PPACA). One interesting new development that has the potential to keep rising costs from skyrocketing for employees is the emergence of private exchanges. Private exchanges allow employers to offer PPACA-compliant health insurance with a new efficiency, providing access to a range of health plans along with a full suite of traditional (e.g., medical, vision, dental) and supplemental benefits. Meanwhile, the private-exchange mechanism can greatly facilitate the transition to a defined contribution model for benefits, while empowering employees to build their individual benefit risk portfolios. This article examines the private-exchange system and looks at the accountability that goes with this new system.
Published Research in Total Rewards