Category Archives: Compensation

Bosses Are Turning Poverty-Wage Workers Into ‘Managers’—and Barring Them From Overtime in the Process

Source: Michelle Chen, In These Times, May 18, 2015

If you’re one of the millions working in retail, some days you might work late at the register or do the store opening in hopes of clocking a little overtime pay. And you might hope to eventually rise to a higher-ranked managerial position. But did you know that promotion might just mean a smaller paycheck for the same job?

Welcome to the promotion from hell: Federal law says time-and-a-half is for ordinary laborers, and management is exempt from overtime provisions. So congratulations, as a shop “manager,” you no longer qualify for overtime—but still end up doing basically the same work for less….

Executive PayWatch 2015

Source: AFL-CIO, 2015

From the blog post:
CEOs of the nation’s largest corporations received a 16% pay raise in 2014, and the pay gap between CEOs and the typical worker widened to 373-to-1, according to the latest data from the AFL-CIO Executive PayWatch. Top executives of the Standard & Poor’s 500 Index companies received, on average, $13.5 million in 2014, even as the average production and nonsupervisory worker earned only $36,000 in annual salary in 2014. … The Executive PayWatch is the most comprehensive searchable online database tracking the excessive pay of CEOs of the nation’s largest companies. The website offers visitors the ability to compare their own pay to the pay of top executives, highlights the 100 top-paid CEOs and breaks out CEO pay data by state and by industry. The site also tracks and grades votes cast by 106 of the largest mutual fund families on executive compensation at the public companies they invest in. Mutual funds own more than one-fifth of all shares in U.S. public companies, giving them a great deal of influence in determining executive pay at these companies. ….
AFL-CIO: CEOs make 373 times more than workers
Source: Matt Krantz, USAToday May 13, 2015

The Definition of Work and When Health Care Benefits Vest

Source: Harold M. Brody and Cody S. Lonning, Employment Relations Today, Volume 42 Issue 1, Spring 2015
(subscription required)

This term, the Supreme Court’s docket includes several employment-law cases that are significant for employers. This article highlights two. In Integrity Staffing Solutions, Inc. v. Busk, the Court attempted to clarify the definition of compensable work. In M&G Polymers USA, LLC v. Tackett, the Court resolved a circuit split over the vesting of health care benefits in collective bargaining agreements.

State Economic Monitor

Source: Urban Institute, Last Updated April 2015

The State & Local Finance Initiative’s State Economic Monitor tracks and analyzes economic and fiscal trends at the state level. Its interactive graphics highlight particular differences across all 50 states and the District of Columbia in employment, wages, housing, and taxes.

Each section is updated when new data are released. The US Bureau of Labor Statistics updates the “Employment” and “Wages” data monthly. The Federal Housing Finance Agency updates the “Housing” data quarterly, and the US Census Bureau updates the “Taxes” data quarterly.

Executive Compensation: A Modern Primer

Source: Alex Edmans, Xavier Gabaix, National Bureau of Economic Research (NBER), NBER Working Paper No. 21131, April 2015
(subscription required)

This article studies traditional and modern theories of executive compensation, bringing them together under a unifying framework. We analyze assignment models of the level of pay, and static and dynamic moral hazard models of incentives, and compare their predictions to empirical findings. We make two broad points. First, traditional optimal contracting theories find it difficult to explain the data, suggesting that compensation results from “rent extraction” by CEOs. In contrast, more modern theories that arguably better capture the CEO setting do deliver predictions consistent with observed practices, suggesting that these practices need not be inefficient. Second, seemingly innocuous features of the modeling setup, often made for tractability or convenience, can lead to significant differences in the model’s implications and conclusions on the efficiency of observed practices. We close by highlighting apparent inefficiencies in executive compensation and additional directions for future research.

Low-Wage Work in California: 2014 Chartbook

Source: UC Berkeley Center for Labor Research and Education, 2015

From the press release:
Over the past 35 years, California’s high-wage workers have seen steady increases in their paychecks. But low-wage workers, 4.8 million strong and about one-third of the state’s workforce, earned less in inflation-adjusted dollars in 2014 than they did in 1979, according to a new analysis from UC Berkeley. …. The researchers published their analysis in chart form in Low-Wage Work in California: 2014 Chartbook, the first edition of an ongoing resource with a wide range of information about low-wage workers, their families and their jobs. The chartbook will be updated annually as new census data becomes available. ….

2015 private duty benchmarking study

Source: Home Care Pulse, LLC, April 2015
(purchase required)

From the PHI abstract:
Presents the results of a survey of administrators from more than 700 private home care agencies, who were asked about home care trends that are affecting their profitability. More than 60 percent of respondents identified “caregiver shortages” as one of their top three “threats to the future growth of [their] business in 2015.” The survey also includes data on worker turnover, retention, and wages.
SURVEY: Home Care Worker Turnover Topped 60 Percent in 2014
Source: Matthew Ozga, Paraprofessional Healthcare Institute (PHI) blog, April 28, 2015

More than 60 percent of caregivers working for private duty home care companies quit or were fired from their jobs last year, according to the 2015 edition of the Private Duty Benchmarking Study. …

Performance-Related Pay and the Crowding Out of Motivation in the Public Sector: A Randomized Field Experiment

Source: Nicola Bellé, Public Administration Review, Vol. 75 Issue 2, March/April 2015
(subscription required)

From the abstract:
This article advances our understanding of the effects of monetary rewards on public employee performance and of the contingencies that may moderate these effects. In a randomized control-group experiment with nurses working at a local health authority in Italy, performance-related pay (PRP) had a larger effect on task performance when the rewards were kept secret than when they were disclosed. The negative interaction between PRP and visibility was stronger among participants who were exposed to direct contact with a beneficiary of their efforts, which heightened their perception of making a positive difference in other people’s lives. These results are consistent with theoretical predictions that monetary incentives for activities with a prosocial impact may crowd out employee image motivation. There were no crowding-out effects when a symbolic reward was substituted for the monetary incentive.

Large Performance Incentives Had The Greatest Impact On Providers Whose Quality Metrics Were Lowest At Baseline

Source: Jessica Greene, Judith H. Hibbard and Valerie Overton, Health Affairs, Vol. 34 no. 4, April 2015
(subscription required)

From the abstract:
This study examined the impact of Fairview Health Services’ primary care provider compensation model, in which 40 percent of compensation was based on clinic-level quality outcomes. Fairview Health Services is a Pioneer accountable care organization in Minnesota. Using publicly reported performance data from 2010 and 2012, we found that Fairview’s improvement in quality metrics was not greater than the improvement in other comparable Minnesota medical groups. An analysis of Fairview’s administrative data found that the largest predictor of improvement over the first two years of the compensation model was primary care providers’ baseline quality performance. Providers whose baseline performance was in the lowest tertile improved three times more, on average, across the three quality metrics studied than those in the middle tertile, and almost six times more than those in the top tertile. As a result, there was a narrowing of variation in performance across all primary care providers at Fairview and a narrowing of the gap in quality between providers who treated the highest-income patient panels and those who treated the lowest-income panels. The large quality incentive fell short of its overall quality improvement aim. However, the results suggest that payment reform may help narrow variation in primary care provider performance, which can translate into narrowing socioeconomic disparities.
The Limits of Pay-for-Performance
Source: Commonwealth Fund, Q&A, April 2015

“Right-to-Work” States Still Have Lower Wages

Source: Elise Gould and Will Kimball, Economic Policy Institute, Raising America’s Pay, Briefing Paper #395, April 22, 2015

From the introduction:
Wages in “right-to-work” (RTW) states are 3.1 percent lower than those in non-RTW states, after controlling for a full complement of individual demographic and socioeconomic factors as well as state macroeconomic indicators. This translates into RTW being associated with $1,558 lower annual wages for a typical full-time, full-year worker.