Category Archives: Compensation

Openings for State Jobs Are Up, So Why Are Applications Down?

Source: Katherine Barrett & Richard Greene, Governing, March 25, 2019

A new study shows the depth — and the root causes — of the public sector’s workforce problem.

– A National Association of State Chief Administrators survey shows that state government job postings rose 11 percent from 2013 to 2017.
– Meanwhile, the number of people applying to state jobs dropped by 24 percent.
– CAOs cited noncompetitive salaries, negative perceptions about public service and insufficient recruitment as reasons.

Related:
Job One: Reimagine Today’s State Government Workforce
Source: Kayla Leslie, National Association of State Chief Administrators, March 2019

From the press release:
U.S. state governments face growing challenges attracting, building and retaining critically important talent and workforce skills, according to new research from the National Association of State Chief Administrators (NASCA) in collaboration with Accenture (NYSE: ACN) and NEOGOV.

Based on surveys of chief administrators and human resource (HR) directors in 33 states, a survey of nearly 3,000 state-government job seekers, and analyses of over 14,000,000 public sector job postings, the research — published today in a report titled Job One: Reimagine Today’s State Government Workforce — shows a widening gap between the number of open jobs and the number of applicants but also highlights strategies to help reverse the trend…..

‘Wage’, ‘Salary’ and ‘Remuneration’: A Genealogical Exploration of Juridical Terms and their Significance for the Employer’s Power to Make Deductions from Wages

Source: Zoe Adams, Industrial Law Journal, Volume 48, Issue 1, 21 February 2019
(subscription required)

From the abstract:
The Supreme Court in Hartley v King Edwards VI College (2017) has confirmed that an employee who refuses to work in accordance with his contract forfeits his right to be paid for the duration of the breach. The decision extends to professional employees paid a periodical salary the principle established in Miles v Wakefield MDC (1987). The present article sheds new light on these decisions by situating them within a broader debate concerning the function of the wage and the proper relationship between work and payment. Drawing on insights from economic theory, and engaging in a genealogical analysis of legal concepts, the article shows how this debate has, over time, conditioned the use of concepts such as the ‘wage’, ‘the salary’ and ‘remuneration’ in legislation and case law concerning deductions. It shows that the legal concept of the ‘wage’ is closely related to the economic idea of the wage as the price of a commodity, while the legal concepts of ‘salary’ and ‘remuneration’ are more closely analogous to the economic idea of the wage as the cost of subsistence. The courts’ tendency to confuse these concepts, and to analyse the employer’s power to deduct as a right to withhold wages for non-performance of the contract, tells us much about the implicit assumptions underpinning cases, such as Miles and Hartley, and how they have shaped the path of the law.

Amid Strikes and Shortages, Governors Prioritize State Workers’ Plight

Source: Katherine Barrett and Richard Greene, Governing, February 25, 2019

Protesting teachers likely won’t be the only public employees who see pay raises and workplace improvements this year. ….

– In their State of the State addresses and executive orders this year, many governors are making public workforce issues a priority.
– They are particularly targeting teachers and corrections staff for pay raises.
– Several governors are focused on fighting sexual harassment and LGBT discrimination in state government…..

Analyzing Change-in-Control Payments Since the Enactment of SayonPay

Source: Mark Siciliano, Compensation & Benefits Review, OnlineFirst, Published January 15, 2019
(subscription required)

From the abstract:
Since the enactment of Say on Pay in January 2011, companies are required to disclose the amounts payable to named executive officers as a results of an acquisition. There have been 1,524 U.S. public takeovers from 2011 to 2017, which have disclosed golden parachute payments to executives. The author describes payments made by sector, payment types, triggering events and the propensity of voters to accept, or reject, golden parachute payments based some of the more concerning pay practices.

Pay for Performance in Modern Compensation Practices

Source: Sanghee Park, OnlineFirst, Compensation & Benefits Review, Published December 28, 2018
(subscription required)

From the abstract:
Although researchers have long discussed the mixed results regarding the effectiveness of pay for performance (PFP), compensation research has not fully captured the complexity of the current PFP environments. Using individual data gathered from diverse organizations through an online survey, this study shows the current status of PFP environments that employees now face within an organization. The theoretical and practical implications for understanding the complex environments in current organizations regarding the effectiveness of PFP plans are discussed. Suggestions for future compensation research are also provided.

Millennial Motivation Issues Related to Compensation and Benefits: Suggestions for Improved Retention

Source: Daniel L. Morrell, Kristie A. Abston, Compensation & Benefits Review, OnlineFirst, Published January 7, 2019
(subscription required)

From the abstract:
Millennials are currently the largest generation at work and will reach an estimated 75% of the labor force by 2025. Studies have shown that millennials hold slightly different attitudes toward work when compared with previous generations. They more readily change jobs and are generally less committed to their organizations, with an estimated 66% of millennial employees planning to leave their current company within 5 years. These differences in work values necessitate changes in current approaches to compensation and benefit packages that would better align with these changing values. The goal of this article is to review recent empirical data on Millennials as compared with previous generations and then offer suggestions for what changes might improve retention.

What labor market changes have generated inequality and wage suppression?

Source: Josh Bivens and Heidi Shierholz, Economic Policy Institute, December 12, 2018

Employer power is significant but largely constant, whereas workers’ power has been eroded by policy actions.

What this report finds: Labor markets in capitalist economies are fundamentally tilted against individual workers’ ability to bargain effectively with employers. Policy does not have to be rigged for employers to give them particular clout in labor markets; instead, the very nature of these labor markets gives them clout. In the past, when economic growth was broadly shared across the population, it was because policymakers understood this basic asymmetry and used policy levers to bolster the leverage and bargaining power of workers. Conversely, recent decades’ rise of inequality and anemic wage growth has resulted from a stripping away of these policy bulwarks to workers’ labor market power.

Why it matters: Recent research on “monopsony power”—the leverage enjoyed by employers to set their workers’ pay—is a valuable contribution to our understanding of the asymmetry inherent in labor markets. However, “monopsony power” is often a confusing term to even the most savvy economic writers and researchers, and too often it is used only to describe markets that are concentrated (i.e., where there are relatively few employers). Market concentration can indeed suppress workers’ wages, but employer power exists even in markets with lots of employers. If only the narrow conception of “monopsony power” is recognized and policymakers focus only on interventions that target the effect of market concentration (antitrust, for example), then other measures that could more effectively restore the balance of power in labor markets might not get the consideration they should.

What can be done about it: There is no one panacea for restoring workers’ leverage and bargaining power in labor markets. Policymakers must be committed to working on every available margin, including restoring genuine full employment as a macroeconomic policy priority; reforming labor law so that workers who want to form a union to collectively bargain to improve their wages and working conditions are able to do so; raising the minimum wage; and strengthening enforcement of labor standards and workplace civil rights laws.