Category Archives: Compensation

QCEW State and County Map Application

Source: Bureau of Labor Statistics (BLS), Quarterly Census of Employment and Wages, 2011

The Bureau of Labor Statistics (BLS) has developed an interactive state and county map application. The application displays geographic economic data through maps, charts, and tables, allowing users to explore employment and wage data of private industry at the National, State, and county level. Throughout this application, URLs are specific to the data displayed, so links can be bookmarked, reused, and shared. The application includes maps, charts, tables, and a link to standard BLS data tables and graphs.

Map features
Chart features
Table features
Contact information

Public Sector Compensation: Panacea or Pandora’s Box

Source: Rollie Waters and TL Cox, Public Management, Vol. 93 no. 10, November 2011
(subscription required)

The salaries and benefits of public employees, when compared with the private sector, have always been under a microscope and scrutinized by citizens, elected officials, and the media. Stakeholders are challenging the equity of local government’s pay systems when compared with the private sector. Managers need practical tools in place to ensure that elected officials and staff are following best practices and pay policies that are in the best interest of the constituents served. …This article attempts to highlight key areas for action in order to ensure basic compliance with acceptable compensation practices. Traditional approaches are explained as well as the roles of the manager and elected officials. First, however, it is necessary to understand the basics of a sound compensation system prior to discussing emerging technologies.

Comp Doctor: Step Pay Plans and Pay for Performance. Are they compatible?

Source: Jim Fox and Bruce Lawson, International Public Management Association for Human Resources (IPMA), Vol. 77 no. 10, October 2011
(subscription required) (scroll down)

Question: Our board is interested in adopting a pay for performance pay system. However, we have a step plan that has been in place for years and
I have heard that we would need to replace our step plan with a pay plan
that would work with pay for performance. I am not sure the board under-stands the issues and the amount of change that we would have to go through so that we can have an effective pay for performance system. Can we adopt pay for performance without changing our step plans?

80 Ways To Reduce Expenses

Source: Michael Mahoney, John Crossley,, September 1, 2011

This is the first installment of a four-part series that will explore 80 ways to reduce operating expenses. In these difficult economic times, these ways could be the difference between having a profitable year and one of significant financial loss. After all, every dollar of reduced operating expense goes straight to the bottom line of an annual profit-and-loss statement. Take these suggestions at face value, or modify them for your agency. Either way, please take a look. Shaving a few dollars here and there might just save a job.
See also:
Part 1 Labor
Part 2 Equipment and supplies
Part 3 Contracts
Part 4 Utilities and equipment

Towards a Sustainable Economic Recovery: The case for a wage-led policies

Source: International Journal of Labour Research, Vol. 3 no. 2, 2011

This issue of the International Journal of Labour Research addresses a central issue, if not the key issue for the labour movement, that of wages and what has happened to them over the past three decades.
Articles include:
– Wage-led growth: An introduction by Engelbert Stockhammer
– Leveraging inequality by Michael Kumhof and Romain Rancière
– The productivity and investment effects of wage-led growth by Servaas Storm and C.W.M. Naastepad
– The economics of wage-led recovery: Analysis and policy recommendations by Thomas Palley
– The impact of the crisis on labour relations and collective agreements in Greece by Yannis Kouzis

Employees in Postsecondary Institutions, Fall 2010, and Salaries of Full-Time Instructional Staff, 2010-11

Source: Laura G. Knapp, et. al., U.S. Department of Education, Institute of Education Sciences, National Center for Education Statistics, NCES 2012276, November 2011

From the summary:
This First Look presents data from the Winter 2010-11 Integrated Postsecondary Education Data System (IPEDS), including data on the number of staff employed in Title IV postsecondary institutions in fall 2010 by primary function/occupational activity, length of contract/teaching period, employment status, salary class interval, faculty and tenure status, academic rank, and gender.

CEO Bonus Plans: And How to Fix Them

Source: Kevin J. Murphy, Michael C. Jensen, Harvard Business School Working Paper, Number: 12-022, October 2011

From the summary:
Discussions about incentives for CEOs in the United States begin, and often end, with equity-based compensation. After all, stock options and (more recently) grants of restricted stock have comprised the bulk of CEO pay since the mid-1990s, and the changes in CEO wealth due to changes in company stock prices dwarf wealth changes from any other source. Too often overlooked in the discussion, however, is the role of annual and multiyear bonus plans–based on accounting or other non-equity-based performance measures–in rewarding and directing the activities of CEOs and other executives. In this paper, Kevin J. Murphy and Michael C. Jensen describe many of the problems associated with traditional executive bonus plans, and offer suggestions for how these plans can be vastly improved. The paper includes recommendations and guidelines for improving both the governance and design of executive bonus plans and, more broadly, executive compensation policies, processes, and practices. The paper is a draft of a chapter in Jensen, Murphy, and Wruck (2012), CEO Pay and What to Do About it: Restoring Integrity to both Executive Compensation and Capital-Market Relations, forthcoming from Harvard Business School Press.

Key concepts include:
• While compensation committees know how much they pay in bonuses and are generally aware of performance measures used in CEO bonus plans, relatively little attention is paid to the design of the bonus plan or the unintended consequences associated with common design flaws.
• These recommendations for improving executive bonus plans focus on choosing the right performance measure; determining how performance thresholds, targets, or benchmarks are set; and defining the pay-performance relation and how the relation changes over time.
• In the absence of “clawback” provisions, boards are rewarding and therefore providing incentives for CEOs and other executives to lie and game the system. Any compensation committee and board that fails to provide for the recovery of ill-gained rewards to its CEO and executives is breaching another of its important fiduciary duties to the firm.

Gender Pay Differences: Progress Made, but Women Remain Overrepresented among Low-Wage Workers

Source: U.S. Government Accountability Office, GAO-12-10, October 12, 2011

From the summary:
Women represent an increasingly larger share of the total workforce in the United States–constituting nearly half of the total workforce. In addition, an increasing proportion of women in the workforce are more educated. However, research by GAO and others has shown that women’s average pay has been and remains lower than that of men. Questions have been raised about the extent to which less-advantaged women–that is, those who are low wage or less educated–experience lower wages than less-advantaged men. GAO was asked to examine the differences in representation, key characteristics, and pay among women and men (1) with less education and (2) with low wages. GAO defined less-educated workers as those having a high school degree or less and low-wage workers as those earning an hourly wage rate in the bottom quintile–or 20 percent–of wages across the workforce. GAO analyzed data from the Department of Labor’s Current Population Survey (CPS); reviewed other work on similar topics; and interviewed agency officials, representatives of women’s groups, and other researchers.

Comparing Wealth in Retirement: State-Local Versus Private Sector Workers

Source: Alicia H. Munnell, Jean-Pierre Aubry, Josh Hurwitz, and Laura Quinby, Center for Retirement Research at Boston College, SLP#21, October 2011

From the abstract:
The compensation of public employees is a hot topic in the wake of the financial crisis. Funded levels of public pension plans declined sharply at the same time that state and local revenues collapsed. As a result, plan sponsors in most states are looking for ways to reduce pension costs. The assumption – either explicit or implied – is that pensions are too generous. Pensions, of course, are just one part of compensation, so any comparison must also consider wages and other benefits. The question of comparability of compensation in the state-local and private sectors was the focus of a recent Issue in Brief. The conclusion was that wages for workers with similar characteristics, education, and experience were higher in the private sector than the public, but benefits for state-local workers roughly offset the wage penalty. Taken as a whole, compensation in the two sectors is roughly comparable.

Comparing Compensation: State-Local Versus Private Sector Workers

Source: Alicia H. Munnell, Jean-Pierre Aubry, Josh Hurwitz, and Laura Quinby, Center for Retirement Research at Boston College, SLP#20, September 2011

From the abstract:
The comparability of state-local versus private sector pay has become a major issue in the wake of the financial crisis. Funded levels of public pension plans declined sharply, and governments’ ability to make required contributions has been severely constrained by the collapse of state-local budgets. Politicians everywhere are looking for ways to reduce pension costs and increase revenues. Often such efforts are couched in terms of excessively generous existing compensation – especially, current pensions. Dueling studies have appeared arguing that state-local workers are paid less or more than their private sector counterparts. Virtually all agree that wages of state-local employees are lower than for private sector workers with similar education and experience, but researchers differ on the extent to which pensions and other benefits compensate for the shortfall. This brief builds on the recent wave of studies by refining the estimates of the value of benefits.