Top HR Myths Debunked

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Mykkah Herner, MA, CCPDirector of Professional Services

Aubrey BachSr. Manager Consumer Marketing

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15,000 Positions 3,500 Customers 11 Countries

250 Compensable Factors54 Million Salary Profiles

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Agenda

Mykkah to fill in

PresenterPresentation NotesNo one knows exactly where this myth started, but the bestguess is this 1945 recommendation from the National Foodand Nutrition Board, a government advisory agency, thatstated: “A suitable allowance of water for adults is 2.5 litersdaily in most instances. … Most of this quantity is contained inprepared foods.” The theory is that people read this, ignoredthe last sentence, and the eight glasses a day (about 2.5 liters)recommendation was born. Moral of the story? Read ALL thedata, or you may end up peeing every fifteen minutes for therest of your life.Original Source: FiveThirtyEight

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PresenterPresentation NotesThis famous fun-ruining myth is predicated by the idea that,upon eating, most of the available blood in one’s body wouldflood to the stomach to help with digestion. Thus deprivedof proper blood flow, the limbs wouldn’t have enough of theprecious fluid in them to be able to swim. While it’s true thatblood flows to our stomachs after eating a big meal, we haveenough blood to keep all of our other parts running just fineafter a meal. Moral of the story? All this time! All this time, youcould have been swimming.Original Source: How Stuff Works

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PresenterPresentation NotesOh, but you will. In fact, PayScale data found that graduates of the top ten party schools make an average annual salary of $89,950, while graduates of the top ten sober schools make only $84,500 annually. In other words, party school grads were able to parlay their beer pong prowess into an additional $5,450 per year. So much for revenge of the nerds. Moral of the story? TOga, TOga….

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Party Schools CAN Pay Off

Alumni Salaries for Princeton Review’s Top 10 Party Schools

Rank

School name

Median Mid-Career Salary

1

University of Illinois at Urbana-Champaign

$97,700

2

University of Iowa

$80,000

3

University of Wisconsin-Madison

$88,800

4

Bucknell University

$99,600

5

Syracuse University

6

University of California-Santa Barbara

$96,300

7

West Virginia University

$81,500

8

University of Georgia

$83,600

9

Tulane University

$80,1000

10

Colgate University

$115,000

PresenterPresentation NotesSorry kids, bundling up won’t completely prevent youfrom catching a cold. Colds actually have nothing to dowith body temperature. Colds are a virus, which meansthey are contagious. If there are no viruses near you,then you won’t get sick—even if you’re practically in anice box! In fact, avoiding outdoors and staying coopedup indoors with multiple people perspiring germs isMORE likely to give you a cold. Moral of the story: Stopwatching Netflix and go outside.Original Source: Huffington Post

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PresenterPresentation NotesNot true. In 2015, the number one reason most people reported leaving companies is compensation. The majority respondents to the 2015 Compensation Best Practices Reported cited "seeking higher pay elsewhere" as the primary reason for leaving a company. Moral of the story? Money CAN buy you love.

Job meaning. Job satisfaction.

Large org small org comp strategy – and communication

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PresenterPresentation NotesTurkey gets a bad rap as the culprit for all theThanksgiving napping, but your over-eating is actually whatis causing you to drift to dreamland. It’s true that turkeycontains a chemical found in the well-known, sleep-inducingmedicine, Melatonin, but just a smidge. That itty-bitty traceof tryptophan in your drumstick will not cause your snoozing.Stuff your stomach to the gunnels with mashed potatoes,dinner rolls, and booze and a food coma induced snooze isinevitable. If you want to avoid that nap, put down the fork!Or embrace it and be thankful, after all, it is a holiday. Moralof the story: gobble all the turkey you want (get it?!)Original Source: NBC News

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PresenterPresentation NotesIf you aren't talking with employees about pay, chances are that they are talking to one another--creating their own story of your compensation philosophy. Not a good thing. PayScale, the compensation software company surveyed 71,000 employees to study the relationship between pay and transparency. The study found that transparent conversations about money can actually mitigate low pay. So, if an employer pays lower than the market average for a position, but communicates clearly about the reasons for the smaller paycheck, 82% of employees surveyed still felt satisfied with their work.

Intent to stay vs engagement + satisfaction (chart from engagement data)

Reddit example of banning salary negotiations

Comfort talking about pay

Employees who perceive a transparent pay practice have lower intent to leave and higher satisfaction

PERCENT OF RESPONSES

LOW AVERAGE HIGH

50% 31% 19%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

1 2 3 4&5

% Responses with Intent to Leave % Responses with High Satsifaction

PresenterPresentation NotesWe know from our research on engagement that those EE who perceive that the org has a transparent pay practice (High, on the chart) have lower intent to leave and higher satisfaction.

Describe the chart: Blue line is intent to leave, red line is high satisfactionLow = perceive low transparent pay practice, Avg = avg transparency, High = high transparency.Percents show number of responses = low vs avg vs high

It’s not likely that orgs will move from low to high, but we want to encourage you to know what transparency you currently use, and increase that.

PresenterPresentation NotesDESPITE WHAT LOONEY TUNES AND DISNEY’S FERNIDAD THEBULL CARTOONS TAUGHT US, BULLS, AND ALL OTHER TYPESOF CATTLE, ARE ACTUALLY COLORBLIND. A STATIONARYRED OBJECT WON’T ENRAGE THE BULL, BUT WAVING A REDOBJECT WILL. GO AHEAD AND SWAP RED OUT FOR SUNSHINEYELLOW AND YOU WILL STILL GET THE SAME REACTION.IT ISN’T THE COLOR THAT ANGERS THE BEAST, BUT THEANNOYANCE OF WAVING AN OBJECT IN ITS FACE.MORAL OF THE STORY? LOONEY TUNES IS A PACK OF LIES.ORIGINAL SOURCE: LIVE SCIENCE

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Instituting a Pay-for-Performance System Isn’t “Fair”

PresenterPresentation NotesSaying paying for performance isn’t ‘fair’ is like saying winning a gold medal isn’t fair. In a pay-for-performance model, you are recognizing top performers with cash. Take a lesson from Gravity Payments. When everyone's pay is increased or equalized, your top performers won’t consider that fair and they’ll likely take their talents elsewhere. Moral of the story? Go for gold!

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PresenterPresentation NotesOriginal Source: HowStuffWorksTurns out, you can see a lot of man-made objects fromspace—just not the Great Wall of China. In the glow of night,astronauts have seen several iconic structures, but not theGreat Wall. Made of rock, the Great Wall tends to blend inwith the rest of Earth—it’s not quite Vegas.

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Pay for Performance Raises Will Cost Us More Money

PresenterPresentation NotesMykkah

This one’s a little tricky. Pay for performance could cost you more, if you do it wrong. Do it right—aka don’t reward underperforming employees—and it will likely save you money. Awarding your top performers will also reduce your cost of turnover—happy employees don’t leave. Think of it this way, if you don’t pay your top performers what they deserve, your competitor will. Ouch.

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Culture that rewards high performers

Higher pay increases for high performers

Performance-based incentive plan

Performance-based rewards & recognition

PresenterPresentation NotesMykkah

PresenterPresentation NotesNext time you're told 'you're blindas a bat', take it as a compliment.None of the 1,100 species of batsare blind. They actually haverelatively good vision, but are justsensitive to light.Original Source: Discovery

You’reSaving

Money by Underpaying

PresenterPresentation NotesAubrey

Sorry, counting coins and paying pennies didn't work for Scrooge and it won't work for you. Not paying your employees the right way will cause them to leave. As PayScale's compensation best practices report indicates, the #1 reason employees leave is because of pay. The cost of turnover will cost you more than paying right in the first place.

Pay transparency – zeitgeist

Cost of turnover…

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Aubrey

PresenterPresentation NotesAubrey HEY JOY – can you fix this and remove the words?

PresenterPresentation NotesAccording to Scientific American, a penny is too small,too flat, and cushioned by too much air to transforminto a torpedo. Far from bludgeoning your enemiesto death, the actual affect of hitting someone with apenny by dropping it off the top of The Empire StateBuilding would feel like “being flicked in the forehead,but not even very hard,” the article stated.This infoshould surprise no one because, let’s face it, penniesare stupid. They are America’s worst currency. Onthat note, if you want to kill someone with pennies,try paying for your morning latte exclusively withthem, until those around you perish of rage andboredom. Bwahaha.Original Source: Scientific American

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You’re Most Likely

Underpaid

PresenterPresentation NotesAubrey

You're most likely not. PayScale's Underemployment study found that 55% of employees who thought they were underpaid were actually not. Most people simply don’t understand how pay is awarded. This is why pay transparency is so important.

Perception of fairness: If people think they are underpaid, whether that is true or not, job satisfaction takes a dive and they become a flight risk.

It’s ok to raise the question – in fact, it helps retain talent.

of people say they understand how their employer determines pay.

of people who are paid at market THINK they are underpaid

PresenterPresentation NotesAubrey

You Most Likely Don't Know How Much You Should Be Paid

PresenterPresentation NotesThere is no double-jeopardy rule with lightning. According toNASA, lightning is a huge electrostatic discharge searchingfor a destination, and it doesn’t matter whether that locationhas been hit before. Lightning doesn’t have a memory. Tallerobjects, such as trees and skyscrapers, are usually commontargets because there is a shorter distance between that andthe origin of the lightning. The tallest tree in a forest can getstruck several times until the storm passes. In fact, lightningstrikes the Empire State Building around 100 times per year.Moral of the story? Bad data can kill you.Original Source: NASA

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PresenterPresentation NotesMykkah

In PayScale's 2015 Compensation Best Practices Report, businesses identified that there were 5 million new hires and 257,000 jobs added to the US economy last January. However, businesses continually report having open positions for long periods of time as a main concern. However, the inability to fill these positions falls heavily on the employers themselves. Turns out, the talent is out there, employers may just need to open their wallets.

PresenterPresentation Notes2014 Study

Millennials are ambitious and eager for their careers to take off – when describing their ideal job, 72% of Gen Y say they are more likely to value opportunities for career advancement (compared to 52% and 64% of Boomers and Gen Xers, respectively). 72% also value the chance to learn new skills, whereas only 48% of Boomers and 62% Gen Xers prioritize that quality.

Instead of focusing on what's going away – pensions; steady, defined career paths; antiquated job types – Millennials should focus on the fact that economic changes are opening up a whole new world of opportunities.Maybe that's why Millennials are 1.76 times as likely to study entrepreneurship in college than previous generations.

PresenterPresentation Noteschameleons change colors. this is true. however, it'snot to blend into their environment. chameleons changetheir color because of heat, to warn neighbors of danger,and when they’re feeling a little frisky. sometimes, achameleon changes colors just because they're in a foulmood. moral of story? chameleons be crazy.Original Source: Live Science

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Immediate Strategies

• Train your people to talk pay

• Get your house in order

• Calculate your true costs of turnover

• Reward your high performers

• Get to know your employee population

PayScale Delivers Where Other Compensation Providers Fall ShortPayScale leads the world in compensation knowledge with the freshest and most detailed data from over 54 million salary profiles. More than 3500 organizations use PayScale’s software and intelligence to get the greatest return on their talent. Smart businesses use PayScale Insight to recruit, retain and motivate their people.

Visit our blog: www.payscale.com/compensation-todayJoin our Group on LinkedIn: Compensation Today: HR Best Practices

Mykkah Herner, MA, CCPDirector of Professional ServicesAubrey BachSr. Manager Consumer Marketing

www.payscale.com

PresenterPresentation NotesQuiz:

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