The weather is getting cooler, we're seeing fewer hours of sunshine each day, and the leaves are beginning to turn into the beautiful colors of autumn. It seems as though my perspective tends to change at this time of year - I'm more inclined to cook a meal rather than order takeout. I read more books - real paper books. And I begin thinking about whether I met my goals for the year and and what improvements I can make in the year ahead.
But this year, I'm not the only one whose perspective has changed. The Department of Labor is also feeling the change of season - they recently released their Strategic Plan 2011-2016. The message of that plan is "Good Jobs For Everyone", and Secretary Solis is making some changes at the DOL to achieve that goal. One of the biggest changes is the way in which the Department will be measuring its own performance. The new performance metrics will focus on describing the effect the agencies' activities have on wages, working hours, benefits, and equal employment opportunity.
Historically, the DOL measured its performance regarding wages and benefits, hours, and equal employment opportunity by looking at the results of its investigations and audits. But, as the Plan notes, this provides a very limited view of whether an agency is fulfilling its mission. The new approach to measuring agencies' performance consists of four parts:
- Developing strategies that leverage interventions (e.g., deterrent effects);
- Reporting on compliance levels for all regulated entities - not just those directly affected;
- Continual evaluation of whether strategies are leading to improved outcomes;
- The use of quantitative analysis and program evaluations to assess the effectiveness of strategies and the extent to which the agency is achieving its outcome goals.
What's your perspective? Are you thinking about whether your compensation system is fulfilling its mission, or are you looking at the number of fires you put out and how many scrapes you narrowly escaped? Are you evaluating the success of your system on things that are easy to measure, or things that really matter?
The most difficult part of the process may be defining your outcome goals and identifying the mission of your compensation system. What are you trying to accomplish? Improved retention? Better employee engagement and employee satisfaction? Or are you just interested in getting bodies to show up every day?
Unfortunately, nobody can tell you what your outcome goals should be. They'll be specific to your firm, and should be aligned with the overall goals of the organization. But once you identify those goals, you can develop a plan for measuring how well you're meeting them, and the Department of Labor's plan is a good place to start.
Continually evaluate whether your compensation strategies are leading to improved outcomes. Compensation strategy is not "set-it-and-forget-it"; it requires care and feeding. It's hard work to align your compensation strategy with your goals, and it's even harder to keep it aligned. It needs to adapt to changes in the economy, in labor markets, and within your own organization. A strategy that works well today may not work at all tomorrow. Continual evaluation is the best way to find out what works, what doesn't, and what you might be missing. You've got no chance of keeping your compensation system aligned with your goals and desired outcomes without ongoing evaluation.
Make use of a variety of evaluation methods. Quantitative analysis is a great tool - it can reduce very complex relationships into easily understandable metrics. But it's easy to get caught up in the "scientific-ness" of it all. If you're not measuring the right thing, the greatest quantitative model in the world is meaningless. When you're selecting your evaluation methods, don't forget the value of actually talking to people. It's not always all about the math - there's a human element to it that we sometimes overlook.
Let Autumn be your inspiration for changing your perspective, and take a falling leaf or two from the Department of Labor's tree. Spend some time thinking about how you measure the success of your compensation system.
Stephanie R. Thomas is an economic and statistical consultant specializing in EEO issues and employment litigation risk management. For more than a decade, she's been working with businesses and government agencies providing expert EEO analysis. Stephanie has published several articles on examining compensation systems with respect to equity. She is the host of The Proactive Employer, and is the Director of the Equal Employment Advisory and Litigation Support Division of MCG. Follow her on Twitter at @ProactiveStats.
(image courtesy of freephoto.com)
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