The Link Between Doing Good and Team Performance

iStock_000014038693XSmallBy Melissa J. Anderson (New York City)

A new study [PDF] suggests that managers can boost team performance by offering “prosocial” bonuses. The study’s authors say that teams do better when individuals get bonus compensation which they are then instructed to spend on another team member or a charitable group.

The Harvard Business School working paper was released this month and written by Lalin Anik, Duke University; Lara B. Aknin, University of British Columbia; Michael I. Norton, Harvard Business School; Elizabeth W. Dunn, University of British Columbia; and Jordi Quoidbach, University of Liège. The researchers were looking for ways around common problems caused by traditional bonuses, which have been shown to be ineffective in increasing morale and productivity.

According to Anik et al, prosocial bonuses, or bonuses that are spent on other people, may be the answer. Teams that employed prosocial bonuses reported higher productivity and more satisfied employees than those that only used traditional bonuses. They write, “These results suggest that a minor adjustment to employee bonuses – shifting the focus from the self to others – can produce measurable benefits for employees and organizations.”

Apparently, the sense that they are doing good can motivate people to work better together – here’s how.

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Three Ways to Set Yourself Up for a Sweet Bonus Next Year

iStock_000015442897XSmallBy Stacey Hawley (Chicago)

December 25th marks a holiday brimming with worldwide wonder and delight, underscored by the giving spirit. Bonus season, on the other hand, celebrates the act of receiving. When parents recite “it is better to give than receive,” they clearly are not discussing bonuses.

Companies with calendar year-ends communicate bonuses between January and March of the following year. Because most companies follow a calendar-year cycle, and award bonuses in March, bonus season is in full swing. Many employees’ bank accounts swelled in the last 30 days.

Small signs of economic recovery loom. According to Buck Consultants 2012 Compensation Planning Survey, both the size (amount of money delivered) and prevalence (use or eligibility) has increased substantially. Most importantly, the survey’s 350 respondents indicated the expected size of 2013 annual cash awards exceeds the 2012 target payouts and 2011 actual payouts for all employees. In other words, employees are beating plan, and earning above target payouts. While it is unclear whether the probability of achieving the target was increased to improve retention, motivation, and morale, at least payouts are improving.

Receiving an unexpected bonus boosts morale, encourages engagement, and motivates employees to repeat (or exceed) their previous years’ performance. At the executive level, compensation hovers at all-time highs. With the S&P 500 gaining 13%, the stock market closing at record highs, and companies practically hoarding cash, CEOs and senior executives are reaping the rewards. Although most companies dole out awards in base and equity, some CEOs still recognized record bonuses. Disney’s CEO Robert Iger earned $16 million because of outstanding financial results. And he is not alone.

But what about the rest of us? How do typical employees ensure above-average bonuses?

Admittedly, it’s probably too late to bump this year’s bonus but fortunately it is only April. 25% of the way into the 2013 performance cycle leaves employees with ample time to secure a good bonus next year.

Suggestion 1: Take charge
Employees should familiarize themselves with their company’s annual incentive process. Know when goals are established and approved, and how and when incentive awards are decided and communicated. If your manager doesn’t communicate, find out. Talk with other employees or meet with your manager to ask him/her to define the expectations.

Suggestion 2: Be as specific as possible
To achieve an above-average bonus, employees need to know what to do – exactly. If managers instruct employees to develop a new branding concept, employees need to know what makes this successful. Does the branding concept just need to be developed, or approved and communicated? Does the concept need to be approved by the end of the second quarter? Should the branding concept promote a product launch, product development or increased sales? If so, how much?

Jeffrey Pearlberg, SVP Global Client Banking and Wealth Management at Citi believes, “The most critical element is absolutely clear and specific expectations. The content of the goals and criteria can vary, but specificity is necessary for employees to direct the behavior.”

Suggestion 3: Stay in the Loop
Communication plays an integral role in ensuring a positive bonus payout. Ostensibly, not all employers actively engage in goal-setting or continuous performance feedback. If you are left on the sidelines, stay in the loop. Pat Peri, member of Resource Management Solutions and seasoned human resources leader, encourages senior leadership to actively participate in goal development. “Equally important,” explains Peri, “is the feedback along the continuum to give the associate a sense of where they stand and what changes need to be made if the outcome is not on target.” Request meetings with your immediate supervisor or manager to discuss your performance every two to three months. Specifically ask whether your performance meets expectations and, if not, what changes need to be made.

By definition, companies do not guarantee a bonus. However, incentive payouts play an integral part of the compensation structure and rewards provided to employees in most companies. Assuming the company achieves its desired financial performance, if you engage in active, ongoing communication and meet or exceed performance expectations, you should be well on your way to a nice bonus next spring.

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What to Do on Equal Pay Day

iStock_000002559773XSmallBy Robin Madell (San Francisco)

Because women earn less, on average, than men, they must work longer for the same amount of pay. The wage gap is even greater for most women of color.
–The National Committee on Pay Equity

Today – April 9, 2013 – is Equal Pay Day. This annual public awareness event originated in 1996 through the efforts of the National Committee on Pay Equity (NCPE) to bring attention to the gap that exists between women’s and men’s wages.

And lest you think that women have caught up to men in yearly salaries, a newly released report from the American Association of University Women (AAUW), titled The Simple Truth about the Gender Pay Gap, reveals otherwise. Equal Pay Day is the symbolic date in April when women’s wages finally catch up to men’s from the year before—and the report confirms that it takes nearly 16 months to get there rather than 12.

The report, which is based on data released by the U.S. Census Bureau at the beginning of the year, provides an annual breakdown of the gender pay gap by state, race/ethnicity, education, and age. What it shows, according to AAUW executive director Linda D. Hallman, is that women are losing “tens of thousands of dollars” in wages. In a statement released by the organization, AAUW’s director of research Catherine Hill stated that the report shows the gender pay gap “hasn’t budged” in the past 10 years.

In a state-by-state comparison, the report shows that Wyoming has the largest wage gap—there, women received only 67 percent of men’s earnings in 2011. Washington, D.C., on the other hand, saw the smallest wage gap—D.C. women received 90 percent of what men were paid.

In terms of race and ethnicity, Hispanic/Latina and African-American women made less in median weekly earnings than white and Asian-American women did. Hispanic/Latina women received only 59 percent of white men’s earnings in 2012. Asian-American women’s salaries had the smallest gap in gender pay when compared with white male workers, at 88 percent of white men’s earnings.

The gap also affects some age groups more than others. For workers age 20-24, the pay gap already is 7 percent. But it widens as women become more senior in their roles and enter their prime earning years. The gap stretches to 24 percent among full-time workers ages 45-54 – which means that older women face a pay gap three times larger than younger employees.

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Can an App Help Close the Gender Pay Gap?

iStock_000021233733XSmallBy Robin Madell (San Francisco)

As we approach Equal Pay Day on Tuesday (April 9), The Glass Hammer spoke with Katie Donovan, whose new mobile app Earn More Girl helps women determine their personal pay gap. The app, which is available for iPhones and iPads, allows women to enter their current pay and select their job type to find out what they would probably earn if they were paid similarly to men.

Donovan was inspired to create her app after reviewing data on the gender pay gap at Narrow the Gapp. There, she discovered that figures from the Department of Labor show the gender pay gap for 135 job categories ranges from 58% to 97%. Donovan recognized that most working women have more than enough on their plate to spend time analyzing the specific data to figure out their personal impact, and thus are unsure if and how the gap affects them personally.

Additionally, women trying to be informed job seekers currently are not able to see the true market value of a job since all salary research sites combine the salaries of men and women working in a job to determine the salary range and key data points, such as the median income for a job. Unfortunately, using such information creates an artificially low target salary. To help address this, Donovan decided it was time to automate the process, enabling women to learn their true target salary (or corresponding data point for men) through an app.

When she first found the data revealing the breakdown of men’s and women’s salaries in the exact same 135 jobs, Donavan knew she could adjust salary research to target the men’s salary. She began by providing a simple spreadsheet with a formula on her website that women could use to calculate comparable median points and other target salaries with what men earned. Yet she quickly realized the value that a mobile app would have in providing this information more seamlessly.

“From my perspective, this is a chicken and egg issue,” says Donovan. “Do women want this information and thus I provide it, or do I promote the fact that such information is available so women will begin to ask for it? I decided to provide the information and help raise awareness.”

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Why the Financial Advisor Industry Needs Women

Leading a dynamic teamBy Melissa J. Anderson (New York City)

On average, women financial advisors make just 58 cents for every dollar made by their male peers. That’s a significant wage gap, and it’s even higher than the national average (which lies somewhere around 80 percent). One reason for the gap is that men in the industry tend to work at larger, more lucrative companies than women. But why?

Similarly, women only make up about 30 percent of the industry (and even fewer take up executive roles). “Why are there so few women in this industry? Why does that red carpet get rolled up for women? Are women taking themselves out? Or was the industry perceived as unfriendly?” asked Kim Dellarocca, Director and Head of Practice Management at Pershing.

Dellarocca and her team set out to find the answer to these questions in Pershing’s latest report, “The 30% Solution: Growing Your Business By Winning And Keeping Women Advisors” and its previous one, “Women are Not a Niche Market.” She hopes the research will help the industry usher in more women, and ensure they are treated fairly.

And attracting and retaining women and diverse talent is critical for the survival of the industry, Dellarocca reasoned. The financial advisory space is expecting a talent shortage of 237,000 new advisors in the coming decade. It needs to look beyond the status quo to fill those seats – and in order to do that, the industry is going to have to change.

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Women on Boards: Asset Managers and Institutional Investors Weigh In

iStock_000007749988XSmallBy Melissa J. Anderson (New York City)

How loud does money talk? That’s the question posed by the asset managers, institutional investors, senior business executives, statewide elected officials, and national women’s organizations that make up the Thirty Percent Coalition. The group aims to encourage companies to ensure their boards are composed of at least 30 percent women by 2015. And they’re doing it by leveraging some serious dough: the investors in the group represent over $1.2 trillion in assets under management.

Last year, the Coalition contacted all of the companies in the Fortune 500 that had no women on their boards, and this year they sent letters to all 127 companies on the Russell 1000 that have no women on their boards, urging them to hire more. The issue resonates with investors – research shows that companies with more women on their boards perform well financially and are better governed.

Members of the Thirty Percent Coalition argue that by keeping women out of the boardroom, these companies may not be performing at their highest capability for their shareholders.

Tim Smith, Senior Vice President and Director of ESG Shareowner Engagement at Walden Asset Management, a division of Boston Trust & Investment Management, said, “The business case is quite compelling for investors. It is important for the reputation and image of the company, as well as a way to protect the long term sustainability of the firm, including the long term bottom line.”

He added, “Obviously women’s organization’s leadership is exceedingly important on this issue. But investors also have power – after all, we are the owners of companies.”

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Should You Accept a Promotion Without a Raise?

iStock_000003482002XSmallBy Stacey Hawley (Chicago)

Receiving a promotion is a big deal. A very big deal. Promotions mean more responsibility, new challenges, and an inherent recognition of an employee’s abilities and potential.

But not all promotions come with raises attached. During difficult financial times – when many companies freeze base salaries to control costs – employees may be promoted with the promise of raises when the economy improves. At other firms, where individuals cannot progress unless someone leaves, a promotion (without a raise) – culturally – may be Oscar-worthy recognition. And yet, at still other firms, promotions without raises are mishandled, cheap forms of recognition that lead to compression and inequity.

Two critical drivers – retention and engagement – fuel base salary increases and promotion decisions. Promotions provide individuals with rewards and recognition, career advancement and job growth. Promotions keep employees engaged, focused and committed to the company and its business strategies. Companies recognize that most employees highlight career advancement as a top reason for staying.

While base pay – cited by Towers Watson’ 2012 Global Workforce Study – remains the #1 reason employees join a company, both base pay AND career advancement rank as # 1 and #2 for employee retention.
Employees receiving promotions without raises may find their engagement teetering. If you find yourself in the position of receiving a promotion without a raise, follow these three steps before responding.

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Women Prefer Jobs with Clear Rules on Negotiation

By Melissa J. Anderson (New York City)

A new working paper released by the National Bureau of Economic Research suggests that women are more likely to apply for jobs where negotiation is explicitly anticipated.

The study supports a theory that women prefer work environments with an unambiguous set of rules about compensation, whereas men tend to prefer environments where that set of rules is less defined. “This leads to the gender gap being much more pronounced in jobs that leave negotiation of wage ambiguous,” write the authors, Andreas Liebbrandt of Monash University in Australia and John A. List, of the University of Chicago.

Liebbrandt and List found that women were more likely to submit applications to job openings that indicated the salary was negotiable. They were just as willing to negotiate as the men who applied for these jobs.

We’ve heard the women-blaming maxim time and time again that “women don’t ask.” But this study actually shows that women do ask – as long as the rules of the game are clear. Research has shown that women who do negotiate for their salary are sometimes penalized for not adhering to gender norms around assertiveness. This study suggests that, in general, women are aware of this factor, and avoid jobs where they could get snared in the negotiation double bind: if you don’t ask, you don’t get …but if you do ask, you could get labeled a “difficult woman” or a few other choice words that could slow your career down.

By disclosing that negotiation is anticipated, hiring managers send a signal to women that the playing field may be closer to fair.

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Pay Gap Persists for UK Professionals

By Melissa J. Anderson (New York City)

A new survey released last week by the UK’s Chartered Management Institute shows a significant gap in compensation, advancement prospects, and job security between men and women in the UK.

At the management level, on average, women receive £10,060 a year less than men. That difference, after a lifetime of work, would equal more than £400,000.

CMI explains, “a woman and a man entering executive roles aged 25 and working their way up the career ladder until retiring aged 60 would take home pre-tax totals of £1,092,940 and £1,516,330 respectively, based on today’s levels.”

But the differences didn’t stop at the paycheck. According to CMI, women receive fewer bonuses, fewer promotions, and were even more likely to get laid off during the last year.

Baroness Prosser, Deputy Chair of the Equality and Human Rights Commission, remarked, “The gender pay and opportunities gaps are intrinsically linked. The opportunities gap leads to the lack of advance for women through the executive pipeline and this in turn provides for the gender pay gap.”

She noted that while employers should take the responsibility for ensuring they have fair compensation and promotion processes, women can also seek out better practical support in order to help them advance.

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The Wage Gap Explained

iStock_000004797699XSmallBy Melissa J. Anderson (New York City)

Several years ago, I stepped into a career fair at my undergraduate university. As a 22-year old anthropology major, I had little direction regarding my future career. The first thing I noticed was that all of the other students were wearing suits and had fancy leather portfolios. Meanwhile, I had merely tucked in my shirt before wandering in from the cafeteria, which is where I had first noticed a flyer for the expo.

I felt like a fish out of water – but what happened next surprised me even more.

I was immediately approached by a recruiter from a global defense contractor, asking me what I thought I might want to do for my career. I responded, “I’m not sure… I think I want to do something that helps people.”

The recruiter chuckled, and said, “I think there’s a table of folks from Prince George County Schools over there.” He pointed me in the right direction and moved onto the next college senior.

Now, I’m not saying that I would have been a good recruit for the defense contractor. But I suspect a man in my position would have gotten a harder sell on the company (maybe something like how defense firms do plenty of good, providing security for people around the world), or at least a folder of information, possibly a magnet or lanyard. I got the brush-off instead, and the suggestion that I might prefer being a teacher.

My story illustrates a few of the ways subtle gender bias influences the careers women choose and are encouraged to choose. It also helps point out a lot about the subtle, sinister factors driving the wage gap. Women today make only 82 percent of what their male peers make one year out of college.

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