By 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.
Three Ways to Set Yourself Up for a Sweet Bonus Next Year
Money TalksDecember 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.
Is There Really a Choice Between Work and Family?
Work-LifeHigh-achieving women want to be great in all their roles—great workers, great mothers, great friends. Their brains are better equipped for multi-tasking—so they think they can do it, and do it all equally well. But they can’t.”
-Karen Mallia, Associate Professor, University of South Carolina
A recent NPR story quoted Karen Kornbluh, who, as an ambassador to the Organization for Economic Cooperation and Development, spent several years trying to determine ways to close the gender gap. In the piece, Kornbluh opines that workplace inequality in the U.S. is not about women—regardless of socioeconomic status — choosing family over work:
“I wouldn’t call it a ‘choice’ in the classic sense, because I don’t think they have a lot of options. You’re expected to give 100 percent on the home front and 100 percent at the work front and 100 percent to your friends and your community and you feel like a complete failure.”
Is the perceived choice that women are sometimes credited as having between work and family an artificial one? To find out, The Glass Hammer polled a group of academics, as well as legal executives, for their opinions and experience.
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What to Do on Equal Pay Day
Money TalksBecause 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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Voice of Experience: Jane Buchan, CEO and Managing Director, PAAMCO
Voices of Experience“Are there barriers for women in investment management? Yes, of course, began Jane Buchan, PhD, CEO and Managing Director at PAAMCO. “But it’s fascinating, as when I was younger I would have answered no. As you climb up through the pyramid, you see more barriers and more glass ceilings.”
She continued, “They aren’t overt issues. If we pretend that I’m Jack Buchan, not Jane Buchan, people would think I’m at the table because of what I’d done. But as a woman, more and more, you have people saying you’re just here because they ‘needed a woman.’ There are more and more questions of legitimacy, not that you’re here because you’ve earned it.”
Buchan has spent her career in investment management, and now as head of PAAMCO, an institutional fund of hedge funds, she is looking to change the way hedge funds produce returns for her clients. She also wants to see change in the way women are perceived in the industry.
“It’s very hard to deal with. I like what some organizations have done – ensuring there is a diverse pool of candidates for a position, so that it is clear when you pick a person it’s because they are the best person, not just the right gender,” she added.
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Can an App Help Close the Gender Pay Gap?
Money TalksAs 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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Do Women Really Make Better Decisions than Men?
Managing ChangeAccording to a new study, companies would be foolish not to hire more women to their boards of directors. The reason, as the authors say, is that women are better at making complex decisions: “women simply have the capacity to make better directors and their presence on corporate boards has been linked to higher organisational performance.”
The research, published in the International Journal of Business Governance and Ethics was based on the results of a test given to 624 board directors. The Defined Issues Test (or DIT) is used to measure three types of decision-making styles: personal interest, normative, and complex moral reasoning. Male directors were significantly more likely than women to make use of normative decision-making on the test. Female directors were significantly more likely than men to base their decisions on complex moral reasoning (CMR).
The authors, Chris Bart, DeGroote School of Business, McMaster University and Gregory McQueen, School of Osteopathic Medicine in Arizona, A.T. Stills University, believe, that in a board setting, this makes a big difference.
They write, “It is a superior form of reasoning which logically leads to the higher quality decision making reflected in higher rates of return and lower rates of bankruptcy. And our research shows that CMR is what separates the male and female director.”
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Best Practices: How One Corporate Sponsorship Program Creates More Confident Women Leaders
Mentors and SponsorsWithin Citi, enthusiasm and support continues to grow for a new program designed to develop and advance women leaders in Risk. Brian Leach, Head of Franchise Risk and Strategy at Citi and architect of the program, said he designed the “Women in Risk” program (WIR) to focus on developing key leadership attributes.
“We believe the essential attributes of a leader include decision making, building and maintaining a strong professional network and team, and a willingness to take intelligent risks,” he said. The multi-faceted one-year program provides visibility, training, career planning, and access to senior leadership within Risk and across Citi, pairing a carefully selected group of senior, high performing women with a sponsor from the Risk function’s executive committee.
Leach continued, “To be blunt, I expected success. But what I was pleasantly surprised to see was how many of the participants, in the first year, took on new jobs with increased responsibilities as a direct result of the access and the opportunities the program provided them.”
In fact, more than half of the participants moved onto bigger roles in their first year. He explained, “When you go through a program like this, if it is successful, you wind up with an incredibly confident group of people. And if you’re confident, you’re willing to take on new challenges. Once you have that mindset, when opportunities present themselves, I think a lot of things line up.”
Diana Lozano Zay, now a Director in Commercial Risk at Citi, was one of the participants in the program’s inaugural class. She summed it up, “While the WIR program helped me transition to New York, and provided a great sponsor, most importantly, it allowed me to join a virtuous cycle that leads to better opportunities.”
Zay continued, “Since participating, I have received new and increased responsibilities. I feel more confident and am more aware of the importance of ‘taking control of my career. Thus, I have become more vocal about what I want. Further, my managers became more aware of my potential. I feel this new opportunity is a direct result of the program.”
In just three years, the Women in Risk program has produced better prepared, more self-assured female leaders. Here’s how it works, what Citi has learned since the program launched, and advice on how to develop your own high potential sponsorship program.
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Why We’re Not Sure We Want to Be #1
Ask A Career Coach“I am a really good #2. I don’t want to be #1.”
“I really love the job I’m in and don’t want my boss’s job. It just seems too political.”
“I think I could do my boss’s job, but I don’t really want that much stress in my life right now.”
“My kids are young, I’m already working as hard as I can, I can’t really take on that stretch project.”
In March, I spent did a lot of speaking at conferences and connecting with women as part of Women’s History Month. As women approach me with questions, I’m struck by the ambivalence I see in many to pursue the top job. I understand. I actually wrote about why so many women drop out of corporate America. I was one of them.
For those who want to stay, I advise them to get clear (as hard as it is given the trade-offs) about work life priorities and stop being ambivalent. Ambivalence keeps us stuck. It zaps our energy. Here are the five mindsets I’ve observed that keep us stuck. Do any of these apply to you?
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New Study Shows Women are Increasingly Seeking Global MBAs
Back to School, PipelineThe world is becoming more connected, companies are becoming more global, and the workforce is more international. As a highly-motivated woman, you may have had the intuition that you need global experience and education to further advance your career. You see a need to manage culturally diverse teams and deliver growth in new markets. You’ve thought of going back to school either part- or full-time, but a business school in the United States just doesn’t seem quite enough.
The good news? You’re not alone in your thinking. Increasingly, women are recognizing and taking action on the desire to build an international network and enhance their business acumen and skills. You understand that we are all operating in a more global world.
“Business education is the single most effective investment you can make in one year to transform your career,” noted Wendy Alexander, associate dean, London Business School for Degree Programmes and Career Services. “But, if you want a global education, you need to come to a global school.”
Jointly, the London Business School and the Forté Foundation researched an emerging trend: North American women heading to Europe to study for and obtain their MBA degrees. These women, according to Alexander, have found “the X factor for the future: experience, expertise and cultural awareness.”
That is not to say those who chose this path did not already have successful careers. Most graduated from some of the best universities in the U.S. and embarked on finance or consulting careers. They, however, reached a point where they needed to take the next step to move forward.
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Census of UK Women Board Directors Reveals Seniority Differences
Managing ChangeEver since Lord Davies of Abersoch released his 2011 report on the shockingly low representation of women on UK boards of directors – 12.5 percent of FTSE 100 directors in 2010 – companies have ramped up their efforts to attract women to these posts. The report recommended that FTSE 100 boards work toward achieving 25 percent representation by 2015. Today about 17.3 percent of director positions are held by women in the FTSE 100 and about 13.2 percent of director positions in the FTSE 250 are held by women.
Initially, companies complained that there certainly weren’t enough qualified women to expand the percentage of women directors. But, a new survey [PDF] by the Ashton Partnership, an executive search firm, shows that boards have found plenty of women non executive directors by broadening their search parameters. Even still, if they are to meet the 25 percent goal in the next three years, they will have to ramp up their search for female directors even more.
According to report authors Nick Aitchison and Bibi Boas write, “In order to pinpoint the talent pool for the next wave of female FTSE 250 NED appointments, The Ashton Partnership set out to understand the earlier Executive career backgrounds of the 183 women appointed by the end of 2012 as NEDs on FTSE 250 Boards.”
Aitchison and Boas found two key differences in the men and women NEDs – and both of them point to the root of the issue. There are fewer women in the pool of executive roles from which NEDs are traditionally found. The result is that companies are looking at a more diverse field of talent for their directors, and given the state of group-think and rubber stamping of risky behavior that contributed to the recent economic crisis, that can’t be a bad thing.
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