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.
Movers and Shakers: Cheri Warren, Vice President, Asset Management, National Grid
Movers and ShakersCheri Warren, Vice President of Asset Management at National Grid, is fascinated by the potential of the power grid to change the way people live their lives. As head of the company’s smart grid initiative – called Utility of the Future – she said, “We are on the precipice of transformation and I’m really proud to be a part of that.”
Her passion for the energy space grew out of her early interest in engineering in high school and college. She explained that her Girl Scout troop leader was an Air Force recruiter and encouraged her to apply for an Air Force ROTC scholarship so she afford college. Even though the scholarship was delayed, because this was the ’80’s and a computer glitch declared her “legally dead” for a few months, she never wavered. she recalled. “Going to school would make all the difference in the world.”
Warren dreamed of joining NASA’s space shuttle program, so she studied electrical engineering for her bachelor’s degree and then followed that with a master’s degree in engineering. But, after injuring her knee while training for a marathon, she realized she would have to seek a new path. Nevertheless, her engineering background gave her a boost, she said. “Having that advantage helped a lot as I continued throughout my career.”
After landing an internship at GE, Warren found herself fascinated with the utilities industry, particularly the power industry. “I got really lucky,” she said. “I got a job at PTI [Power Technologies International], which is now owned by Siemens, and by my second summer I was redesigning how to protect the power system from lightning strikes.”
She worked in electric distribution consulting in the early ’90s and then moved into information systems for a few years then back to T&D studies before joining a management consulting firm. After 9/11, Warren’s interest in the power grid was further invigorated. “I decided to work for National Grid and I’ve never looked back,” she said.
Today, as National Grid’s Vice President of Asset Management, Warren is responsible for all of the company’s electric transmission and distribution assets where she and her team invest about $1 billion each year on behalf of customers, as well as the company’s smart grid activities. “The smart grid is transforming the industry. It will mean a better grid that allows people to live their lives in different ways,” Warren explained. “The grid we have today is 125 years old. I have a line that Edison himself built and it’s still alive today. Clearly it’s time for innovation.”
She is also enjoying the people-management part of her job. “The people development aspect is incredible to me right now. There’s a point in your career where you go from mentee to mentor, and then you’re a mentor with a capital M,” Warren explained. “One of my top lieutenants was trying to make the next step and become VP for a few years, and I’m proud to say he was promoted in January.”
Warren is also a member of the industry group IEEE and is on it’s board of directors. She got involved with IEEE as a student, but really ramped up her involvement back when she worked for PTI on the advice of her boss at the time. It has enabled her to publish papers and, in 2007, she was awarded the group’s Excellence in Power Distribution Award. “It’s a group that is changing the way we do what we do. It’s phenomenal,” she said.
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Why Aren’t We Ready for Female Breadwinners?
Featured, Managing ChangeToday women are more likely than ever to be the primary financially contributor (breadwinner) in their households – but that doesn’t mean we’re comfortable with it yet. At least, that’s what a new study out of the Simmons School of Management says.
Mary Shapiro, Professor of Practice at Simmons and leader of the study, explained, “A lot of girls and women have gotten that message – to be financially independent and find joy and personal satisfaction in their job. But society has lagged.”
The research is based on a survey of over 460 businesswomen who attended last year’s Simmons Leadership Conference in Boston. The majority of breadwinner respondents said they don’t share their financial situation with their family, friends, or colleagues, because, they say, it’s just not anyone’s business. The top reason? According to the survey, they were most likely to say they don’t want to “embarrass” their partners.
The women breadwinners in the study reported feeling high levels of pride in themselves and satisfaction in their jobs, yet they were conflicted. They worried what others might think of them and their partner’s unconventional roles. Shapiro said, “The message is, ‘I’m ready to be a breadwinner, but I’m not sure everybody else is ready for me to be a breadwinner.’”
Why not?
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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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