Salary.com HRVoice

Clawbacks in Practice at Diebold Following SEC Settlement

The U.S. Securities and Exchange Commission last week filed accounting fraud and other charges against Diebold and former executives of the company. The SEC charged that Diebold engaged in fraudulent accounting practices to inflate the company's earnings to meet forecasts from at least 2002 through 2007. Diebold agreed yesterday to pay a $25 million penalty to settle the allegations.

As these inflated results were used to calculate compensation payouts during the period, the company's former CEO Walden O'Dell has also agreed to reimburse $470,000 in cash bonuses, $1,000,000 in stock, and $85,000 in stock options. Other executives including Gregory Geswein and Kevin Krakora, both former CFOs of the company during the period, have not thus far agreed to settlement.

The first of this rare type of settlement with the SEC was the chairman and CEO of UnitedHealth Group, who settled for funds related to compensation and the proceeds of stock sales received between 2003 and 2006 totaling close to $450 million dollars. Similarly in 2009, the SEC brought a landmark settled enforcement action against the CEO of CSK Auto.

The Sarbanes-Oxley Act of 2002 requires public company CEOs and CFOs to return bonuses and other incentive-based compensation, equity-based compensation and profits on sales of company stock received within the 12 month period following the release of company financials if there is a restatement due to material noncompliance or misconduct. There are several limitations to this general provision. It applies only to CEOs and CFOs, leaves the definition of misconduct ambiguous, and is enforceable only by the SEC.

And the Oscar goes to.... A Lesson in Pay for Performance

I didn't tune into the whole of the Oscars last weekend. I had them on when I was checking my email and doing whatever else it is that seems to occupy the dwindling hours of my Sunday evening every week. I enjoy the sarcastic reviews of the gowns (poor Tina Fey can't get a break) and adding the films that I haven't seen to my Netflix queue, but I can't be bothered to make the commitment to watch more than the last couple of awards.
 
I found, though, that I was much more engaged in the whole Oscar process when one of my analysts sent me a New York Times article that described the contractual terms that could give nominees and winners big bonuses for the achievement. Yes, it is an honor just to be nominated, and it is great to be acknowledged by your peers, Blah, blah, blah. No one will argue that a pat on the back isn't valuable, particularly when it is given so publicly, but it put my mind on executive contracts.

HR Influencer: Valerie Frederickson

"Lots of HR shops need rethinking. While the herd is going to head straight to outsourcing, I'd recommend hiring a senior level all star with a mandate to shake things up. The good thing about RPOs (recruitment process outsourcers) and HROs (human resource outsourcers) is that they drive change. The fear of losing your job either produces dramatic action or frozen terror.

"This is the time when HR can make a real strategic difference. Helping your organization be ahead of the economy, on top of the downturn...That's what HR's supposed to do. It's a shame that the post-layoff paralysis has turned so may operations into conservative, reactive quagmires.

"Why don't we take more people from purchasing and put them in HR? That gets at the question of expertise in managing complex contracts. I agree that the failure of many outsourcing contracts in the first wave was due to the inexperience of the customer. There's a serious shortage of people who understand programs management, project management, contracts administration and requirements development at the senior level.

"Good purchasing executives know how to do these things. As HR fragments the skills will be in increasing demand. Lots of executives are coming in from adjacent functions. The incumbents are often too ineffective.

"The best career advice I can give someone in HR right now is to act like this is your last day. Say what you mean and stick to it. Call it like you see it. Have an opinion and do something, anything.

Game-Changing Marketing: A Super Bowl Ad Case Study

As I watched the Saints roll to victory in Super Bowl XLIV, one thing really hit me - besides all the Roman numerals. The commercials we’ve come to expect aren’t working the way they used to work.

The proof? Standards like Pepsi, FedEx, GM and Ford were not there. But it makes sense. With massive costs and unremarkable ROI, the way we market our products is under pressure.

That’s especially true of small business payroll, where the big names have their legions of payroll sales reps in the field, asking that used car sales pitch of yore, “What would it take to get you to buy today?” and cutting all those one-off deals. But as a culture, American small business are expecting to something different. Something honest. Maybe something even game changing.

Social Networking and Our New Payroll Service

Sometimes it takes a little social media to get the message out. At Salary.com, we’re trying to make the esoteric world of payroll and taxes a little more approachable for small business owners. So instead of difficult-to-understand brochures and tacky-suited salespeople cold calling your business, we’re using YouTube, Twitter and a Payroll Concierge team.

It’s different, but then again so is our offering. We’re really trying to get beyond the white noise of traditional payroll markets, but that requires something that’s never been done before. So, we launched a free payroll offer that is for a year. Not a month or two. But for 365 days.

Now, let’s see if we can create a collection of celebrity paycheck images that we can post on Flikr…..

HR Metrics

In business school, much is made of the ability to manage numbers. How much goes in, how much goes out, how much creates more? I think HR people could take a lesson in learning how to speak business people’s language of statistics.

 

HR people need to embrace the numbers and metrics that describe their business and learn how to use them to demonstrate the tangible results of their good HR policies. It’s not enough to say “employee satisfaction has increased our retention rates.” Back it up with real numbers: “In plant A, we measured our annual retention rate at 75 percent. Our employee satisfaction survey showed the greatest dissatisfaction with our time off policies. Thus, we’re recommending a set of time-off policy changes that we expect will result in a 5 percent improvement in annualized retention during the next five months.”

Keep Payroll On Pace with Changing Legislation

Payroll professionals are preparing for the end of year, and it feels like the calm before the storm. The payroll industry has been talking about the possibility of significant legislation and how it might impact payroll providers.

When economic times get tough, states get creative about protecting and managing revenue. Payroll professionals have already hustled to accommodate new COBRA legislation and changes to state unemployment and disability eligibility earlier in 2009. Some states are even establishing new approaches to taxes, such as adopting state-based earned income credit.

Salary.community: A Learning Opportunity

There is a lot of excitement here at Salary.com. We are in the midst of our first ever user meetings, dubbed Salary.community. So far we’ve had very successful meetings in Boston, New York and Chicago and are looking forward to meeting clients in San Mateo, Singapore, and London.

Our agenda features five different tracks covering compensation, competencies, payroll, talent management and IPAS. When I ran into a client of our survey management tool attending a session on competencies, I asked her about her decision to skip the composite building session.

“I’ve been in comp for years, and I’m comfortable with the decisions I make about blending surveys, but I don’t know anything about competencies and I have no other venue to learn about how companies use them.”

And that’s what these meetings are about: an opportunity to network and get educated on HR best practices. I hope to meet many others next week who similarly take advantage of our daylong agenda and learn something they didn’t know already.

Online Payroll Services, Engage Me, Please!

When I strolled the tradeshow floor at this spring’s American Payroll Association Congress, I took a good look at many of the service providers’ offerings. The booths were snazzy, and the Live Strong, flash drive, arm-band giveaways were nice. But when you got into most of the Web-based payroll applications, they were…well, boring.

Don’t get me wrong, they’ve got all sorts of important earnings, deductions, tax and employee data in their super cool .NET, SQL brains. But unless you have a degree in payroll from MIT (which they weren’t offering), the usability and intuitive nature of the apps were next to non-existent. Why do payroll service providers do that? So payroll people can have job security? Or because they’re trying to show you how payroll and taxes are really, really, really sophisticated and difficult to understand. Sorry, I don’t buy it. And nor should you.

Payroll, George Clooney and Customer Speak

Do we speak the language of our customers and associates? I was reminded of the importance of this after watching a 2005 movie about the oil business starring George Clooney, Syriana.  There’s a poignant scene where one character notes that the Chinese were the only foreign associates who bothered to learn the language of their Middle Eastern business partners.

What about us? In the HR and payroll arena, do we speak the language of our associates, customers and employees?