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Archive: July, 2009

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Thursday, July 30, 2009

It's easy to gripe about insurance companies and how much money their executives are making, especially when there are so many people without coverage and so many businesses struggling to pay premiums for their workers. Of course, it all depends on the benchmarks you use to judge. Whatever benchmark you use, it would be nice to earn $2.7 million a year, like Independence Blue Cross's Joe Frick did, in 2007, according to the Pennsylvania Insurance Department. 

Today, the Pennsylvania Insurance Department released a report on the executive compensation of the state's two largest "Blue" plans, Independence Blue Cross here in Philly and Pittsburgh's Highmark Inc. Essentially the department found that Joe Frick from Independence and Ken Melani from Highmark are reasonably compensated within the milieu of other Blue plans nationally and in comparison with what is paid to top executives in nonprofit hospital systems. 

That's essentially what my fellow Inquirer reporter Craig McCoy and I found when we analyzed their pay as part of our look at  the then-proposed merger between the two health plans. 

If you automatically assume that a nonprofit executive earns little to nothing working in a tiny storefront with battered file cabinets, then you aren't in the same league as these guys. If you think that no one working with sick people should be earning this kind of cash, you are also going to have a problem with the $3.6 million that Melani earned. And you are going to have an even bigger problem when you learn that Melani's compensation doubled in five years and Frick's tripled, from $916,406 to $2,781,275. 

"Our focus was on comparability because that is the legal standard and also what drives competition for executive talent," Insurance Commissioner Joel Ario said in a statement announcing the report. The report uses material gathered during the merger process. That merger ended in January when the two companies withdrew.

 "Whether the compensation scale is fair in a broader public policy sense, or whether new regulations are needed, are questions that are appropriately left to the legislative branch," Ario said.  

Executive pay is a deeper discussion than this, obviously. When you have an  organization, nonprofit or for-profit, with billions in assets and thousands of employees, the executives should be well-compensated.  And certainly, Melani and Frick's for-profit CEO compadres are making a lot more than they are. Another certainty -- these men have a lot of responsibilities, responsibilities that never, ever go away. There is no such thing as a vacation, a night off, or a weekend off. They get their time off in several-hour stints, stints that can be and are interrupted at any time.

Even so, when executive compensation in total, with bonuses and salary and perks, moves close to $2 million -- that seems too high to me, especially in the case when the executives have no capital of their own at risk. I don't care what they are running and I also don't care what they "give back" to charity, although we are grateful for anyone's largesse. Heck, we'd all like to "give back" to our favorite charities. 

Even if you don't include legitimate expenses, like a driver, home security systems, and a reasonable amount of wining and dining in nice places, a $2 million compensation package comes to $220 an hour, assuming that the executive works 24 hours a day, seven days a week. I'm willing to make that assumption, given their level of responsibility. I'm sure they spend many sleepless nights. But after a certain point, that exec money needs to go elsewhere -- into research and development to grow the company, into better pay for employees, into investment in new machinery and upkeep of old machines. That's how businesses sustain themselves and grow. It helps if the employees earn enough to afford the good or service they produce.

A growing business is an employing business, and that's what we need now. Frick and Melani's pay may be reasonable against benchmarks of other CEO pay, but there are other benchmarks -- benchmarks that can and should be applied to many other CEOs besides Frick and Melani.

Posted by Jane Von Bergen @ 1:53 PM  Permalink | 13 comments
Thursday, July 30, 2009

This is really interesting. When you  hear about people working from home, you usually figure it is a professional salaried person who can work anywhere with a laptop, but surprisingly, 45 percent of the organizations that responded to a recent survey, said they had hourly workers who put in their time at home. Despite the portable possibilities of work, telework is still the frontier when it comes to human resource management. According to this survey, less than half of the companies had a formal selection process, a formal contract for flexible work or a system to evaluate technological effectiveness.

“The participation of non-exempt employees in flexible work programs is much higher than expected, but not as well-organized and orderly as is required by employment law,” said Charlie Grantham, managing director of Work Design Collaborative. “As flexible programs grow in both scale and scope, policy development in this area will become a critical human resource management issue.”

The survey was conducted by the Work Design Collaborative, a California-based research organization, for WorldAtWork, a global organization of human resource professionals who specialize in compensation practices.  Out of 2,000 companies surveyed, 135 responded. Of them, nearly half have more than 1,000 employees. A copy of the study, titled "Flexible Work Arrangements for Nonexempt Employees," is available by clicking here.    

Posted by Jane Von Bergen @ 4:30 AM  Permalink | Post a comment
Wednesday, July 29, 2009

Yesterday I interviewed Philip M. Dine, a longtime labor reporter and author of  a new book "State of the Unions." We talked about a bunch of stuff, but this was an interesting bit that probably won't make into the story for the Philadelphia Inquirer that I'm reporting this week. 

Dine said that unions benefit when the economy is a little bit bad, because people have an inherent interest in making sure every last bit of wealth and opportunity is not eaten up by corporate powers. That's when union issues, such as the challenge of organizing new work places, resonate. But when the economy really tanks, it is another story. Then, Dine said, union issues, even important ones, seem trivial when compared to more stark matters of survival.

You can click here to read a summary of his book.

Posted by Jane Von Bergen @ 4:35 AM  Permalink | Post a comment
Monday, July 27, 2009

So what about loyalty? Does it matter at all any more or has the willingness of companies to use the recession as a cover to rid themselves of less than "A" level talent killed off the last vestiges? That's the provocative question that Wharton prof Peter Cappelli asks in his excellent essay in Human Resource Executive Online.  

He quotes a survey that shows that two-thirds of all employers who laid off people in the recession did it to get rid of lackluster performers and replace them with new hires. Why? Because the recession has made better-quality workers available.

Cappelli said that in general, workers competed internally to show themselves as the most competent. Now, "the performance standard necessary to keep a job depends on competition in the outside market. The relevant question to keep a job then becomes: Could the company hire somebody better than the current employee?"

Of course, as he points out, this assumes that company recruiters are adept at selecting better employees -- a real challenge with the current flood of incoming resumes.  Didn't these recruiters find the workers now being let go? Why have they suddenly become so perceptive at picking top talent? 

"The most important implication concerns issues of morale and commitment." 

(My comment? Hah! Big eye roll!)

 Employers, Cappelli said, moaned over the death of company loyalty when bright talent hopped from dot.com to dot.com in search of the best deal. "Is there anything different about what the employers are doing here?"

My answer: Of course not!

Cappelli said he can't imagine any employee who watches this ugly layoff process feeling any qualms whatsoever about leaving for a better position if it comes along. "Does this put the nail in the coffin of the view that employers and employees have obligations short of  looking out for their own immediate self-interest.

Those employees who have made the shift into self-interest and managing their own careers are already ahead of the game in this scenario. Those in management and in the workforce who still think about long-term commitment and loyalty, about the fairness of policies, about internal equity, seem to be losing ground.

I definitely recommend reading this excellent essay by Cappelli.    

Posted by Jane Von Bergen @ 3:05 AM  Permalink | 1 comment
Friday, July 24, 2009

The other day Gerald Perrins, the local data wonk at the Philadelphia office of the U.S. Labor Department, sent me 128 pages of local employment data. It's really fascinating. Here's a little tidbit: In the Philadelphia metropolitan division, which includes the city and the four surrounding suburbs, 23,100 people worked in clothing and clothing accessory stores in June, 2008. A year later? Just 20,000 -- 3,100 fewer people. That's a decline of 13.4 percent.

So are you buying fewer clothes and accessories? Making do with last year's swimsuit? If you are, then maybe you are part of the reason why employment's down

There was a little bump up from May, about 200 people getting jobs. No point in getting excited, though. In most of the last five years, employment in clothing and clothing accessory stores rose by 200 from May to June. No idea why.

Employment also declined in general merchandise stores, like Wal-Mart or Target. Employment dropped by 1,500 from 27,300 a year ago.      

Posted by Jane Von Bergen @ 3:15 AM  Permalink | Post a comment
Wednesday, July 22, 2009

It's my birthday today, so I'll forward my birthday wishes to all the unemployed people -- and also, by the way, to everyone who is working.

I hope you find work that is satisfying and pays you a fair and reasonable amount, and that the amount is more than what you earned in your previous job. I hope the work comes with all kinds of benefits. I hope the work comes with joyfulness and satisfaction and that it uses the full measure of your talents, so that you can be happy and so that your company can prosper.  I hope you have an opportunity to learn and grow at your job, so that both you and your company can advance.

I hope it comes with a fair and reasonable boss (not like the people at Acme who threatened their workers by advertising for their replacements when both sides couldn't come to immediate terms on negotiations). I hope your boss is not a bully, an idiot, a whiner, or a manipulator. Ditto for all the bosses above your boss. 

I hope you work in a safe place with functioning equipment in good repair and where shortcuts with safety aren't taken in callous disregard for your health. I hope that you are busy at work, but not so frantically busy that you make mistakes or become disheartened. I hope you work with colleagues who treat you with respect and affection, where differences in age, race, gender, religion, economic class, sexual preference and culture make life interesting and come in handy on the job. I hope you have a relatively calm commute and that your hours are conducive to getting the job done while maintaining a balance for your family life. I hope there are opportunities to advance, and that those opportunities are fairly granted.

I hope your coffee machine makes good coffee, because that's just nice.   

Posted by Jane Von Bergen @ 3:25 AM  Permalink | Post a comment
Tuesday, July 21, 2009

The Holy Grail, of course, is a full time job at a reasonable wage with benefits, but people shouldn't turn up their noses at contract work in the interim -- especially in the field of information technology. The advice comes from Robert Half Technology, so I'm taking it with a grain of salt, since Robert Half is a company that provides technology employees to companies on a project or full time basis.

Even so, they interviewed 1,400 chief information officers and 73 percent said they found very or somewhat valuable to see project experience on a resume. Robert Half Technology suggests revising your resume to show the contract situations. At the top of the resume, highlight your areas of IT expertise, your current skills and your quantifiable results with past employers. Then move into an abbreviated work history, keeping the whole thing under two pages, they say.

In the interview, emphasize short-term results. Employers want you to be able to ramp up quickly and they want results quickly. Also, in many cases, they want to try you before they buy you. In the interview, be able to describe how your expertise meets their particular challenge.

Naturally, Robert Half suggests going through a specialized staffing firm, saying that such firms have access to unadvertised consulting positions. One thing a contracting job does (besides paying bills) is whittle away at gaps in your resume while keeping skills sharp.      

Posted by Jane Von Bergen @ 3:45 AM  Permalink | Post a comment
Monday, July 20, 2009

Important news you can use: You gotta be vibrant at all times if you want to get a job. To be relevant in today's workplace, make sure you have no wrinkles. Skills, experience? Unimportant. Sadly, we know there is some truth in the necessity of looking youthful and healthy, but what I find really offensive is the marketing to people's insecurities, especially when being unemployed is all about being insecure. 

Normally, I might paraphrase a ridiculous press release, but in this case, I'd prefer to cut and paste, because I think the full-fledged offensiveness of it may get lost in the translation. (Please excuse any font weirdness.) Out of kindness, I'm going to remove the name of the public relations person, assuming that this is some poor schnook that needs a job like the rest of us.   

Hi Jane,

 

 

In a fiercely competitive job market, candidates – both men and women alike – are doing everything they can to get a leg up on the competition – including electing for cosmetic procedures to ensure they look energetic and healthy. 

 

According to the American Academy of Facial Plastic and Reconstructive Surgery, 75 percent of physicians surveyed said they had treated patients who requested facial plastic surgery to stay competitive and relevant in the workplace.  In addition, a survey done by the American Society of Plastic Surgeons found that 73 percent of people believed that appearance and youthful looks play a part in getting hired or getting ahead in business.

 

Recent advances in cosmetic procedures may be fueling this trend as patients can get a freshened look with minimum downtime.  Some of the advances include:

 

  • Dysport Injections: Unlike Botox, Dysport injections are dosed by the recipient’s muscle mass and thus allow a full range of facial expressions to prevail while the appearance of wrinkles is reduced for up to four months per treatment

 

  • LifeSculpt Laser Lipolysis: LifeSuclpt employs a minimally invasive dual wavelength laser designed to target and melt fat cells, enabling most recipients to resume normal activities in a day or so with limited bruising or swelling 

 

  • Palomar 1540 Fractionated Laser: Painlessly eliminates the appearance of a wide range of scars from surgical to burns; three to four 10-minute treatments over time can erase both new and old scars

 

Let me know if I can put you in touch with a leading aesthetics physician who can talk about the latest procedures job seekers are getting to stay vibrant-looking. 

 

Best,

 

XXX P. Schnook

 

For Palomar

 

  

Posted by Jane Von Bergen @ 3:10 AM  Permalink | 1 comment
Friday, July 17, 2009

The federal minimum wage goes from $6.55 an hour to $7.25 an hour next Friday on July 24. What does it mean? It means someone working an eight-hour day will earn $58 instead of $52.40. It may mean that fewer people will get jobs -- there are some who argue that a higher minimum wage discourages hiring. Others argue that the new wage is nowhere near enough. What do you think?

According to the nowhere-near-enough analysis, the new wage means that workers are still making less than they would have in 1956, adjusting for inflation. Those same analysts say that to match the spending power of the minimum wage in 1968, workers would need a minimum wage of $9.83 an hour.  

Here's some math: Federal poverty guidelines are $10,830 for a family of one, $14,570 for a family of two and $22,050 for a family of four. One person working 50 40-hour weeks a year, without anything taken out for taxes or social security will earn $14,500 a year, under the new minimum wage.

Posted by Jane Von Bergen @ 4:15 AM  Permalink | 3 comments
Thursday, July 16, 2009

Only 11 states have a large enough Hispanic population to enable statisticians and economists to judge how the recession is affecting unemployment for Latinos. Some of the states are obvious -- New York, Texas, California. But New Jersey is among those 11, according to the Economic Policy Institute, an economic think tank in Washington tapped by President Obama. The institute slices and dices employment numbers using census data and information from the Bureau of Labor Statistics. In the first quarter, according to their analysis, the unemployment rate reached 7.9 percent in New Jersey. The Hispanic workforce fared the worst with 14 percent unemployment, outstripping African-Americans who were unemployed at a rate of 10.1 percent. Whites had a 6.5 percent unemployment rate. The institute's report was released Wednesday.

Posted by Jane Von Bergen @ 4:25 AM  Permalink | Post a comment
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About Jane M. Von Bergen
Jane M. Von Bergen covers workplace issues, health insurance and organized labor for the Philadelphia Inquirer. A longtime business writer, she is now covering her second recession. Von Bergen began her reporting career in fourth grade and then married into it, falling in love with a photographer she met working while working for her college newspaper. They have two college-age sons, neither of whom is studying journalism.
Jobs At a Loss: An Inquirer Series