Research

Want an effective workforce? Reward performance appropriately—with the help of NICS

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Robert J. Greene
Robert J. Greene

How effectively any organization defines, measures, manages and rewards performance will have a major impact on the effectiveness of its workforce. And no media organization can succeed without the help of its most important asset—its people.

During difficult economic times, organizations often turn to cost reduction as a way to offset decreased revenues. When short-term profitability is needed this is a logical strategy. But reducing the volume of paper used and finding more economic ways to handle logistics have been a focus for some time and other sources of reduced costs are still needed. Turning to one of the largest controllable costs (people) is certainly a rational action. But the cost of employees is often in the form of relatively fixed costs (wages/salaries and benefits), which means staffing levels must be examined. The alternative is to reduce wages/salaries and to cut the costs of benefits.

Organizations in all industries have faced this challenge over the last decade because of the economic crisis. Employees have been asked to contribute more to the cost of their health care insurance. Defined benefit pension plans have been replaced by defined contribution plans. Employer matches to defined contribution plan contributions have been reduced. But very few organizations have cut base pay. Even though the “employment at will” doctrine is dominant in the U.S. and there are few legal/regulatory obstacles to reducing base pay, both employers and employees generally view current rates as being regulated by emotional, if not legal, contractual agreement. Employees establish their standard of living by counting on base pay, which is assumed to be inflexible downward. Reductions can exact financial turmoil. Many organizations have slowed the growth of fixed cost base pay by implementing variable pay programs that are often based on the organization’s performance, which impacts its ability to pay. But variable pay plans are rare in the newspaper industry, other than for management and direct sales personnel.

The other option is reducing staff size or having work done by parties other than employees. Outsourcing activities, using shared printing and distribution agreements, utilizing “gig-ers” to do project work and other approaches can reduce costs, or at least tie costs to the amount of work to be done. The increased use of allocating work to outsiders is certainly not new to the newspaper industry; stringers have been common for as long as one can remember. So it is theoretically possible to cut newsroom employee headcounts by using outsiders. And each organization must decide the feasibility of that option, considering the likely impact on the quality of the journalistic product.

There will continue to be employees. The cost of employing people will be impacted on both their rates of compensation and their productivity. Decisions regarding pay rates must be based on each organization’s competitive market for talent and its posture relative to prevailing compensation rates. Base pay is a major component of an organization’s value proposition when it competes for talent. Paying too little will result in an inability to attract and retain the quality of talent required. Paying too much may ease attraction and retention but there is not strong research evidence that paying even 10-15% above market rates may not have much impact, since benefits and other considerations are also important. So it is crucial for each organization to be able to determine what competitive pay rates are for various occupations.

Inland’s Newspaper Industry Compensation Survey (NICS) has been the tool used by newspapers to determine competitive rates for over 15 years. But the value of a survey is directly determined by the quality of the sample it contains. Each user wants the data from its direct competitors for people to be included, so that there is a high confidence level in the results, confidence that they are accurate and that they are relevant to the organization.

Inland understands the reshuffling of job responsibilities has reduced the number of papers that have people filling many jobs. For example, many groups have created regional publishers, which means many individual papers do not have an incumbent in the publisher job. And outsourced activities will result in a reduced number of incumbents in some jobs.

There is a review underway that will better match the jobs included in the NICS with the jobs that currently exist in the field. Jobs with small data samples will be eliminated from the survey, since the aggregated data does not have statistical credibility. Some jobs will be combined. The result will be a more streamlined survey that will be faster and easier to provide data for.

We welcome any input from you as to your compensation survey data needs and how NICS can better accommodate them. Please provide us with your ideas so we can make the 2019 survey as valuable for you as it can be.

Robert J. Greene is the CEO of Reward $ystems Inc., a Glenview, Illinois-based consultancy that works with organizations on formulating, designing, implementing, administering human resource management strategies and programs. He is a faculty member for professional development programs with the Society for Human Resource Management (SHRM).