Canadian Payroll Reporter

FEBRUARY 2014 12 Canadian HR Reporter, a Thomson Reuters business 2014 Published 12 times a year by Thomson Reuters Canada Ltd. Subscription rate: $179 per year Customer Service Tel: (416) 609-3800 (Toronto) (800) 387-5164 (outside Toronto) Fax: (416) 298-5106 E-mail: carswell.customerrelations @thomsonreuters.com Website: www.carswell.com One Corporate Plaza 2075 Kennedy Road, Toronto, Ontario, Canada M1T 3V4 Director, Carswell Media: Karen Lorimer Publisher: John Hobel Managing Editor: Todd Humber Editor: Zachary Pedersen zachary.pedersen@thomsonreuters.com (416) 649-9584 Marketing Manager: Mohammad Ali mm.ali@thomsonreuters.com (416) 609-5866 Circulation Co-ordinator: Travis Chan travis.chan@thomsonreuters.com (416) 609-5872 ©2014 Thomson Reuters Canada Ltd/ ISBN/ISSN: 978-0-7798-2810-4 All rights reserved. No part of this publication may be reproduced, stored in a retrieval sys- tem or transmitted, in any form or by any means, electronic, photocopying, recording or otherwise without the written permission of the publisher (Carswell, a Thomson Reuters business). Return Mail Registration # 1522825 Return Postage Guaranteed Paid News Revenue Toronto Canadian Payroll Reporter is part of the Canadian HR Reporter group of publications: • Canadian HR Reporter (www.hrreporter.com) • Canadian Occupational Safety magazine (www.cos-mag.com) • Canadian Safety Reporter (www.safety-reporter.com) • Canadian Employment Law Today (www.employmentlawtoday.com) • Canadian Labour Reporter (www.labour-reporter.com) See carswell.com for information www.payroll-reporter.com scores to a greater degree. The research concluded "the effect of performance-based pay-rates on dishon- esty depends on how readily people can compare their pay-rate to that of others." So how can these research findings help us with day-to-day compensation management? The report suggests the findings serve as a caution to employers about the po- tential hazards of sharing information on the details of individual employees' pay. The reality, however, is that while few organizations share that type of in- formation, employees do. There's also no getting away from variances in pay levels. They're a fact of life in most organizations. And they often exist for very good reasons, includ- ing differences in work experience, time on job and/or performance. Thus, the moral of the story shouldn't be that organizations should strive to pay everyone in the same job the same, al- though that might make sense is some environments. What's key is to take steps to ensure you have a sound – and defen- sible – approach for managing compen- sation. You can test for potential issues around pay fairness by asking some po- tentially tough questions: Do you have a clearly defined base pay structure that's aligned with com- petitive market practice? Do you have a budget for providing market adjust- ments, when needed? Does the organization manage pay within the context of the structure, or are there a lot of exceptions? Are there clear guidelines that gov- ern how employees progress through their salary range or wage scale? Do pay decisions align with these guidelines or do leaders and managers make a lot of discretionary pay decisions? Are there periodic reviews that as- sess how the salaries of employees in the same job compare? Can leaders and managers credibly explain differences in pay levels or does it appear that some individuals or groups are being unfairly held back or disadvantaged? Do employees understand how they're compensated and the factors that influence pay increases? You'll never be able to banish grape- vine conversations about pay, but you can take steps to ensure your pay prac- tices are consistent, well considered, and well understood. It may not stop employ- ees from comparing notes — but it may lower the volume on potential concerns. Claudine Kapel is principal of Kapel and Associates Inc., a Toronto-based human resources and communications consulting firm specializing in the design and implementation of compensation and total rewards programs. For more information, visit www.kapelandassociates.com. Pay levels must be defensible Continued from page 7 "We are also not persuaded that there were defects in the company's record- keeping system of sufficient gravitas to raise fiduciary concerns." In this case, the sponsor had a certain amount of detailed information avail- able to support its position, while the plan member was not able to support his claim with any substantial form of documentation, said Wahl. "It would appear to me that the ad- vantage lies with the sponsor simply because sponsors do generally maintain at least minimal records and documenta- tion, whereas most members don't an- ticipate making a future claim and don't have any or sufficient evidence to sup- port their position." The case is a reminder that members have a certain responsibility in retaining their own records, said Tarbox. "Even if active employees are partici- pating in plans, they have an obligation to keep their own information up to date with the administrator — so things like their personal information, change of name, address or marital status — it's important that they communicate that so that the benefits can be administered properly." Members should retain records Continued from page 8

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