Perception of Equitability Is Vital to Staff Motivation

Q. The department in which I work has staff members who were hired at various times over the last 10 years. Their starting pay rates reflected the job market and experience at the time they were hired.

New hires with no experience are coming in at several dollars an hour more than what others in the department are making, even though these existing employees have a couple years of experience and are strong contributors.

Companies do not generally correct these disparities just for the sake of paying everyone consistent rates. Attempts at correcting the disparities during performance reviews are difficult at best. Someone would have to be outstanding to get a much bigger share of the funds available. Newer staff members at higher pay rates who have done well also expect to be fully acknowledged for their contributions.

How can we keep seasoned staff members and have employees feel they are being treated fairly? I do not want to see a seasoned staff member leave us in order to receive pay consistent with the current job market.

--T.L., Newport Beach

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Research has shown that perceptions of equitable treatment in the workplace, including feelings that one is being compensated fairly in comparison to others, can have a major effect on work motivation and job satisfaction.

Some workers, especially those who are more sensitive to equity/inequity issues, may try to find ways to “even the score” by reducing their work output, by being tardy or absent more, or by being less concerned about the quality of their work.

If the inequity is perceived as extreme or unchangeable, workers may look for employment elsewhere. If the inequities continue, this is always going to be a concern.

One way to correct the disparities is to think about job rewards more broadly. Rather than just focusing on pay, are there other kinds of “compensation” that can be given to the more senior employees, such as additional benefits or bonuses, more flexible working schedules, or extra vacation days?

It is also important to be upfront with workers about the situation rather than keep them in the dark. Let them know that you are trying to make the situation more equitable.

--Ron Riggio, director

Kravis Leadership Institute

Claremont McKenna College

Contractor or Employee?

Q. What is the difference between an independent contractor and a company employee? I work in new-home sales for a builder and receive a daily pay rate. My employer defines the entire sales staff as independent contractors and gives us a 1099 form, with our compensation stated as nonemployee expense. There are no payroll deductions. However, we are required to fill out a time card every two weeks and must report in at 9:45 a.m. and stay there until 6 p.m.

--G.B, Chino Hills

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A. This is an area in which many employers make mistakes. Many assume that just calling someone an “independent contractor” makes that person one, and that, by signing an agreement with someone providing he or she is an independent contractor, the employer can avoid normal employment responsibilities such as making withholding deductions, paying overtime or worrying about laws prohibiting employment discrimination.

Not true. Whether someone is an independent contractor depends on a variety of factors.

The most important are:

* Who really controls how the job is done? If the employer sets the hours, describes how the tasks are to be accomplished, disciplines/directs the individual when it is not done to the employer’s satisfaction, the relationship is probably one of employer-employee, not independent contractor.

* Does the individual have any investment in tools, equipment, etc.? Or does the employer supply all necessary materials for the job? The less investment that the individual has, the more the relationship looks like one of employer and employee.

* Is the work part of the employer’s normal business? Or is it not related to normal operations? Someone who is hired to fix the plumbing in the employer’s plant would be more likely to be considered an independent contractor than someone who is hired to work alongside the employer’s other regular employees, performing an integral part of the normal workload.

* Is the individual required to do the work himself, or can he hire others to assist him? If the individual must do the work himself, he is more likely an employee rather than an independent contractor.

* Is the individual allowed to work for others? If he is required to work exclusively for one employer, he is more likely to be an employee.

* Does the individual possess any specialized skills or knowledge? If not, he is more likely to be considered an employee.

The more factors in your case that point to employee status, the more likely it is that you are an employee.

--Michael A. Hood

Employment law attorney

Paul, Hastings, Janofsky & Walker