WageWatch Ibrief Blog


Archive for October, 2019


An Incentiveemployee compensation plan should provide a competitive wage and reward employees fairly and equitably for behaviors while accomplishing goals and objectives for the organization.  Compensation is the reward an employee receives in return for his or her contribution to the organization.  Basic components of a compensation package include base salary, incentives, and benefits.

Organizations implement incentive plans to help reach overall goals and objectives.  Incentive plans range from variable pay plans to prizes and recognition awards.  Incentive plans can motivate employees to go beyond expectations and produce results that contribute to business success.  They also can attract new talent and encourage company loyalty.  For an incentive plan to be effective, the goals must be obtainable.

So how do you determine whether a short-term or long-term incentive is appropriate?  Short-term incentives are used to create a focus on short-term or immediate goals, and align rewards with individual and business performance.  Long-term incentives are typically designed for executives who make strategic decisions for the company.  They can ensure focus on what’s best for the organization’s future outcomes by placing importance on medium and/or long-term goals and creating a sense of ownership of those goals.  Successful incentive plans can also help organizations align rewards with shareholder interests, and help retain key talent.

Short-term incentives can be for all employee levels from entry-level to middle management to the executive level and they can be large or small and can cover a week, month, quarter, or year of performance measurements and goals.  Short-term incentives can create a better work environment and motivate employees to work to their greatest potential.  Without short-term incentives, employees may feel that their work is unappreciated, and morale can be low.  Short-term incentives align employees to work for the overall success of the company and can clearly define an employee’s specific role in contributing to that success.  Short-term incentives such as prizes, free airline tickets or hotel stays, tickets to events, or a paid day off, can have high impact.  Short-term incentives can be individual and/or team-based.  Rewarding employees for clearly defined goals can go a long way to creating happy employees who work well alone and together striving for success.

It is important to use both short and long-term rewards to produce desired results.  Incentive programs that are carefully and strategically crafted and aligned with company goals and timeframes should lead to more productive, motivated, and loyal team members.  Retaining good employees saves organizations the expense of recruiting and training new workers.

At WageWatch our compensation consultants are focused on your organization’s compensation needs and ready to help you ensure that your compensation programs are supporting your company’s business strategy and objectives.  WageWatch also offers accurate, up-to-date benefit surveys, salary surveys and pay practices data that will allow you to stay current with the times.  This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards.  For more information on our services, including consulting, salary survey data, benefit survey data and market compensation reports, please call WageWatch at 888-330-9243 or contact us online.



Does your organization have a non-compete agreement in place?  If so, has it been reviewed recently?  Non-compete agreements are driven by state laws.  Over the past year, there have been a few states that have changed their laws, with changes taking effect next year. The revisions that states are enacting move to restrict using unreasonable non-compete agreements with employees.

Washington, New Hampshire, Massachusetts, Maine, Maryland, Oregon, and Rhode Island have modified their non-compete agreements this year and are leading the way in non-compete agreement reform.  These states have not adopted a uniform approach, but each state provides some direction to other states that may be considering reform.  Reasonable non-compete agreements are helpful and often necessary for employers to hire individuals without risking that they will then lose their customers if an employee leaves and tries to take clients with them.  However, some agreements go too far and have become unreasonable.

The Washington Statute, effective January 1, 2020, will be unenforceable for employees earning less than $100,000 in total annualized compensation or independent contractors earning less than $250,000 per year.  Non-compete agreements are unenforceable for a period greater than 18 months and the terms must be disclosed to prospective employees no later the time the employee accepts an offer of employment.  In addition, the statute has several employee protection mechanisms in place, such as requiring an employer to pay an employee’s legal fees and damages should they seek to enforce an unreasonable non-compete agreement.

Potential areas to revise with a non-compete agreement include:

  • A threshold for an employer’s salary, anyone making less than the stated amount are excluded from the agreement (i.e., employees making less than $75,000 are excluded from a non-compete agreement)
  • Length of employment; an employee could not be held to a non-compete agreement if they were not employed for at least a year by the employer or terminated or laid off without misconduct
  • Employees faced with an employer that seeks to enforce an unreasonable agreement should be penalized by having to pay the employee’s legal fees and a small number of damages.  It may be a good time to review your non-compete agreement, especially to determine if your agreement is currently relative to any changes in the law that governs it.

WageWatch offers accurate, up-to-date benefit surveys, salary surveys and pay practice data that will allow you to stay current.  This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards.  For more information on our services, please call WageWatch at 888-330-9243 or contact us online.