WageWatch Ibrief Blog

Login

Blog Archives

INTERNAL PAY EQUITY COMPLIANCE

A company’s approach to internal pay equity is as important as the actual pay programs it implements. Many factors can impact internal pay equity such as internal increases remaining low while new hires demand salaries that exceed current tenured employees. Organizations should conduct periodic pay equity studies to keep on top of potential pay equity risks and ensure an understanding of the pay structure, as well as knowledge of and ability to explain pay differences among comparable employees.

When conducting your pay equity study, be aware of these five major federal laws that address equal pay:

1. The Equal Pay Act: equal pay for equal work among women and men.
2. Title VII of the Civil Rights Act prohibits discrimination on the basis of race, color, religion, sex or national origin in all employment terms and conditions, including pay
3. The Lilly Ledbetter Fair Pay Act clarifies that each paycheck containing discriminatory compensation is actionable under Title VII.
4. Executive Order 11246 prohibits federal contractors and subcontractors from discriminating in employment decisions, including compensation, on the basis of race, color, religion, sex or national origin, when contracts or subcontracts exceed $10,000.
5. The National Labor Relations Act (NLRA) protects the rights of most private-sector employees to join together, with or without a union, to improve their wages and working conditions.

Most companies keep a close eye on pay decisions, such as merit raises and starting pay and the processes that guide them. Unfortunately, tracking individual decisions might not be enough. The Ledbetter Act requires knowledge of past pay decisions that may have impacted a discrimination claim. Pay today equals the pay at hire plus all subsequent changes in pay. Comparing the current pay of employees who were dissimilar in the past means that more historical information may be needed to understand their pay differences.

Pay differences can be defended by differences in knowledge, skill, education, ability, effort or responsibility provided it is required to perform the job. Pay equity studies typically rely on the data that is available such as job title or grade, the length of time in a job, company seniority, performance ratings and increase percentages, geographic locations, education and prior job experience.

A pay equity study may involve the appropriate legal counsel, an experienced analyst as well as HR information systems and compensation specialists. Detailed analysis can point to employees who should be paid similarly but who are subject to large pay differences and will highlight additional factors that explain the difference or highlight inexplicable differences that merit adjustment. Conducting a well-designed and well-executed pay equity study using well-maintained and complete data is a good business practice that serves as an important tool in managing the risk associated with allegations of pay discrimination.

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.

KEY OBJECTIVES OF A COMPENSATION PROGRAM

Compensation can be defined as a reward earned by employees in return for their time, skills, effort, and knowledge.  Compensation includes direct financial compensation, such as:
Wages
Bonus and commissions
Indirect financial compensation such as health and welfare, retirement and leave benefits
Non-financial compensation such as job training and development
Recognition and advancement opportunities

A large percentage of the company budget is compensation, and therefore, it is a key component of the overall strategic human resource management plan.

A compensation package can include more than salary and bonus.  It can include health and welfare benefits, retirement plan, leave benefits and various other benefits and perks.  Companies that offer a mix of salary and incentives have the highest employee morale and productivity.  It is most effective to pay incentives as soon after goals are met as feasible such as monthly or quarterly incentive payments, rather than annual.  A good incentive plan should be easily understood by employees with no more than two to four performance factors.  How you train, develop and manage your employees will also drive retention and performance.

When developing your compensation program, primary objectives to consider are:

To attract the best people for the job
Retain high performers and lower turnover
Reward performance on specific objectives by compensating desired behaviors
Motivate employees to perform their best
Improve morale, job satisfaction, and company loyalty
Align with overall company strategy, goals and philosophy
Achieve internal and external equity
Comply with all pay and non-discrimination regulations

While compensation is not the only thing that motivates people, compensation that is too low will demotivate employees.  Studies have found a direct correlation between top performing companies and employees that are satisfied with their pay and benefits package.  Competitive and appropriate pay can positively impact customer service.  Employees receiving fair and competitive compensation packages are generally happier with their jobs and are more motivated to perform at their peak.  Motivated employees can add to the bottom line of the organization and contribute to growth and expansion. Studies show that motivated employees take fewer sick days and have fewer disability claims.

While there are many objectives to a successful compensation program, two key objectives are ensuring internal equity and ensuring external competitiveness.  Salary Surveys provide the necessary market data to build competitive pay structures.  Good Salary Survey data provides you with the information needed to ensure your compensation package is competitive.  Salary Surveys are an invaluable tool for the setting right compensation strategy and for following and monitoring the desired pay market.  It is important that you select the right salary and benefits surveys and market data for your employees based on where you are competing for talent in your industry and outside your industry as well as geographic location.

WageWatch offers accurate, up-to-date benefit survey data, market compensation data and salary reports 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. The PeerMark™ Wage Survey is the only Web-based custom survey tool that allows individual survey participants to select their competitive set for comparison purposes.  Our experienced compensation consultants can assist with your organization’s compensation needs.  We can help you ensure internal equity and compliance with regulations as well as help you structure your compensation programs to support your company’s business strategy and objectives.   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.

 

THE COMPENSATION MODEL

The compensation discipline seeks to maximize competitive advantage by attracting and retaining the most qualified workers to an employer.  Best practice in today’s workplace considers total compensation to include base salary, bonus or incentive plans, benefits, and non-cash compensation. A pay philosophy is a company’s commitment to how it values employees.

A consistent pay philosophy gives the company and the employee a frame of reference when discussing salary in a negotiation.  This usually requires a competitive well-rounded pay philosophy, including benefits and work life balance.  Compensation philosophies reap little reward without the knowledge and alignment to the organization’s overall business strategy.  Armed with the right information, compensation professionals can create a philosophy that will stimulate a more engaged workforce and lead to a higher-performing organization

A compensation system will price positions to market by using local, national and industry-specific survey data, will include survey data for more specialized positions and will address significant market differences due to geographical location.  The system will evaluate external equity to the competitive market and internal equity which is the relative worth of each job when comparing the required level of job competencies, formal training, experience, responsibility, and accountability of one job to another.  The system must be flexible enough to ensure that the company is able to recruit and retain a highly qualified workforce while providing the structure necessary to effectively manage the overall compensation program.

Organizations should establish and communicate clear pay policies. At a minimum, organizations need to ensure that their compensation policy adheres to employment legislation including:

Minimum wage

Overtime pay

Pay equity

Vacation pay

Holiday pay

Incentive pay

Tips and Gratuities

Pay method and pay frequency

Pay deductions

Payroll records tracking and reporting

Many organizations adopt transparency in compensation practices.  Transparency involves compensation plans that are simple to understand, easy to implement and published internally to all employees.  Many companies provide an annual Total Rewards Statement to each employee that outlines and explains all compensation elements included in their compensation package including cash and non-cash.

Bonus and incentive pay are tied to specific performance results against pre-set goals and objectives at the individual and organizational level. Results that are measured can be quantitative and qualitative. When establishing bonus schemes, organizations often apply a balanced scorecard approach: looking at financial, human resources and customer results.

A compensation model that encourages innovation should strike a balance between the risks and rewards associated with the work. Rewards programs can recognize innovation within all elements of a company and at all or the majority of employees.   When only the top 10% of high performers are eligible for recognition and associated rewards, approximately 70% of employees who fall in the middle of the performance bell curve and who are consistent performers day after day, can become discouraged and disengaged. The goal should be to properly calibrate your awards approach to reach far more employees with recognition rewards, thereby creating a culture of innovation.

Compensation is a part of the complex HR processes, policies, and procedures. Top management needs to decide, the primary role of compensation in the organization, whether it will be a supplementary role or a dominant role.  The compensation philosophy is the foundation for all organizational compensation decisions.

Maintaining a competitive advantage and being able to retain key employees is increasingly important.  At WageWatch our compensation consultants can assist with your organization’s compensation needs and 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 .

WHEN TO EMPLOY SHORT-TERM AND LONG-TERM INCENTIVES

An employee 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 the 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 big 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 work with 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 the short and the long-term initiatives 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.

NEW GUIDANCE ISSUED ON FEDERAL ANTITRUST REGULATIONS

The U.S. Department of Justice (DOJ) and the Federal Trade Commission (FTC) issued joint guidance on Oct. 20, 2016, https://www.ftc.gov/system/files/documents/public_statements/992623/ftc-doj_hr_guidance_final_10-20-16.pdf, on how Antitrust Law applies to employee hiring practices and compensation decisions.  The guidance focuses on managers and human resource (HR) professionals who are normally responsible for regulatory compliance and can, therefore, implement safeguards.  In addition, the guidance announces a significant shift in the DOJ’s enforcement policies stating that the DOJ intends to proceed criminally against “naked wage-fixing and no-poaching agreements”.  The agencies underscored the fact that violators could be pursued both civilly and criminally. The new guidance makes it clear that DOJ and FTC will look suspiciously at employers sharing information regarding terms and conditions of employment — such as industry wage surveys.

As part of their guidance, the DOJ and FTC issued what they called Antitrust Red Flags for Employment Practices. The link to these nine Red Flags is https://www.ftc.gov/system/files/documents/public_statements/992623/ftc-doj_hr_red_flags.pdf. The list is a starting point for what they will be looking for and is not exhaustive of possible indications of antitrust violations. They note that if you notice these red flags or other suspicious behavior and believe that there may have been an antitrust violation, they encourage you to report it to the DOJ and FTC.

The DOJ and FTC caution employers about sharing compensation information with competitors. While not per se illegal (like wage-fixing and no-poaching agreements), the agencies note that such information-sharing such as salary and benefits surveys conducted by industry associations and trade groups could be suspicious.  The guidance directs HR professionals to avoid sharing competitively sensitive information with competitors.  Evidence of exchanges of wage information such as discussion of compensation levels or policies at industry meetings or events could be sufficient to establish an antitrust violation.  Exchanges are permissible in certain circumstances (i.e., it may be appropriate for a company to obtain competitively sensitive information in the course of M&A due diligence), but only if suitable precautions are taken.

Statement of Department of Justice and Federal Trade Commission Enforcement Policy on Provider Participation in Exchange of Prices and Costs, an issue in August 1996, remains as the primary guidance in the exchange of compensation information for employees that will not result in a challenge of an antitrust violation by the DOJ and FTC. From an antitrust perspective, firms that compete to hire or retain employees are competitors in the employment marketplace.  Managers, HR professionals, and employees with access to compensation information should not communicate the company’s policies to other companies competing to hire the same types of employees.

Not all information exchanges are illegal.  It is possible to design and carry out information exchanges in ways that conform to the antitrust laws.  For example, an information exchange may be lawful if:

  • A neutral third party manages the exchange;
  • The exchange involves information that is relatively old;
  • The information is aggregated to protect the identity of the underlying sources; and
  • Enough sources are aggregated to prevent competitors from linking particular data to an individual source.

WageWatch surveys are fully compliant with all antitrust guidelines including aggregating the results to protect the identity of the participants, ensuring that the age of the data is at least 90 days old, and ensuring that data results contain at least 5 participants.  At WageWatch, we offer accurate, up-to-date benefit survey data, market compensation data and salary reports 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 market compensation data, benefits survey data and salary reports, please call WageWatch at 888-330-9243 or contact us online.

PAY COMPRESSION: CAUSES AND SOLUTIONS

Pay compression is when either a subordinate’s base pay is very close to or more than their supervisor’s or when a less tenured employee is equal to or paid more than a senior employee in the same position.  One of the most common causes of pay compression is when pay increases for current employees are low, but new employees are paid a higher salary to attract them.  This problem becomes more severe in economic downturns when pay increases are limited but it occurs even in better economic times.  Pay compression is most evident in pay systems where lower level jobs, either through union contracts or other market forces, create a situation where first-line supervisors are paid less, on an hourly basis, than their subordinates.

When the job market is weak, many organizations hire people who had already done the same work for another organization, eliminating the need for training. Rather than hiring people with high potential and developing them for the long term, they have opted for people who can “hit the ground running,” regardless of their potential.

When salary compression and the policies that enable it are sustained over several years, it can be demoralizing and lead to widespread employee dissatisfaction. Employers should be concerned because salary compression can transform compensation from a motivator into a de-motivator.

Salary compression may be accompanied by pay inequities which could violate equal pay regulations. In situations where newer staff earn more than experienced staff, it could create a pay equity problem if the experienced staff are a protected class.

There are steps that can limit the detrimental effects of salary compression. For instance, when a new job opens, organizations should try to promote someone from within, rather than hiring from the outside. Many organizations have policies that limit how high within a range new hires can be paid.  When new hires are brought in at higher salaries or when across the board increases are given due to market movement or minimum wage increase, have a policy that requires internal equity analysis and adjustments.

Institute a policy of transparency and calibration across units.   Disparate actions between different organizational units can create salary compression and other inequities. Transparency can take the form of a simple scorecard showing the rates of increases and promotions in each unit. Calibration can involve managers sharing planned compensation actions with their peer managers. It can also include several levels of approval for any actions before they take place so that a senior leader can spot any actions that appear suspect and will cause inequities, including compression.  This tends to create a norm and, over time, leads to decisions that are more consistent and responsible.

Salary compression can be a serious problem that eventually causes an organization to lose some of its most talented employees. Although many organizations have unintentionally allowed salary compression to take root, there are actions they can take now and in the future to keep it from reoccurring.

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.

HOW TO DETERMINE NEW HIRE SALARIES

Without established salary ranges and salary structure, setting a salary can be like spinning the roulette wheel.  Most companies have salary offer guidelines based on competitor market data and established salary ranges for positions.  Ideally, you will have these established tools and practices in place before you have to make a salary offer.  Salary scales are a valuable tool in recruiting and hiring new employees as well as providing baseline amounts in making salary adjustments for existing employees.

There are many things to consider when determining where to set a salary for a new hire including the candidate’s experience and qualifications that are either required or needed for the job, current salaries of employees in the same or comparable worth jobs, salary range, geography, industry conventions and company budget.  Other considerations may be bargaining agreements, prevailing wage contracts or arrangements, and the company’s compensation philosophy.

To determine accurate external wage comparisons, employers should carefully define the appropriate market and competitive set.  Defining the market too narrowly can result in wages that are higher than necessary. Conversely, defining the market too broadly may cause an organization to set wages too low to attract and retain competent employees. Paying prevailing wages can also be considered a moral obligation.  This focus on external competitiveness enables a company to develop compensation structures and programs that are competitive with other companies in appropriate labor markets.  Employee perceptions of equity and inequity are equally important and should be carefully considered when a company sets compensation objectives. Employees who perceive equitable pay treatment may be more motivated to perform better or to support a company’s goals.

Internal equity is of equal importance to external competitiveness when setting pay.  You want employees to feel they are paid fairly as compared to their co-workers as well as to adhere to regulations regarding pay discrimination.  If starting salaries are negotiated, ensure that such a practice does not have an adverse impact on women or minority workers.  Generally, jobs do not have to be identical for equal pay to be required, only substantially equal in terms of skill, effort, and job responsibility, and performed under similar working conditions. For discriminatory purposes, pay refers to salary, overtime, bonuses, vacation and holiday pay, and all other benefits and compensation of any kind paid to employees.  Pay disparities may be allowed under a seniority system, a merit system or a system measuring earnings by quality or quantity of production.  Hardly anyone notices when you pay “above average” compared to the outside world, but any perceived deficiency in “internal equity” can come back to bite you.

As you can see there are many factors and considerations when setting pay and it can sometimes feel like a delicate balancing act.  But doing your homework, keeping up with the external market and addressing internal pay inequities will go a long way to simplifying the task of setting new hire salaries.  It is important to ensure that the approach taken is guided by the compensation philosophy and is applied consistently. An effective Salary Administration Program allows a company to meet the basic objectives of compensation:  focus, attract, retain, and motivate.

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.

MANAGING MILLENNIALS IS CHANGING CORPORATE CULTURE

In 2015 Millennials surpassed Generation X to become the largest percentage of workers in the U.S. workforce.  Millennials are a generation that expects transparency, are driven by achieving purpose and fulfillment, prefer open communication, a great company culture, involvement with causes, and are more digital than any generation that preceded it.  Businesses seeking to engage employees in their work will now have to tailor their approaches to Millennials.

Millennials are optimistic and connected and they thrive on innovation and change.  They believe that a single person’s voice can make a difference.  Their preference is for organizations to have open, fair, transparent, and inclusive leadership styles.  They desire direct access to a number of peers and other leaders, rather than being limited to working with one leader or manager; this represents an opportunity for organizations to evolve in ways that benefit both the organization and the employees.

Millennials value leaders who place a strong emphasis on employee well-being, growth, and development, instead of controlling the work experience of each employee.  An organization’s treatment of its employees is of high importance, especially as a leadership quality for the Millennial generation.

To manage Millennials, it is important to show respect, listen to and value their ideas and complaints, including having work structures and processes in place that allow implementation of those ideas.   Millennials need attention and to know that their work and efforts are valued.  Encourage them, and help them develop confidence by giving them opportunities for success as well as turning ‘failure’ into a positive learning experience.

Face-to-face communication is important to Millennials; be sure that the conversation is a two-way street.  Listen to them and learn from them as well.  Millennials are looking for leaders who care about people.  Conversations should be a give and take and a sharing of information and knowledge.  Millennials want leaders who possess strong social skills, have vision, passion, and are decisive.

Millennials do understand productivity expectations, meeting times, project deadlines. It is okay to provide the necessary structure, but do this without micromanaging.  While they like to take projects and run with them, they also want regular and frequent feedback that includes praise, constructive critique, as well as an opportunity for learning and growth.  Millennials want to be sure their work matters in the larger scheme of things.  Millennials want flexibility with job duties and when and where they work.    It will be important to provide development opportunities as well as opportunities to work in teams.

Millennials are a generation that wants to make the world better. They want to work for an ethical company that they believe is behaving in ways to make the world better. Whether through charitable giving, paid leave to help out with charitable work, companies need to demonstrate through tangible and real actions a genuine concern for society and not only for the company’s bottom line.  Millennials want to work for a company known for doing good.

In summary, Millennials are positive-thinking with an entrepreneurial and hard-working spirit; they want their lives to matter and believe they can change the world. They are a fantastic addition to your team and the largest part of the workforce that you will need to rely on more and more into the future.

WageWatch offers accurate, up-to-date HR metrics, benefit survey data, market compensation data and salary reports 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. The PeerMark™ Wage Survey is the only Web-based custom survey tool that allows individual survey participants to select their competitive set for comparison purposes.  Our experienced compensation consultants can assist with your organization’s compensation needs.  We can help ensure internal equity and compliance with regulations as well as help you structure compensation programs to support your company’s business strategy and objectives.   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.

ARE YOU ATTRACTING TOP TALENT?

Many business owners find it to be a huge challenge to attract and retain a group of talented and hardworking employees that are loyal to the company and its mission. Finding high caliber employees with advanced skills to complete important jobs within a company is a challenge that not only exists in today’s marketplace but one that business owners have had to navigate for many years. Everyone is looking for top talent, and those companies that excel in attracting and retaining this talent are the ones that will reap the rewards. In addition to a number of other factors, businesses that retain the best employees offer great compensation and benefits packages.

To retain talent, it is essential that loyalty is established. In order to do this, the employee must feel that their job is instrumental in achieving the goals of the company, making them excited to come into work each day and give it their all. It is also important that the work the employee accomplishes is acknowledged, affirming their place within the company, and offering them opportunities for growth.

While compensation and benefits packages are one of the largest factors considered by employees, it isn’t enough to make the top talent stay. The following are a few ways that you can attract and retain the best employees at your company:

  • Promote open communication. When a company is completely open with employees, everyone will feel respected. Instead of allowing rumors to spread, let your employees know as soon as possible about anything that is going on in regards to the company. When possible, let your employees be a part of the decision-making process. A culture of open communication is very attractive to employees.
  • Provide opportunities for team building. Most employees enjoy interacting with their coworkers. By encouraging teamwork, employees are able to build great working relationships and establish a trusting, open environment for the company. When working together toward a common goal, employees are more motivated and excited about their jobs, often producing excellent results.
  • Cater to individual work style. Each employee has a different way that they prefer to work, learn and be managed. When you as an employer take the time and effort to make adjustments for each employee’s needs, they will respect the company more and loyalty will, once again, be built. This will also help you to establish teams that will work best together based on their work styles.
  • Acknowledge your talent. When an employee does a good job, it is important that you recognize them for their efforts, so they feel that they are a valued member of the team. A majority of employees leaving a company do so because they feel unappreciated. Employees want to feel that the work they are doing is making a difference, so acknowledging their work often is essential. Also, review surveys and compensation data within your industry to determine what benefits and bonuses should be awarded to your top performers.

Implementing the above suggestions will help your company to build a culture that encourages retention of employees, which in turn will attract top talent. In addition to providing a great work environment that respects employees and provides opportunities for learning and growth, it is also important that they receive a solid benefits package. At WageWatch, we provide accurate compensation and salary data for hospitality, gaming and tribal gaming, healthcare, colleges and universities as well as a wide variety of other industries. To learn more about our up-to-date market compensation data call 888-330-9243 or contact us online.

 

MOTIVATING EMPLOYEES BY JOB DESIGN

With changing demographics and a more competitive job market, human resources are more challenged than ever before to hire, engage, maintain and keep employees happy and motivated.  Workers want more choice and flexibility in how they approach tasks, for example, more opportunities to work collaboratively.  They look for more opportunities to change duties, for exploration, to learn and to advance in their career in a less linear way.    It is not only desirable but essential for businesses to have motivated employees.  Today many human resource professionals are looking at how to design jobs, work environments, and cultures that motivate employees.

Job specialization is the earliest approach to job design. Job specialization is efficient but leads to boredom and monotony. Early alternatives to job specialization include job rotation, job enlargement, and job enrichment.

Job rotation involves moving employees from job to job at regular intervals. When employees periodically move to different jobs, the monotonous aspects of job specialization can be relieved.

Job enlargement consists of making a job larger in scope by combining additional task activities into each job through expansion

Job enrichment is concerned with designing jobs that include a greater variety of work content, require a higher level of knowledge and skill, give the worker more autonomy and responsibility, and provide the opportunity for personal growth.

Research shows that there are five job components that increase the motivating potential of a job: skill variety, task identity, task significance, autonomy, and feedback.

  • Skills
    • People will be more motivated if they are using a variety of skills in their positions, rather than one thing repeatedly.
  • Tasks
    • Employees are motivated to complete tasks if they identify with them and have seen them through from start to finish.
    • When employees feel that their work is significant to their organization, they are motivated to do well
  • Autonomy
    • Employees like to be able to make decisions and have flexibility in their roles. Most employees will have lowered motivation if they feel they have no freedom or are being micromanaged.
  • Feedback
    • Employees need feedback (both positive and negative) in order to stay motivated.

The quality of life in a total job and work environment is also an important part of a positive and motivating experience for employees.  The elements included in ‘quality of life’ include open communication equitable reward system, employees’ job security and satisfaction, participative management, development of employee skill, etc.  Since a significant amount of one’s life is spent at work, jobs need to provide satisfaction for sustained interest.  Jobs provide employees not only a living but also help in achieving other goals such as economic, social, political and cultural.

The concept of empowerment extends the idea of autonomy.  The idea behind empowerment is that employees have the ability to make decisions and perform their jobs effectively.  Instead of dictating employees roles, companies create an environment where employees thrive, feel motivated, and have the discretion to make decisions about the content and context of their jobs. Empowerment is a contemporary way of motivating employees through job design.

A growing body of research on the relational structures of jobs suggests that interpersonal relationships play a key role in making the work experience important and meaningful to employees.  Interpersonal relationships can often enhance employees’ motivations, opportunities, and resources at work.

Though employees need to have some intrinsic motivation (internal motivation) to complete the tasks assigned to them in their roles, they also need to be motivated by their employers. By designing jobs that encompass all of the core characteristics, you can help increase employee motivation, in turn improving performance.

WageWatch offers accurate, up-to-date benefit survey data, market compensation data and salary reports that will allow you to stay current with the times. This information is highly beneficial in creating the best salary, incentive and benefits packages that meet or rival the industry standards. The PeerMark™ Wage Survey is the only Web-based custom survey tool that allows individual survey participants to select their competitive set for comparison purposes.  Our experienced compensation consultants can assist with your organization’s compensation needs.  We can help you ensure internal equity and compliance with regulations as well as help you structure your compensation programs to support your company’s business strategy and objectives.   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.