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COMPENSABLE TIME

Employers need to ensure they count all worked hours as paid hours for their non-exempt staff. For example, when an employee eats lunch at their workstation or desk and their lunch is interrupted by work such as answering phones or email, the employee is working and must be paid for that time because the employee has not been completely relieved from duty.

If the employer has a policy that is expressly and clearly communicated to the employee regarding a specific length of time for a break, any unauthorized extensions of that break time do not need to be counted as hours worked. Bona fide meal periods (typically 30 minutes or more) generally need not be compensated as work time. However, the employee must be completely relieved from duty for the purpose of eating regular meals.

The federal Fair Labor Standards Act (FLSA), doesn’t require employers to provide meal or rest breaks, though some states do require such breaks and the rules can also be different for younger workers. You can find a list of state meal and rest break laws at the Department of Labor’s website at http://www.dol.gov/whd/state/meal.htm and http://www.dol.gov/whd/state/rest.htm.

Employers that fall under the federal guidelines do not have to pay for meal or rest breaks unless:
• The employee works through or during their break
• The break lasts 20 minutes or less
• The break is interrupted by work

Some other compensable time under the federal rules can include waiting time, on-call time, attendance at meetings and training programs, travel time and performing work outside of work hours such as checking emails.

Waiting time may or may not be hours worked depending on the circumstances. If an employee needs to wait before a duty can start such as a firefighter waiting for an alarm, then the employee is ‘engaged to wait’ and this time is worked time and must be paid.

On-Call Time is paid time if the employee is required to remain on the employer’s premises. In most cases, the on-call time does not have to be paid when an employee is not required to remain on the employer’s premises. However additional requirements put on the on-call time that further limits the employee’s freedom could require the time to be compensated.

Attendance at meetings or training programs is paid time when any of the following conditions are true:
• It is during normal work hours
• It is mandatory (if the employee feels that they should or need to attend, then it is mandatory)
• It is job-related

Travel time may be paid time or not depending upon the kind of travel involved. Regular commute time to and from the work site is not paid time. When the employee works at a different work site location then any commute time that is greater than the employee’s regular commute time to their usual work site needs to be counted as paid time. Travel that is part of the regular work duties, such as travel from job site to job site during the workday, is work time and must be counted as hours worked. Overnight travel is work time and must be paid time.

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 and that your pay practices are fair, equitable and non-discriminatory. We can provide your business with compensation surveys and salary reports to help you establish a budget for your merit pay program, including bonuses and incentives. Our innovative company is a leader in the collection of data for surveys and salary reports, which allows us to provide services to a wide range of industries in both the private and public sector. To learn more about our compensation surveys, salary reports, and other services, please call 480-237-6130 or contact us online.

MINIMUM WAGE UPDATE JULY 2017

Voters in four states Arizona, Colorado, Maine and Washington approved ballot measures that will raise their state minimum wage by between 43% and 60% over the next few years. Arizona, Colorado, and Maine will incrementally increase their minimum wages to $12 an hour by 2020. Washington’s will be increased incrementally to $13.50 an hour by 2020.

State increases that are effective July – December 2017 include Maryland, Minnesota, New York, Oregon, Washington DC, and USVI.

State and City minimum wage increases continue to make front page news. An unprecedented number of cities and counties have moved to adopt higher local minimum wages. In addition, cities are proposing substantially higher wage levels than in past years. Cities with minimum wage ordinances include San Francisco, San Jose, Los Angeles, Chicago, Seattle (SEA-TAC), Montgomery County and Prince Georges County MD, Santa Fe, Albuquerque, and others have already approved increases. Many other cities have ordinances that become effective in 2017 and beyond.

Follow this link to the WageWatch Minimum Wage Chart with details of federal, state and local minimum wage and pending increases: Minimum Wage Chart

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.

DO YOU PAY EQUITABLY AND FAIRLY ENOUGH TO SATISFY EEOC?

You may think you are paying your employees fairly and equitably until the EEOC comes knocking at your door to perform an audit. It is commonly known that EEOC requires that all employees are treated fairly regardless of national origin, race, religion, color, sex (including pregnancy and sexual orientation), disability or genetic information. And for employers with 20 or more employees, the Age Discrimination in Employment Act requires that you treat workers over 40 the same and younger workers. To be in complete compliance with EEO regulations, none of these factors can be used when you are hiring, promoting, disciplining and laying off workers. Additionally, private employers with at least 15 employees who work for you for 20 weeks or more a year must also comply with Title VII of the Civil Rights Act and if you have a federal contract or subcontract you may be subject to EEO guidelines. Less commonly known is that fair treatment must also be extended to employees who marry someone of a different national origin, race, religion or color. What you don’t know can hurt you and therefore periodic pay equity self-audits are essential.

All forms of pay are covered by these regulations, for example; base salary, overtime pay, shift differentials, discretionary or non-discretionary bonuses, stock options, profit sharing plans, life insurance, vacation and holiday pay, travel expenses, and benefits. If an inequality in wages between men and women is found, it cannot be corrected by reducing the wages of either sex.

To properly analyze your pay practices, you need to identify all factors that influence all types of compensation. Influencing factors may include:

• Company seniority
• Length of time in position
• Service interruptions
• Skills and experience required for the job
• Education, certifications, licenses, etc. required for the job
• Performance ratings
• Pay grade or level
• Historic pay increases
• Market Location
• Employment status such as Full-time/Part-time

Pay equity analysis should be performed that includes analysis by job group or salary grade; if no formal salary structure is in place, group by jobs with similar value and worth. Also, analyze by race and by gender. Ensure all your pay decisions are well documented as well as having good document retention policies in place. Of utmost importance is that you apply your compensation practices in a consistent manner and in accordance with your policies and procedures. If audited by the EEOC, you may need to defend your pay decisions and consistency and documentation will be crucial.

To protect your organization as well as ensure fair and equitable pay to all employees, it is essential to understand and stay up to date with all the regulations, ensure policies and procedures are in place for compliance and to perform periodic compliance audits. Even if you are in compliance today, that can easily and quickly change as your organization changes and evolves. Mergers, acquisitions, and divestitures can significantly impact pay equity as well as the day-to-day business operations of hiring, terminating, promoting, transferring, and restructuring within the organization including the realignment of job duties.

At WageWatch 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. WageWatch also 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. 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.

HUMAN RESOURCES: THE GATEKEEPER FOR COMPANY ETHICS

Business ethics are important to every business and are often a component of a company’s core values. However, that doesn’t mean that the organization as a whole is ethical. To build an ethical organization, leadership must establish, and model the company’s core values. Ethics must be woven into the fabric of the organization, fully supported by leadership and integrated into the company’s philosophies, values, policies, procedures, and practices. HR departments represent the employees, their concerns, and deal with employee fairness issues. HR’s role in ethics management should be central to ensure real benefits for the organization and the employees. Human resources deal with a variety of ethical challenges that if not handled properly can damage a company’s reputation, lead to serious legal issues, and lead to a potentially high-cost impact to an organization. For example, discrimination issues, sexual harassment, and unfair employment policies can damage a company’s reputation as well as lead to a severe financial impact.

However, HR departments should not be expected to manage ethics initiatives on their own. In order for ethical behavior to become part of an organization, there needs to be a collaborative effort that also includes Legal, Audit, the top management team, and the board of directors. HR should have a primary role in the development and integration of ethics programs into key organizational activities, such as the design of performance appraisal systems, management training, and disciplinary processes.

The first step to include ethics in company policy and strategies is to put ethics on the agenda, make it part of the conversation. This can begin the process for ethics to become part of the organization’s culture, business plan, and goals. HR professionals can help leadership define ethics for the organization. For example, what are the specific types of ethical issues that impact your organization, your competitors, and your industry? This process of defining what ethics means to your organization can help determine safeguards that can be included in policies and processes such as recruiting, on-boarding, and leadership training. Ensure ethics policies are in place for issues such as discrimination, sexual harassment. and employee fair treatment. Establish and communicate expectations for your employees to ensure each employee understands their role. Communications surrounding ethics and other core values should be on-going. And of course, lead by example. HR professionals are in leadership roles and employees look to the leadership to guide their own behavior. Organization leaders need to set the example by engaging in legal and moral behaviors, and by showing their respect for the employees and for the organization. It is critical to creating a supportive environment of trust and transparency. Employees need to see fair treatment across all levels and need to trust in order to come forward regarding ethical concerns. Ethics panels can be created for the review of issues and violations.

Treating employees ethically can bring tremendous benefits to an organization. It can earn long-term employee trust and loyalty. Loyal employees gain more experience, and master processes, and become more vital to the success of the organization. Loyal employees are happier employees and can also translate into increased productivity and efficiency as well as minimize recruiting and training costs. Putting a Code of Ethics in place and encouraging leaders to model desired behaviors are important first steps toward creating an ethical organization. Holding ethics high as a core company value is key to a company’s success and longevity.

Having the appropriate employee fairness policies and processes in place is critical to maintaining an ethical organization. But it is equally important that these policies and processes are supported by fair and competitive compensation practices. For the good of your employees, it is helpful to analyze benefits survey data, compensation surveys, and salary reports. Having this information at hand allows you to plan a budget, including competitive employee salaries and benefits, which will help you to hire and retain a happy, talented team. At WageWatch, our consultants provide businesses with accurate and beneficial benefits survey data, compensation surveys, and salary reports to ensure that payment and benefits plans are on par with those in the industry. For more information on market compensation data, please call WageWatch at 888-330-9243 or contact us online (https://www.wagewatch.com/Contact/ContactUs.aspx).

WAGE AND HOUR POTHOLES

Every company should perform wage and hour audits periodically; minimally once a year and twice a year if possible. It is easier for you to catch and correct errors than to risk discovery from employees or in the event of a DOL audit. To remain compliant with wage and hour regulations it is valuable to have the appropriate checks in place, such as up-to-date written policies and procedures, periodic training for supervisors and managers, the establishment of effective complaint mechanisms, and a regular audit process should be established.

Wage and hour violations are not only costly from the standpoint of back pay and penalties but can also lead to serious employee relations issues if employees feel they are not being fairly compensated. Below are a few of the many wage and hour potholes of which you should beware.

Overtime Pay

Many missteps can occur regarding overtime pay, a few include:
• Misclassifying workers as ‘exempt’ from overtime
• Not paying ‘unapproved’ overtime
• Failing to count all hours worked, including pre and post work activities
• Failing to count certain activities as work time including working through a break
• Checking emails or performing other duties during time off
• Travel time and meeting and training attendance

Bonus or commission payments to nonexempt employees may impact overtime pay. A bonus should be included in the calculation of the regular rate of pay for the weeks which the bonus is earned. This will increase the overtime rate for these weeks. The weeks for which the bonus is earned includes all weeks covered by the bonus period. For example, if it is a quarterly bonus then all weeks in the quarter will apply.

Another consideration for computing overtime pay is when an employee works two or more jobs with different hourly rates at one or more facilities for the same employer in the same workweek. The employer must use the weighted average of the rates to compute the employee’s regular rate of pay for the purpose of calculating overtime pay.

Exemption Status / Salary Basis Test

Do you examine the duties of your salaried employees and not just their titles or how they are paid to determine whether they are exempt? Your exempt employees must pass one of the FLSA exemption tests in order to be exempt from being paid overtime. These exemption tests are based on actual worked performed and do not test based upon the job title nor what is written in the job description.

For a job to remain exempt it must pass the Salary Basis Test which ensures that improper deductions to exempt employee’s salary are not made. There are very specific rules to follow when making any deductions to an exempt employee’s salary. Also, a job that is exempt can lose exempt status when the duties and responsibilities change due to things such as staff reductions or organizational changes. Therefore it is advisable to retest jobs that are impacted by these types of changes.

Meal and Rest Period Compliance

Many state wage and hour laws require employers to provide their employees with meal and/or rest breaks. These laws specify the circumstances under which such breaks must be compensated. In some cases, state laws impose different requirements than does FLSA.

A few more potholes worth mentioning:

We have mentioned just a few of the many potholes HR professionals need to be aware when classifying jobs as exempt or nonexempt, overtime pay calculation, and rest period compliance. Here are a few more to keep in mind:
• Failing to pay employees on day of termination
• Failure to follow rules for On-Call pay;
• Improper use of ‘Comp Time’
• Unlawful deductions from employee paychecks.

Be sure to consult your federal and state wage and hour resources and/or your wage and hour counsel to ensure a thorough and correct understanding of wage and hour rules.

Remaining compliant with wage and hour regulations is an important task that Human Resources and Compensation department performs for an organization. Another important task performed is to ensure fair and competitive pay practices. For the good of your employees, it is helpful to analyze benefit survey data, compensation surveys, and salary reports. Having this information at hand allows you to plan a budget, including competitive employee salaries and benefits, which will help you hire and retain a happy, talented team.

At WageWatch, our expert evaluators provide businesses in a large range of industries with accurate and beneficial benefits survey data, compensation surveys, and salary reports to ensure that payment and benefits plans are on par with those in the industry. For more information on market compensation data, please call WageWatch at 888-330-WAGE (9243) or contact us online (https://www.wagewatch.com/Contact/ContactUs.aspx).

EFFECTIVE JOB DESCRIPTIONS

Job descriptions describe the major duties and responsibilities of a position or job and are an essential part of hiring and managing employees. They are tools to help your applicants and employees understand their roles and accountabilities. They can be used to establish a training checklist for new incumbents, as guideposts in the performance appraisal process, and as market benchmarks for compensation surveys. Job descriptions are not required by law, however, they can provide evidence of the essential functions of a job for purposes of complying with federal employment laws. They can also be used for disability and worker’s compensation claims. It’s good practice to get legal advice to ensure that your job descriptions are compliant. Below are some of the legal requirements to keep in mind while writing your job descriptions.

• Fair labor standards Act (FLSA): Exempt or Non-exempt classification should be included in all job descriptions.

• Occupational Safety and Health Act (OSHA) and the Americans with Disabilities Act (ADA): Working conditions and any required physical activity should be noted in all job descriptions.

• Equal Employment Opportunity: Include, “we are an equal opportunity employer” in all job descriptions.

• Age Discrimination in Employment Act (ADEA): Job descriptions should not indicate age preference.

The first steps in writing job descriptions are the data collection and job analysis processes which begin with questionnaires and/or interviews with both the supervisors and current employee incumbents to gather and determine the key facts about the job. You will need to collect information that will later be summarized in your job description template. Generally, the data will include Job Title, Immediate Supervisor, Department, Pay Grade, Working Hours, and Travel Requirements, FLSA Status, Mission/Summary, Essential and Non-Essential Tasks and Responsibilities, Supervisory Responsibility, Job Requirements (education, skills and experience required for the job), Working Conditions, Physical Demands, Equipment Usage, and Disclaimer for Management Ability to Modify.

A job description should be practical and summarize the key elements of a job in a clear, concise manner. Be specific and avoid using subjective adverbs or adjectives such as “frequently,” “some,” “occasional,” and “several.” It’s important to build flexibility into a job description and ensure that it is dynamic and functional. Flexible job descriptions will allow your employees to evolve within their positions as processes, technology, and organizational changes occur. A well-written job description will require an investment of time and effort to accurately reflect your organization and unique jobs.

The duties list should contain each essential job duty or responsibility that is critical to the successful performance of the job. The list should be prioritized with the most important listed first down to the least significant. Do not include tasks that comprise less than 5 percent of the overall time. Each Essential and Non-Essential Duty should be assigned a percentage of time and all duties together should total 100 percent. Each duty should be described in one to three sentences; the first sentence should begin with an action verb. Generally, there are one or two non-essential duties that total five to ten percent of the total time and are duties such as “Assist in special projects as required” or “Any other task assigned by the supervisor.” This provides flexibility to change duties over time and captures occasional and unforeseen needs that arise.

At WageWatch 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. WageWatch also 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. 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.

FAMILY MEDICAL LEAVE ACT (FMLA) AND JOINT EMPLOYMENT

Joint employment exists when an employee is employed by two or more employers who both benefit from the employee’s work and are sufficiently related or associated with each other. The analysis for determining joint employment under the FMLA is the same as under the FLSA.

Joint employment can exist when employers have the arrangement to share the employee’s services or when one employer acts in the interest of the other in relation to the employee. Joint employment is based largely on the degree of association between the employers and how they may jointly control the employee.

Factors key to determine joint employment include:
1. Do the employers have any overlapping management or share control over operations;
2. Is supervisory authority over the employee shared and/or do they share clients or customers?

According to the Department of Labor’s fact sheet, employees who are jointly employed by two employers must be counted by both employers in determining employer coverage and employee eligibility under the FMLA, regardless of whether the employee is maintained on one or both of the employers’ payrolls.

When joint employment is determined, one employer will be deemed primary and one will be secondary. The employee’s worksite which the employee is assigned and reports to is the primary employer. However, if the employee has physically worked for at least one year at a facility of a secondary employer, the employee’s worksite is that location.

Under the FMLA, the primary employer is responsible for following and administering the FMLA for the employee including 1) providing required notices, 2) providing FMLA leave, 3) maintaining group health insurance benefits during the leave, 4) restoring the employee to the same job or an equivalent job upon return from leave, and 5) keeping all records required by the FMLA with respect to primary employees.

The secondary employer, whether an FMLA-covered employer or not, is prohibited from interfering with a jointly employed employee’s exercise of or attempt to exercise his or her FMLA rights or from firing or discriminating against an employee for opposing a practice that is unlawful under the FMLA. The secondary employer is responsible in certain circumstances for restoring the employee to the same or an equivalent job upon return from FMLA leave and they must keep basic payroll and identify employee data.

WageWatch offers accurate, up-to-date HR metrics, 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.

LINKING PAY PRACTICES WITH BUSINESS OBJECTIVES

Compensation plays a critical role in organizations’ ongoing and increasingly challenging efforts to attract, retain, and motivate a talented workforce. Compensation design and management play a vital role in aligning employee behavior with business objectives. Human capital costs represent a significant part of most organizations’ cost bases and need to be spent as effectively as possible. It is vital to understand the consequences pay decisions can have on your organization.

Salary structures are an important component of effective compensation programs and help ensure that pay levels for groups of jobs are competitive externally and equitable internally. A well-designed salary structure allows management to reward performance and skills development while controlling overall base salary cost with a salary range cap. Market pricing is the most common method companies use to design base salary structure ranges using external market data combined with a focus on internal pay equity. The goal of market pricing is to keep the organization from 1) underpaying, resulting in losing talent to competitors, or being unable to attract the talent it needs and, 2) over-paying which wastes organizational resources and impedes desirable turnover. The secret to effective market pricing is the ability to spot and adequately analyze and level the data anomalies and imperfections using both science and experience.

Some organizations elect to pay lower than the market and offset lower than market wages with offers of ‘good’ benefits, meaningful work, and stability. This practice can lead to employee disengagement and organizations risk losing people. Also, the organization will likely attract people who couldn’t get ‘better’ jobs with higher pay. One of the key determinants of job satisfaction or dissatisfaction is how employees feel their pay package compares to others.

Pay-for-performance programs are used to award employees for desired behaviors and outcomes and they take many forms, including cash bonuses, company stock, and profit sharing. Pay-for-performance plans have a learning curve, and they require regular maintenance in order to be and remain effective. Incentive compensation plans need to align with the company’s business strategy, mission, goals, and objectives. They should address root causes of performance and the goals must reflect a balance of financial results and the key business drivers. Payout opportunities should be both consistent with the performance value and meaningful to employees.

While pay-for-performance plans provide a financial incentive to employees, there can be disadvantages. If not crafted carefully, they can cause employees to focus more on quantity over quality. They may impede teamwork if workers view helping another employee as wasting valuable time that could be spent on reaching their own goals. And just like base pay, incentive pay should be competitive with the market or it could fall short of motivating the employees.

Smart, successful organizations do the regular planning and evaluating of their compensation and performance rewards systems. Compensation is visible and important to employees. It is critical to have a solid and competitive pay strategy where pay decisions and policies match the objectives of the organization. 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.

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.