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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.

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).

MINDFULNESS: EMBRACED BY BUSINESS

In a world where multitasking and information overload are the norms, an old idea, ‘mindfulness’, is becoming increasingly appealing to organizations who are effectively applying it to their businesses. Mindfulness is training the mind to focus. Our ability to concentrate is seriously compromised the more we multitask. And technology, though useful to us in so many ways has actually impeded our ability to concentrate or to be mindful of what matters moment by moment. If you would like to investigate further for your organization or for yourself, Psychology Today has an overview of the practice on their website (http://www.psychologytoday.com/basics/mindfulness).

Many Fortune 500 and other organizations are embracing and promoting mindfulness for their workforce. Business schools are beginning to teach mindfulness and it is included in many MBA programs. In the workplace, mindfulness is a skill that aids concentration, clarity, and equanimity. Present moment awareness keeps your mind from dwelling on the past or obsessing about the future. Becoming more aware of what is going on around you allows us to be fully focused on the task at hand and more likely to spot opportunities. Mindfulness makes us more conscious of what is going on within us, helping to identify and remove subconscious thinking that can be obstacles to success. Mindfulness also enhances creativity, innovation, and improves the brain’s ability to process information. So it is not surprising that more and more corporations are embracing mindfulness as a business practice.

To be mindful is to be aware, to be conscious, to be aware, and to appreciate the impact of one’s actions. Mindfulness is a mental state achieved by focusing one’s awareness on the present moment, while calmly witnessing one’s thoughts and feelings without judgment. Mindfulness is a 2,500-year-old tradition of Eastern cultures that now is considered a science of the mind. Many consider mindfulness to have its origins in Buddhism; however, it can be traced back more than 2,500 years ago, when Hindus practiced a range of meditations, which included mindfulness.

It may be time to consider mindfulness, as a business skill. Extensive research has been done over the last 15 years that show mindfulness is linked to psychological and physical, health. It decreases blood pressure, regulates the heart, increases the immune function, and enhances memory. It essentially rewires our brain. The idea that increasing mindfulness may lead to better decision-making deserves attention.
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.

INTERN PROGRAM BEST PRACTICES

Is your summer intern program ready to launch? A review of some important information will help to make your program a success. First, ensure your program is compliant with Department of Labor regulations regarding internships. In the last couple of years, both the federal and state governments have been cracking down on the use of unpaid interns. The use of ‘free’ interns has been significantly reduced since 2010 when the Department of Labor issued new criteria for employers using unpaid interns:

• Internship needs to be structured as a training experience, similar to a classroom as opposed to the employer’s actual operations.
• The training given to the interns must benefit of the intern, not the employer.
• Employers should see no immediate benefit from the intern’s work.
• The intern cannot displace regular employees; they should work under close supervision.
• In advance, establish that the internship is for a fixed duration of time and that the intern is not necessarily entitled to a job at the conclusion of the internship.
• There should be a clear understanding by both the employer and the intern that the intern is not entitled to wages for the time spent in the internship.

If your program includes unpaid interns, consult federal and state wage and hour web sites or legal counsel regarding regulatory compliance. In addition to the regulations, many universities and colleges have specific requirements for the internship program up to and including providing educational credit. If your intern program does not fit the regulatory criteria for unpaid interns, the same wage and hour guidelines that you follow for your hourly (non-tip) workforce will apply. Interns are often paid at rates comparable to entry level positions within the department or discipline in which the intern will work. Local market or industry salary surveys can assist you in setting competitive pay rates for your interns.

In addition to the compliance component of your intern program, below are some best practices to consider integrating into your program:

• Recruit the right candidates by having a clear and thoughtful internship description.
• Designate a program manager and a manager as well as a mentor for each intern.
• Provide structure, even when they aren’t paid.
• Hold orientation sessions for all involved.
• Provide interns with a handbook and/or website.
• Provide interns with real work that is related to their major, that is challenging, that is recognized by the organization as valuable, and that fills the entire work term.
• Consider offering flex time for the interns.
• Host social events and activities for the interns.
• Encourage team involvement.
• Conduct exit interviews.

Today’s world moves fast, and as an employer, you should constantly be monitoring and adjusting your business operations to meet the ever-changing wants and needs of your employees. 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.

HIRING STRATEGIES IN A TIGHT JOB MARKET

It is becoming increasingly challenging to recruit top talent due to the relatively low unemployment rate, the increase in job openings, and the lack of experienced candidates. These factors require that companies need to be more creative and aggressive in their hiring practices. In addition, there has also been an attitude change; it is much less of ‘who do I want’ and more of ‘who wants me’ attitude. Listed below are some tips that may help provide success in the search for new talent:

• Use multiple forms of social media: LinkedIn, Twitter, Facebook and be actively engaged. Connect to a related industry and review the posts and comments. If there is someone who stands out, you may have found a new employee

• Turn part-time positions into full-time positions

• Provide training opportunities for current employees to fill open positions

• Restructure work in ways that adapt to the new workforce; reduce education and other requirements

• Review the list of job skills and keep essential skills versus losing a perfect candidate

• Partner with a local community college and offer to speak with students; provide internship opportunities

• Participate in job fairs and get involved in the local community

• Speak at professional organizations and/or special interest meetings to meet potential candidates

• Offer incentives to current employees who refer new hires, post open positions for visibility to all employees

• Post for positions that you may have no intention of filling to gain a supply of candidates when a job becomes open

• Provide a sign-on bonus to new employees

• Ensure company website is mobile-friendly; a high percentage of searches are conducted using mobile devices

Another important factor is to understand the current perceptions of your company. It is much easier to keep current employees versus hiring new employees. It may be valuable to consider the following tactics to retain your current talent:

• Be more competitive in wages
• Provide employees stock ownership and/or stock options
• Offer training programs for current employees to enhance bench strength
• Provide a sense of organizational purpose and mission (valued by Millennials)
• Permit flexible work schedules and work at home opportunities (valued by Millennials)

During the interview process, it is more important than ever to ensure that the process is as quick as possible to not lose viable candidates; ensure ongoing communication throughout the process to demonstrate interest.

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.

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.

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.