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WHAT’S NEXT…JOINT EMPLOYMENT REDEFINED?

Joint EmploymentHave you noticed the flip-flop on Joint Employer Standards from the National Labor Relations Board (NLRB)?  Currently, the standards are in flux.  In 2015, the definition of a joint employer was modified and expanded based on the Browning-Ferris Industries case.  This case changed over 30 years of precedent that had required “direct” and “immediate” control over an employee’s working conditions to “indirect” and “potential” control as the new definition of joint employment.

Under the Browning-Ferris standard, even if two entities never exercised joint control over the essential terms and conditions of employment, and any joint control was not direct and immediate, there could still be joint employers based on: (1) the existence of reserved joint control, (2) indirect control, or (3) control that was limited and routine.  Browning-Ferris was considered controversial and criticized by many employers and business groups.

In December 2017, in an attempt to rein in what was perceived as a broad and vague standard, the NLRB re-established the pre-Browning-Ferris standard in the Hy-Brand Industrial Contractors case which returned the former joint employer test requiring “direct” and “immediate” control.

To the dismay of many in the business community, in February 2018, due to an alleged conflict of interest, the NLRB vacated the Hy-Brand case, leaving Browning-Ferris as the law of the land once again.  Prior to Browning-Ferris, the NLRB relied on decades of legal precedent to set the joint employment standard.

In May 2018, the NLRB announced its intention to clarify the joint employer standard by issuing a new rule to reinstate the pre-Browning-Ferris joint employer standard.  On September 14, 2018, the NLRB published a Notice of Proposed Rulemaking (NPRM) in the Federal Register regarding its joint-employment standard (allowing 60 days for public comments).  The proposed rule reflects a return to the previously longstanding standard that an employer may be found to be a joint-employer when the following condition exists:

    • A joint-employer of another employer’s employees exists only if it possesses AND exercises substantial, direct and immediate control over the essential terms and conditions of employment and has done so in a manner that is not limited and routine. 

 The 60-day period for public comments continues through November 13.  After the NLRB reviews the public comments and replies, it will issue a final rule regarding the joint employer standard.  If issued without substantial changes, this rule will provide employers with a more clear and consistent standard and reduce the likelihood of an employer inadvertently becoming a joint employer.

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.

ALIGNING COMPENSATION WITH COMPANY CULTURE

Many organizations today are focusing on their company’s culture including determining their culture, deciding what it should be, aligning it with strategic goals, and transitioning to the desired culture.  Culture is important because it reinforces the values of the organization, which in turn shapes team members’ behavior.  There are many success stories of companies with cultures that are aligned to their business goals including Google, Zappos, and Patagonia.  These companies have developed a culture that supports their business as well as their culture.

Organizational culture is the collective behavior of the people who are part of the organization and has important effects on the morale and motivation of the organizational members.  It includes the values, norms, systems, beliefs, attitudes, and habits of the organization which impacts the interactions of the employees with each other, and with customers.  Even before you define it, you know it is there and that it has an impact on your business. This is why it is so important to internalize the culture and understanding when company activities are in sync or not in sync with the culture.

Once the company values and desired culture are defined, compensation can support and help drive the values and corporate culture.  It is important that the role of compensation in an organization and the compensation strategy are also defined.  For example, where does the organization want to set pay levels in comparison to the competitive market?  Perhaps the organization’s culture is strong in training and developing its employees, acknowledging their successes and offering advancement opportunities. This, in turn, may allow the organization to set lower pay levels than what is paid in the market.  Of course, when recruiting it is important to align the compensation strategy to support the values of the culture through highlighting performance management, performance appraisals, and the goal-setting process for each team member.

Once values, business objectives, and desired behaviors are determined then compensation plans can be put in place to support the culture.  For example, if the business objective is innovation and the desired behavior is risk-taking, then short-term incentives may be the compensation strategy.  If the goal is for a highly trained workforce and the behavior is learning and upgrading skills, then skill or competency-based pay may be the compensation strategy.

Corporate culture is about people’s behaviors – how goals are accomplished – so as to establish a culture that drives company success, organizations should link a significant component of their compensation systems to behaviors.

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 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.

 

 

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 competitive 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 similar 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. This information is 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.

Posted in Uncategorized on March 21st, 2018 · Comments Off on HOW TO DETERMINE NEW HIRE SALARIES

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 is 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 has 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.

Change can be challenging and demanding.  At WageWatch our compensation consultants can assist with your organization’s compensation needs and help ensure your wages and salaries are supporting your company’s business strategy and objectives.  In addition to our PeerMark Salary Survey for over 100 local lodging markets in the U.S. and Canada, we offer a National Benchmark Salary Survey.  With over 9,000 hotels and 200 casinos in our database, WageWatch’s hotel and gaming salary surveys are the most comprehensive surveys available to Human Resource professionals.  For more information on our services, including consulting, salary surveys, benefit surveys, and custom compensation reports, please call WageWatch at 888-330-9243 or contact us online.

Posted in Uncategorized on March 14th, 2018 · Comments Off on THE COMPENSATION MODEL

ASKING ABOUT SALARY HISTORY COULD SOON BE ILLEGAL

It has long been customary for employers to gain salary history from job applicants to help determine an applicant’s qualifications for a position.   Some employers have requested W-2 forms have in order to gain an accurate picture of an employee’s background and determine if an applicant’s salary history is in line with is being offered. Federal laws do not prohibit requesting the information, however, some states and cities have already taken steps to outlaw employers from requesting salary history.

With the objective of pushing to fight wage discrimination and the gender pay gap, a bill was recently introduced in Congress that would ban salary questions across ALL states.  The bill forces employers to develop salary offers based on job requirements and market pay levels rather than an applicant’s current salary or salary history, which may be lower than current market rates for some individuals’ skill and experience.

The following cities and states have banned salary questions by public and/or private employers:  (*Effective Date; E.D.)

  • California – (E.D. Jan 2018); banned private and public employers from asking about pay history
  • Delaware – (E.D. Dec 2017); banned ALL employers from asking salary history
  • Massachusetts – (E.D. Jul 2018); prohibits ALL employers from inquiring about pay history
  • New Orleans – (E.D. Jan 2017); banned inquiries from city departments and employees of contractors who work for the city
  • New York City – (E.D. Oct 31, 2017); banned public and private employees from asking salary history
  • Oregon – (E.D. Jan 2019); will ban ALL employers from inquiring about salary history
  • Philadelphia – (E.D. was May 23, 2017—on hold) bans ALL employers from asking salary history; halted from going into effect by Chamber of Commerce; still pending
  • Pittsburgh – (E.D. Jan 30, 2017); Bans only city agencies from asking candidates’ pay history
  • Puerto Rico – (E.D. Mar 2018); bans employers from inquiring about pay history

When an employer ceases to rely on salary history of an applicant, it requires making a clear, market-based case for pay, the challenge falls on the employer.  It will be important to create a salary range for each position and ensure that the variations within those ranges are based on things like merit, education, and experience. Some companies welcome a strictly market-based approach to making salary offers as it has the ability to foster greater transparency.  Whether or not your jurisdiction is covered by the new laws, the trend is increasing and may soon impact your organization.

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.

Posted in Uncategorized on February 14th, 2018 · Comments Off on ASKING ABOUT SALARY HISTORY COULD SOON BE ILLEGAL

HAS THE #METOO MOVEMENT IMPACTED YOUR HARASSMENT POLICIES?

Up to 86% of women report that they have been sexually harassed at work, based on a 2016 Equal Employment Opportunity Commission (EEOC) report.  The #MeToo Movement is creating an environment that provides a feeling of a support group, that you are not alone if you come forward.  The impact of this movement carries over to the workplace with the pitfalls of harassment being great; including millions of dollars in settlements, low employee morale, high-job turnover, increased sick leave, and low productivity.  According to the 2016 EEOC report, it indicates that employers paid $699 million to workers alleging harassment going back to 2010—which does not include indirect costs such as lower productivity or high turnover.  Federal law caps the damages at $300,000, however, under many state laws there are no limitations and juries have awarded substantial verdicts in egregious cases.

There is now a definition in Wikipedia of the Weinstein effect– defined as a global trend in which people come forward to accuse famous or powerful men of sexual misconduct.  The Institute for Corporate Productivity conducted a survey among professionals to gauge how Human Resources are helping their organization handle the impact of this movement.  Information from the survey concludes that one-in-five organizations are taking steps to prepare to handle an increase in new (and renewed) sexual harassment claims, a quarter of respondents report that they have a plan in place or are devising one.  Over 70% of respondents state that their sexual harassment training is mandatory with half indicating that the training is effective.  Only half of the respondents report that they trust HR to handle sensitive issues effectively.

Organizations need to determine how to move forward with their previous policy and what changes need to be made.  Questions to consider include:  What constitutes crossing the line?  Are there degrees and distinctions?  Employers need to use clear, concrete language to communicate standards of behavior to employees in the workplace that are unacceptable.  Some steps to take to review policies include:

  • Develop clear, concrete language to communicate standards of behavior in the workplace among colleagues, vendors, and clients
  • Update training and policies on training; no more ‘click-through training and complete as fast as possible’
  • Provide an extra level of training to managers as they are likely to receive the complaints
  • Determine how incidences should be reported (ombudsman, hotline, or third-party)
  • Improve reporting procedures so transparency makes the “whisper network” visible
  • Be accountable—not just the perpetrator but by the bystander as well. Men and women who see harassment in action should let the victim know they are supported
  • Encourage the CEO to develop and distribute an email to employees affirming the company’s zero tolerance against harassment and ensure that the CEO backs it up

An example of the recent impact of the movement was reflected in changes some organizations made to their annual office holiday party in December–it was scrutinized much more closely. A survey by an outplacement consulting firm found that only 49% of companies planned to serve alcohol, down from 62% in 2016.  Other companies’ limited alcohol drinks by providing two drink tickets.

Overall, due to the current environment and openness toward communicating harassment, it is expected to be on the rise in 2018.  It will be important for your organization to review current policies and procedures, training, and communication of the company’s zero-tolerance policy.  Companies need to take accountability for not only acknowledging it but also being part of the solution.

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.

Posted in Uncategorized on January 24th, 2018 · Comments Off on HAS THE #METOO MOVEMENT IMPACTED YOUR HARASSMENT POLICIES?

BEST PRACTICES FOR BONUS COMMUNICATION AND DELIVERY

The primary purpose of an annual incentive or bonus plan is to drive and reward behaviors that have an impact on the operating success of the company.  When designing your incentive plan you need to have a clear measurement system for what success is in your company and then make sure the measurements are meaningful to the employees who are doing the work.  For any incentive plan to be effective it needs to be meaningful and have clarity relating both to the plan provisions and to the results needed to earn and maximize an award and the award should be attainable.  Employees need to see a link between how their job performance affects results, and the award amount needs to be sufficient enough to motivate.

Generally, two to four performance metrics are included in a bonus plan design.  The metrics are primarily financial, though quantifiable business objectives can also be used. Corporate or business unit financial metrics are used to fund the incentive pool, and individual performance measures may also be used to determine final individual payouts.  Results that are measured can be quantitative and qualitative, such as customer service quality, the number of customers served, the effectiveness of programs, etc. Often a balanced scorecard approach is used.

Employers should give careful attention not only to the design but also to the implementation and communication of incentive programs.  The most common pitfall when creating a bonus program is inadequate communication.  Bonus plan communications should be both clear and timely.  Make sure the plan is communicated prior to the beginning of the bonus period and this initial bonus communication should address the structure of the plan, decision-making criteria, fairness, measurability, and target.  Equally important are follow-up communications regarding the progress toward attainment of the goals that should happen at frequent and regular intervals throughout the bonus plan period.  You want your employees to have an on-going understanding of where they are and what they need to do to meet and/or exceed their bonus target.

When bonuses are paid or awarded, clear communications again are very important.  Managers should have individual meetings with each bonus plan recipient and clearly communicate the outcome of the incentive period.  Whatever the amount, be sure to let the recipient know that he/she is valued.  Be sure to discuss specific accomplishments and strengths that went into the bonus award.  If the employee was expecting more, be sure to emphasize the broader context of the company’s approach to bonuses.   Let each person know how the bonus was calculated.  No matter what the award is, the conversation regarding the award amount is an opportunity not only for clarity and understanding, but to thank the individual for their hard work and to hopefully improve morale and motivate for future performance.

Employees want to know they are being fairly compensated for their work and their job performance.  Bonus plans that are meaningful to your employees and aligned with the bottom line of your company can help build morale and drive behaviors that are critical to the success of the company.

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.

Posted in Uncategorized on January 10th, 2018 · Comments Off on BEST PRACTICES FOR BONUS COMMUNICATION AND DELIVERY

MINIMUM WAGE UPDATE – JANUARY 2018

The current federal minimum wage, under the Fair Labor Standards Act (FLSA), is $7.25 per hour which has been in effect since July 2009.  States have the ability to set a rate that is higher than the federal minimum rate and employers are obligated to pay the higher rate.  Currently, there are 29 states that have laws at the state or local level mandating higher pay than the federal rate.

On September 15, 2017, the Department of Labor published a notice in the Federal Register that Executive Order 13658, effective January 1, 2018, increase the minimum rate generally payable to workers performing work on or in connection with covered federal contracts to $10.35 per hour.

Also, voters across many states approved ballot measures to raise their state minimum rates over time, with increases occurring through 2020.  In 2018 there are 23 states, cities, or counties that scheduled an increase in their minimum wages.  There are 19 states which have an increase that takes effect on January 1, 2018, including:  1) Alaska, 2) Arizona, 3) California, 4) Colorado, 5) Florida, 6) Hawaii, 7) Maine, 8) Michigan, 9) Minnesota, 10) Missouri, 11) Montana, 12) New Jersey, 13) New Mexico, 14) New York (city/county only), 15) Ohio, 16) Rhode Island, 17) South Dakota, 18) Vermont, 19) Washington.

States with increases occurring on other dates in 2018 (typically on 7/1/2018) include:  1) Illinois (city/county only), 2) Maryland, 3) Nevada, 4) Oregon, 5) Washington DC.

For more details, click on the following link to view the WageWatch Minimum Wage Chart with details of federal, state and local minimum wage increases:  WageWatch – U.S. Minimum Wage Increases.

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.

Posted in Uncategorized on January 3rd, 2018 · Comments Off on MINIMUM WAGE UPDATE – JANUARY 2018

GET MORE OUT OF YOUR TURNOVER METRIC

Most HR departments miss an opportunity when it comes to measuring and reporting turnover.  The goal of any HR metric is to provide information on how to improve the measured item.  As Peter Drucker said, “what gets measured gets done.”  Reporting turnover as simply a percentage of the workforce can be made more meaningful and more useful by diving down into the detail and adding data and information that quantifies the cost and provides insight on root causes and how to make improvements.  Some examples of this are:

  • Along with your company’s turnover rate, add the turnover rate of competitors, giving a baseline or something to compare to
  • Add the percentage of turnover among top performers or top sales people, the percent of turnover in each department and for each manager, the percent in high impact jobs and hard to fill jobs
  • Add the percentage of turnover in the first year of employment, which can be linked to possible employee dissatisfaction
  • Add how long it takes to fill positions, the recruitment cost of filling the positions, and how long before they are up to the minimum productivity level
  • Add exit interview information such as how many went to work for competitors and which competitors. Exit interviews may also indicate whether turnover was preventable, which may, in turn, provide managers with information needed for improvement
  • Add the dollar impact of lost sales where applicable, i.e., sales turnover, which can be directly linked to revenue and economic impact to the company

The involuntary turnover metric is also important.  It can indicate that the company is keeping low performers which can also be costly.  With this additional information, conclusions are now more easily drawn and the cost of turnover is more tangible (i.e., the cost of losing individuals in key positions is likely higher than losing individuals in low-impact positions).  If losing hard to fill jobs, the job market may be tight and replacing these employees could be expensive.   Losing individuals with strong reputations within the industry can impact stock analysts’ assessments of your firm.  It can also send negative signals throughout your firm and the industry.

Some additional information that can be helpful when included with the turnover report, include:

  • Leading causes of preventable turnover
  • Satisfaction or frustration levels of those who left which could impact the company’s external image
  • Lowest turnover rates within the firm which can provide a target for managers to aim
  • The likelihood that the person that left will take others with them

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 salary survey reports and pay practice 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.

Posted in Uncategorized on July 5th, 2017 · Comments Off on GET MORE OUT OF YOUR TURNOVER METRIC

WHEN DOES SALARY MOTIVATE EMPLOYEES?

Studies have shown that salary can just as easily de-motivate employees as motivate them.   In fact, salaries generally operate as negative reinforcement rather than positive.   For example, an employee receiving a lower than expected merit increase or bonus payment can certainly de-motivate.  On the flip side, receiving the status quo merit increase or bonus amount every year can create an entitlement mentality.  However, when it comes to motivating employees, salary is always one of the top factors, and therefore, it has to be part of your total rewards strategy.  Many believe that the amount of money that is needed is at least enough to satisfy basic needs which vary by person.  Obviously, when salary does not, at a minimum, cover essential needs, this serves to de-motivate.

In this article, we will focus on monetary rewards. Motivated employees make a difference to the workplace.  They affect the working environment positively as well as improve customer service, sales or production.  So, how can you determine if the salaries you are paying are motivating your workforce?

First, determine where to focus your compensation spending plan.  This can vary depending on factors such as the current economy, the competitive environment, and where the company is in its life-cycle.  For example, a growing company with variable sales and income may be better off focusing on base salaries.  When business is good, it may be prudent to tie more bonus dollars to goals achieved.

Second, do your research, know your competition.  Every organization can benefit from reputable industry salary surveys such as the WageWatch PeerMark™ and Benchmark reports, to determine competitive salaries.  You should utilize salary survey data from the local market, your industry and from organizations of similar size.  Work within your organization’s salary philosophy and the given financial situation to determine where to set salaries.

In addition to looking externally to market competition, look internally to ensure your internal pay structure and salaries are fair and equitable.  Whether you like it or not, employees will discuss pay with one another.  Ensure fair and equitable pay levels between employees in the same jobs, in the same departments, and jobs of comparable worth within your organization. Formal salary ranges within the organization where people with similar responsibilities and authority are grouped into the same salary range help to maintain internal equity.   Set clear goals for what you want to achieve by setting salaries at certain levels.  For example, you may pay an entry level manager less than market if you are hiring a person with less experience and providing a training and growth opportunity in exchange.  Open and clear communication regarding the company’s salary structure and pay philosophy can aid in employees’ understanding of the methods used in determining their salary level and assist in demonstrating fairness and equity.

Merit pay is one of the most frequently used methods to drive employee performance.  To be effective it needs to be linked to performance in a manner that is consistent with the mission of the organization.  Merit increases can become de-motivating when your performance measurement system is flawed and/or inconsistently applied or when the merit increase amount that is linked to performance is inconsistently administered.  Also with merit increases typically averaging two to three percent, studies show that increases lower than six percent are unlikely to have an impact on employee performance.  What can help is applying behavioral principles to your pay for performance programs such as giving employees a personal stake in the success of the company by showing a clear link between their efforts and results.  Many companies base their compensation plan on time and not results. Of course, time is a factor and needs to be part of the equation. However, if you pay for results, you will get results.

A well-planned salary and total rewards package will motivate your employees, help your company maintain a competitive advantage and help retain key employees.  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 .

 

Posted in Uncategorized on June 28th, 2017 · Comments Off on WHEN DOES SALARY MOTIVATE EMPLOYEES?