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MINIMUM WAGE UPDATE – JANUARY 2019

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 4, 2018, the Department of Labor published a Notice in the Federal Register to announce that, beginning January 1, 2019, the Executive Order 13658 minimum wage rate is increased to $10.60 per hour.  This Executive Order minimum wage rate generally must be paid to workers performing work on or in connection with covered contracts.  Additionally, beginning January 1, 2019, tipped employees performing work on or in connection with covered contracts generally must be paid a minimum cash wage of $7.40 per hour.

Voters across many states approved ballot measures to raise their state minimum rates over time, with increases occurring through 2020 and beyond.  There are 19 states which have an increase that takes effect on December 31, 2018 or January 1, 2019, including:  1) Alaska, 2) Arizona, 3) Arkansas, 4) California, 5) Colorado, 6) Delaware, 7) Florida, 8) Maine, 9) Massachusetts, 10) Minnesota, 11) Missouri, 12) Montana, 13) New Jersey, 14) New York, 15) Ohio, 16) Rhode Island, 17) South Dakota, 18) Vermont, 19) Washington.

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.  In addition to the statewide minimum wage increase, multiple states have approved minimum wage increases that are higher than the statewide average.  (The increases are referenced in the attached Excel spreadsheet).  There is one state, Oregon, and the District of Columbia that have scheduled their wage increase to begin on July 1, 2019.

Although there are no statewide minimum wage increases, there are several states in which specific cities and/or counties which have wage increases scheduled to occur on 1/1/2019; these states include:  Illinois, Maryland, and New Mexico.

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 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.

SALARY STRUCTURES: WHAT ARE THEY GOOD FOR?

Established salary structures aren’t mandatory.  There is no law that requires them, but they serve many useful purposes.  Having salary ranges in place can ensure that salary decisions, from new hires to promotions, are made with objective and consistent rules and parameters.  They provide at least a first line of defense against salary discrimination, intentional or otherwise, by ensuring that employees performing the same job are granted the same salary opportunity.  And, formal salary ranges provide you with a tool for proactively managing and budgeting your salary dollars.

Salary structures 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 and control overall base salary cost by providing a cap on the range paid.

A salary structure enables employers to pay employees in a given position, consistently, for the work they do.  Salary ranges also offer flexibility enabling a company to pay higher in the range for an employee based on a greater level of education, experience or performance.  In the same way, it can potentially save on labor costs when hiring employees with limited backgrounds.

Having well documented and communicated salary ranges can minimize employees’ pay equity concerns and grievances.

A well-designed salary structure will help organizations:

  • Attract and retain suitable, qualified, and experienced employees
  • Build high morale with internal equity
  • Create more satisfied employees and thus reduce turnover
  • Minimize favoritism and bias
  • Provide a structure for career progression
  • Serve as a sound basis for collective bargaining and employee relations management

If the salary structure gets out of sync with the overall labor market, a company may find itself paying employees too much and needlessly increasing operating costs, or paying employees too little and having difficulty attracting and retaining talent.

A study of the current labor market will provide new information to determine whether the organization’s pay structure, policies and practices, job classifications and job titles are appropriate or needing adjustment.

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.

EFFECTIVE NEW HIRE ORIENTATION

An employee’s experience during their first few days will affect the rest of their tenure. It is critical, to begin with, an effective, positive, and fun new hire orientation for the future success of your new employees.  Even before the employee’s hire date, you can make a positive impact with a call to the employee two or three days before their start date, welcoming them, letting them know what time to arrive, and what they can expect during their first day and first week on the job.  Studies show that a well-planned orientation can contribute to the length of employment, better work attitudes, more effective communication, and fewer mistakes.  Your new hire orientation is your chance to set a positive tone for a long-lasting and mutually beneficial relationship.

A new hire’s early experience is highly influenced by his peers, managers, subordinates, HR team members, and the organization’s top management.  Ensure that new hires are welcomed by their team members.  Plan a welcome breakfast meet and greet for their first morning on the job.  The new hire’s immediate supervisor should schedule daily meetings with the new employee at least for the first week, then at least weekly for the first month or two.  Schedule informational meetings with key people in the department and in other departments to provide the new hire with the general knowledge that they will need to perform their job.  Include an office tour in the orientation process that includes introductions.  Be sure to include introductions to top Executives, Human Resource personnel as well as receptionists, administrative assistants, and copy/mail room attendants.

An effective orientation program will put emphasis on the new employee, their individuality and what they have to offer rather than focusing solely on the company’s culture and how the new employee can fit in.  You are probably hiring in part to get new ideas into the organization.  Make sure to capitalize on that.  Make your orientation meetings fun and be sure to provide a meal or at least snacks.  Keep it interesting and not too long.  Too much information will be boring and will not be retained.  Orientation should reflect culture through interactive activities.  One way to make it memorable is to present the company’s goals, mission, and values in an activity-based form rather than simply providing the information.  Allow the new hires to get to know each other on a personal basis, not just professional – go around the room and have them tell one professional and one personal thing about themselves.  You can also turn this into a game by writing one thing about each person on a piece of paper.  At the end of the game, state items one at a time, out of order, and have people guess who said what.

Promote communication with a team building activity such as learning the employee handbook through a scavenger hunt.  For example, divide the orientation group into teams and see which team can answer the most handbook questions in a set amount of time.  Cover company ethics to let them know what is expected, and also include ‘unwritten rules’.  Don’t end there!  After orientation, schedule follow-up meetings with each new hire to elicit their feedback and answer any follow-up questions they may have.

Don’t forget the basics.  Provide them with all the office supplies they will need to start their job, include contact information they will need.  And let them know how to get additional office supplies.  Teach them how to use the phone, how to forward calls, set up and change voicemail, and how to do a conference call.

Today, many companies are adding programs such as flex-time, telecommuting as well as accommodating and encouraging alternative work styles in an effort to provide a work environment where employees are happier and thriving.  Therefore don’t neglect or underestimate how impactful beginnings are, and provide your new hires with an orientation program that is effective and unique to your company and its culture.

Implementing the above suggestions will help your company to build a culture that encourages retention of employees, which in turn will attract top talent.  In addition to providing a great work environment that respects employees and provides opportunities for learning and growth, it is also important that they receive a solid compensation and benefits package.  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 consulting, salary survey data, benefit survey data and market compensation reports, please call WageWatch at 888-330-9243 or contact us online.

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 against
  • Add the percentage of turnover that was top performers or top salespeople, 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, which can, in turn, lead to more turnover.

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.

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, the focus is on monetary rewards. Motivated employees make a difference in the workplace.  They affect the work 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 inexperience and provide 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 five percent are unlikely to have any 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.

Change can be challenging and demanding.  At WageWatch our consultants can assist with your organization’s compensation needs and help ensure your wages and salaries support 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 at www.wagewatch.com/contactus

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 address: https://www.dol.gov/whd/state/meal.htm  and   https://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, or
  • The break lasts 20 minutes or less, or
  • 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 upon 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 considered 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 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, call 480-237-6130 or contact us online.

SUPREME COURT DECISION–PUBLIC UNIONS CAN NO LONGER ENFORCE PAYMENT AMONG NON-MEMBERS

In the case of Janus v. American Federation of State, County and Municipal Employees (AFSCME), Janus, an Illinois child support specialist, filed a complaint challenging the $45 monthly fee he had to pay to the union that represents him, despite not being a member.  His charge was that his First Amendment right was violated when money is taken from non-consenting employees for a public-sector union.

On June 27, the Supreme Court ruled that public-sector “agency shop” arrangements, which mandate union fees from non-consenting public-sector employees, violate the First Amendment.  The 5-4 decision overturned a 41-year-old decision that allowed states to require public employees to pay some fees to unions that represent them, even if the workers chose not to join.

The Supreme Court decision from 1977, ruled in the Abood v. Detroit Education Association case that unions may impose fees on nonunion government workers for nonpolitical expenses including collective bargaining, administration of union contracts and internal grievance procedures.

Justice Samuel A. Alito Jr. wrote for the 5-4 majority, “We conclude that this arrangement violates the free speech rights of nonmembers by compelling them to subsidize private speech on matters of substantial public concern.”  According to Justice Alito, workers like Mr. Janus were charged about 78 percent of the dues paid by members of the union.

After concluding that the imposition of fair share fees violate the First Amendment, the Court noted that “Abood” failed to appreciate the conceptual difficulty of distinguishing in public-sector cases between union expenditures that are made for collective-bargaining purposes and those that are made to achieve political ends” and that “Abood does not seem to have anticipated the magnitude of the practical administration problems that would result in attempting to classify public-sector union expenditures as either ‘chargeable…or non-chargeable.”

This decision impacts how public-sector unions work and may have implications for private-sector labor issues.  Currently, there are 28 states that have right-to-work laws which forbid unions and employers to enter into agreements requiring employees to join a union and pay dues and fees to it in order to get or keep a job.

The Supreme Court’s ruling could affect about 5 million public sector workers in 22 states that don’t have right-to-work laws that already ban forced union dues.  The impact may further erode the power of public sector unions and/or lead unions to be more responsive and attentive to its current members.

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 888-330-9243 or contact us online.

MINIMUM WAGE UPDATE – JULY 2018

The U.S. Federal minimum wage has not increased since July 2009, as such, many states, cities, or counties have decided to vote into law, their own increase in the minimum wage.  Some states have decided to gradually increase their minimum wage to $15.00/hour over the course of several years.  While the majority of increases occur at the beginning of the year, others wage increases begin mid-year, starting July 1.

An overview of the states, cities, or counties which have minimum wage increases beginning July 1, 2018 include:

  • California – Not statewide; increases in the following cities:
    • Emeryville
    • Los Angeles City
    • Los Angeles County, Unincorporated
    • Malibu
    • Milpitas
    • San Francisco
    • San Leandro
    • Santa Monica
  • Illinois – Not statewide, two local jurisdictions:
    • Chicago
    • Cook County
  • Maryland – Not statewide; one county:
    • Montgomery County
  • Minnesota – Not statewide:
    • City of Minneapolis
  • Oregon – State law change; varies by area: General, Urban, and Nonurban
  • Washington D.C.

For more detailed information click here:  MINIMUM WAGE CHART.  Review the tab for California to review specific city 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.

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 work week.  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 in determining 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 work performed and do not test based on 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 consultants provide businesses, across 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.

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, and non-financial compensation such as job training and development, recognition, and advancement opportunities.  A large percentage of the company budget is compensation, and therefore 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 payments.  A good incentive plan should be easily understood by the employees including 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.