WageWatch Ibrief Blog

Login

Posts Tagged “compensation consultants”

INCENTIVE PLAN ESSENTIALS

Well-designed and well-implemented incentive plans can be an important tool for overall company success, but they also have the potential to be ineffective and even damaging if not carefully thought out.  Poorly designed incentives can have too much discretion, too much complexity or just too many measures that can undermine their power and advantage, and they can become just another way to distribute pay.

Before you even consider incentives, make sure you know the company’s strategy and the critical measurements of success.  You will need to know the specifics regarding what you want to achieve, what kinds of improvements, behaviors and outcomes do you want; why aren’t these improvements happening now and what’s preventing them from taking place; what obstacles to the outcomes will employees face, how will employees respond to and try to overcome these obstacles, and is this what you want; Do employees have the skills, experience, systems and support they need to overcome these obstacles and if not, what is lacking?

The potential incentive must be big enough to get the employees’ attention.  Incentives can create a focus on results, but you have to first get the employee’s attention.  Because the opportunity for financial rewards motivates some more than others, your incentive plan will have a greater chance of success if you carefully define what the size of the opportunity must be in order to get the majority of your employees’ focus.

The performance or results required to earn the incentive must be within the employees’ control or significant influence and should be perceived as achievable with some extra effort or stretch.  It should be easy to see and understand the relationship between one’s effort, the results of that effort and the reward.   The incented performance needs to be perceived as a desirable, stretch goal to get and keep the employee’s attention. The payout must be worth the effort required to “stretch.”  The actual payout after the final measurement is made needs to justify the attempt that was made to achieve the full objective.

Develop robust tools for performance reporting so that the employee participants always know where they stand in relation to their goals and payouts.  The payout should be forecast as the performance period proceeds in order to keep the employees’ focus on the desired outcome.   Too much subjectivity in the measurements will turn a Plan into a surprise bonus.   The sources of the measurements should be available to every participant on a regular basis and calculations for determining payouts must be simple and easy to understand.

Incentive plans will also be more valued and accepted by employees when they are a compliment to an already competitive base salary plan.  Incentive plans are not meant to remedy non-competitive pay issues.  Finally, critical factors for a plans success lie in keeping it simple and ensuring good plan communications.

Incentive plans, or any other reward vehicles, cannot drive the performance-improvement bus alone. Unless you identify and remove the barriers to performance, and create the setting in which performance improvement is possible and even likely, throwing incentive money at the problem will likely have little positive impact and could produce some very real negative consequences.

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.

HOW ABOUT A SIX HOUR WORKDAY?

Can a move to a six hour workday increase productivity and the happiness quotient of employees and their families and at the same time increase productivity and company profits?   In the U.S., more than 60 years after workers, through their unions, began organizing for an eight-hour day in the 1860s, President Franklin D. Roosevelt signed the Fair Labor Standards Act in 1938 for all workers to see limits on working hours — initially 44 hours a week, then phased to 42 and eventually 40 by 1940.

Today some businesses in Sweden are trying out a six hour workday hoping to get more done in a shorter amount of time and ensure people have the energy to enjoy their private lives.   This change is purely experimental and a voluntary one that has not been mandated by law nor implemented nationwide.

A Toyota vehicle service center in Sweden’s second largest city Gothenburg, moved to shorter days thirteen years ago. The service center reported a happier staff, a lower turnover rate, and an increase in profits during that time.  The new system keeps the garages open longer and generates new business.  Employees are doing the same amount in the six hour workday, often more than they did in the eight hour day.  The service center reports that employees have more stamina to do this heavy work, and they have seen greater profits and customers because cars are getting fixed faster.

The most high-profile case in recent months is the publicly funded Svartedalens nursing home in west Sweden which started a trial of a six-hour day in February 2015 to continue until the end of 2016 when they will determine whether the cost of hiring new staff members to cover the hours lost is worth the improvements to patient care and boosting of employees’ morale.   The nursing home has 80 nurses working six hour shifts maintaining their eight-hour salaries while 80 staffers at another nursing home work their standard hours.  At half way through 2016, the nursing home trying the six hour workday has half the average sick leave, the nurses are happier and the care is better.   The study however, equates productivity with quality of care, which doesn’t necessarily translate to white-collar work.

Gothenburg’s Sahlgrenska University Hospital’s orthopedics unit switched 89 nurses and doctors to a six hour day last year, hiring 15 staffers to ensure the hospital work got done. The test was expensive, costing the hospital $123,000 a month, but no one has called in sick since it began and the nurses and doctors have been found to be more efficient.

A number of startup companies have announced that they are also testing the concept. These include Background AB, a creative communication agency in Falun, Dalarna and Filimundus, an app developer based in Stockholm.   Linus Feldt, Filimundus CEO believes that staying focused on a specific work task for eight hours is a huge challenge.  During an eight or more hour workday, employees take frequent breaks and look for distractions and diversions such as social media to make the work day more endurable.  With the six hour work day, staff members at Filimundus are not allowed on social media, meetings are kept to a minimum, and the company does it’s best to eliminate other unproductive distractions.

Most of the companies who have made the shift to the six hour workday have reported a positive impact, from increased efficiency to better communication and fewer staff sick days.  A 2014 Stanford University research paper found a “non-linear” relationship between hours worked and productivity as well as too much work can actually impinge productivity.  According to a study by the Families and Work Institute, overworked employees make more mistakes.  Research has shown that condensing work into more efficient hours is very unlikely to hurt productivity.  There is no need to lower pay and in fact companies are likely to save money through less sick and personal leave, less stress leading to better health, and lower turnover costs.

Opponents to the 6 hour workday feel that if Sweden were to adopt this standard, the economy would suffer from reduced competitiveness and strained finances.  The six-hour day has not being embraced by larger Swedish companies and other towns in Sweden that previously tested shorter workdays ultimately abandoned them.  In the northern city of Kiruna, officials scrapped a six-hour day for 250 municipal employees after 16 years, citing high expenses and resentment among workers who were not part of the program.

The 6 hour work day would be less accepted in the U.S. because the eight+ hour workday ethic is so deeply embedded in our culture.  According to Gallup’s 2014 poll, full-time employees in the U.S. work an average of 47 hours per week.  It will be interesting to watch how the six hour workday plays out in Sweden.  However, even with encouraging results, it’s unlikely that the U.S. will shift to shorter days any time soon.  The rest of the world (outside of Europe) a 40 hour work week would be very nice improvement as well.

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 November 9th, 2016 · Comments Off on HOW ABOUT A SIX HOUR WORKDAY?

Mindfulness: Embraced by Businesses

In a world where multitasking and information overload are the norm, 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 (http://www.psychologytoday.com/basics/mindfulness) on their website.

 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 on 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 also 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 awake, 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 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 .

Posted in Uncategorized on February 5th, 2014 · Comments Off on Mindfulness: Embraced by Businesses