Murphy's Law on Work - #229
All vacations and holidays create problems, except for one's own.
While job satisfaction these days ranks higher on a new employee's totem pole than it used to, compensation and a benefits package are still high on the candidates list of things to know before saying "yes" to a new job. Compensation traditionally relates to the hourly wage or salary for the position, and benefits include health, dental and life insurance, retirement plans, disability, vacation, holidays and paid time off, and other perks that may come with the job. There are some people who are motivated by money alone, but typically it's the big picture that will encourage someone to accept the job.
A. Determining Pay Rates for Positions
Setting a pay scale or range for a particular position is important as it offers a benchmark for future raises and compensation. It should also reflect not just the abilities of the person who will be filling the position, but also be on par or better than the "going rate" locally, regionally, or nationally for the same type of position in a company that has a similar employment structure, or that is in the same industry. Managers and HR departments can create these ranges by looking at trade and professional organizations, chambers of commerce, employment agencies, or by simply networking with peers to have a pulse on what's going on in the employment marketplace. Websites like Monster.com and Yahoo! offer insight into salary ranges in a wide variety of fields. It's important to determine what the job is worth to the company, not what the experience is of the person you'd like to hire. But by creating a range, versus a fixed number, managers or those doing the hiring, are able to negotiate with potential candidates based on the job's role and the candidate's experience. This allows for flexibility for everyone.31 Pay structures are useful for standardizing similar jobs and include several levels, with each level containing a minimum salary/wage and then increments thereafter. Unions use this structure because pay is determined during collective bargaining. Salary surveys can also give insight into inflation statistics, cost of living, and budget averages. Knowing averages for the geographic location of the company is helpful, as well.
Exempt employees are typically professional, management, and other types of skilled jobs, and these employees get a fixed amount of money per pay period (or salary). Many times exempt positions receive a higher compensation and benefits package, but are also known for longer or more required hours of work. Non-exempt jobs are usually unskilled or entry-level positions that receive an hourly wage and earn extra money for overtime hours, typically over 40 hours a week. If there's more than one identical position that is non-exempt, one person can't have a higher pay than another person doing the same job. Hourly wages typically start at the minimum wage rate of the company's particular state, and then go up from there.32
Incentive-based programs may include some of the following:
Commission: Typically, positions in sales and marketing have some sort of commission structure attached to them, where the employee receives a pre-determined base pay, plus a certain percentage of his or her sales efforts.
- Merit Pay: This is a plan implemented on an institution-wide basis to give all employees an equal opportunity for consideration, regardless of funding source; many times a "raise" based on performance and the raise percentage falls into a pre-determined range for the entire company.
- Gainsharing: a technique that compensates workers based on improvements in the company's productivity.
- Profit Sharing: a program to award employees a percentage of the company's profits.
- Stock Options: the "right" to purchase stock at a given price at some time in the future.33
A study by a team of behavioral scientists, led by Frederick Herzberg, showed there are two categories of what people want from their jobs: satisfiers and motivators. Satisfiers, also called maintenance factors, are what employees believe they have to do to complete the minimum amount of work required to complete their job. Once an employee is satisfied, giving them more of the same work won't motivate them, although managers mistake this fact – thinking that if an employee has completed his work, he must want more of the same thing. But this is not a motivator. Motivators are actually the things that really excite people to put out more energy, effort, and efficiency. Recognition, control over one's work, and garnering satisfaction from the actual position are just a few motivators.
Going beyond the traditional monetary recognition for a job well done, great managers must understand each individual employee – remember the "human" part of the job – and determine what really motivates each individual person. Other types of motivators and incentives may include incentives for sales staff, exceeding quotas, stock options, hiring bonuses, special awards for special achievement, and profit sharing, to name a few.
There are no paid holidays for employees in the private sector under federal law, not even the Fourth of July, Thanksgiving or Christmas, although some laws do require paid holidays for state and federal government employees.35 Though not required by law, most companies offer paid holidays to their employees. The standard ones include: New Year's Day, Labor Day, President's Day, Memorial Day, Independence Day, Thanksgiving and Christmas. Others may include Columbus Day, Veteran's Day and Martin Luther King Day. If the holiday falls on a weekend day, many companies observe the Friday or Monday before or after the actual holiday.36
Companies are required by law under the Family and Medical Leave Act to provide up tot 12 weeks of unpaid time off in a 12-month period for certain circumstances. More about this law will be discussed in Lesson 5.
If you've ever heard of someone accidentally going to a doctor that's "out of network," and paying the full boat for the doctor's visit, you know the insurance plan probably is part of one of the many Health Maintenance Organizations (HMOs). In most HMOs, employees are required to see doctors that are in the plan in order to get the best benefits and lowest rates. There are pros and cons to HMOs and not all are alike. Companies should research options wisely before signing on with an HMO, so they are providing the best possible plan to their employees, while not breaking the bank for the company at the same time. Typically employee and employer share these costs in some capacity. Very rarely do you hear of an employer paying for 100 percent of health benefits.
One of the most rapidly growing benefits is dental insurance. Other types of insurance include optical care that covers the cost of eye exams, eyeglasses, and even contact lenses. Most companies offer other benefits, like life insurance, where group coverage policies include accidents and permanent disabilities, like loss of limbs, eyesight, or hearing.38
One of the most popular retirement options companies have offered in recent years is the tax-deferred savings plan named after Section 401(k) of the Internal Revenue code. The 401(k) allows employees to save through payroll deductions. Employees can select stock and mutual funds within a particular investment program and have them deducted from their paycheck, right into their investments, pre-tax. Some employers elect to match up to a certain percentage of what the employee invests. This is up to the discretion of the company. Smaller companies may choose to offer a 401(k) program to employees, but as an employer, don't participate. Either way, it's a favorite benefit that most employees take advantage of.39
- Human Resources: Employee Recognition, Training and Discipline
- Human Resources: Handling Layoffs and Employee Cuts
- The History of Human Resources
- Managing Training Programs and other Professional Development Activities
- The Basics of Workplace Safety, Health and Inspection
- Learning about Employee Substance Abuse
- A Beginner's Guide to Internet Marketing
- Strategies for Confronting Your Fears when Speaking
- How to Perform a Cost Analysis
- Substance Abuse Problems in the Workplace
- Workplace Violence Details and Facts
- Methods of Expanding Your Business Into International Markets
- Financial Analysis Tools: Current Asset and Debt Management
- Business Commerce: Legal and Regulatory Requirements