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The federal Department of Labor (DOL) released a final rule on May 20, 2020 addressing whether employers may pay bonuses, commissions, and other types of incentive payments to employees paid under the fluctuating workweek (FWW) method of paying overtime.
Novak is the author of New York Times and Wall Street Journal best-selling book, TAKING PEOPLE WITH YOU: the Only Way to Make BIG Things Happen. He offered his thoughts on leadership at the SHRM Annual Conference and Exposition, held recently in Orlando. No Recognition for 47 Years Novak tells the story of a visit […]
What Is Written? Start with the written documents, says Kleinman. What written documents relate to compensation? Who has them? Who wrote what and when? What do they say? For example: Plan documents Structures Policies Pay parameters Hiring/Bonus boundaries (approval levels, etc.) How’s Turnover? What turnover levels is the organization experiencing? Functional turnover is created “intentionally,” […]
Why Do an Audit? For the same reason we do financial audits—to fulfill a fundamental obligation, that is, to discover vulnerability. Remember, says Kleinman, who is principal of California-based Dan Kleinman Consulting, someone is always watching, internal and external, and they are evaluating what is going on. Five Reasons for a Compensation Audit There are […]
An incentive program can be a great way to motivate employees and help the organization achieve their goals. But it doesn’t come without potential pitfalls. For example, tying an incentive to reaching specific sales or profit goals means that the company will have to be candid with employees about those figures—which may be uncomfortable if […]
Incentive Compensation Checklist General Questions Do you have an incentive compensation plan? Yes□ No□ Is it in writing? Yes□ No□ Does your incentive plan support the company’s mission and long-term goals/objectives? Yes□ No□ What levels of the organization will participate in the incentive compensation plan, e.g., top management, salespeople, entire organization? Yes□ […]
Variable pay is a powerful communicator of values and directions and changing business needs. However, with nonexempt employees, it is particularly important that: The amount of the incentive be market competitive and significant enough to reward in a meaningful way. The amount of incentive (aka pay at risk) is not so large that missing the […]
How Can You Use Incentive Pay for Nonexempt Employees? “Pay for performance can apply to all levels of jobs within an organization. Recent studies have shown that organizations are beginning to use more variable compensation (or incentives) as it relates to the proportion of base pay, and they’re marketing that to employees—not only when they’re […]
As we all know, the FLSA requires us to pay overtime pay when it is due, and the base pay rate must include all payments for that time period in question—including incentive pay and bonuses paid during that time. But is that always the case? Actually, the answer is no. It’s true that most incentive […]
Cherry and Green, both of whom are principals at HR consultant Hay Group, offer the table below to show how incentives fit into the total rewards picture. They offered their remarks at a recent webinar hosted by BLR/HR Hero. Compensation type Comment Value of being a member of the organization Benefits/ Perquisites Little flexibility, […]