A good reward strategy combines a mix of different types of rewards designed to attract, retain and motivate individuals with the skills and dedication necessary to make your company successful. While many rewards may be financial, there are a number of non-financial rewards you can provide. The key is to understand what motivates your employees and design a program around those motivators.
- One effective tool in developing a pay structure is using pay grades, which provide salary ranges for specific job classifications. Employers can choose to offer a salary within the range at a higher or lower level based on skills and experience.
- Compensation analysis software based on position, industry and geographic area can help you benchmark salaries. This process helps companies compare their own compensation plan against those of others.
- Levels of pay typically differ depending on geographic region. Salaries tend to be somewhat impacted by the cost of living in a particular area.
- Compensation may also be affected by the number of skilled individuals available for your position and the current economic climate.
- If your employees are subject to union contracts, compensation is generally covered in these agreements.
Legal Requirements Relating to Wages and Employment Conditions
The Fair Labor Standards Act (FLSA), which prescribes standards for the basic minimum wage and overtime pay, affects most private and public employment. Unless specifically exempted, employees covered by the Act must receive overtime pay for hours worked in excess of 40 in a workweek at a rate not less than time and one-half their regular rates of pay.
There is no limit in the Act as to the number of hours employees aged 16 and older may work in any workweek. The Act does not require overtime pay for work on Saturdays, Sundays, holidays, or regular days of rest, as such. The Act applies on a workweek basis. An employee's workweek is a fixed and regularly recurring period of 168 hours -- seven consecutive 24-hour periods. It need not coincide with the calendar week, but may begin on any day and at any hour of the day. Different workweeks may be established for different employees or groups of employees.
Be sure to also check your state employment laws in the State Employment Laws section on minimum wage and overtime. It is also important to determine whether your employees conform to one of the FLSA exemptions.