Pay deduction for plant wide program

HRCathy

Good morning! The owners of my company want to put in a cleanliness program. They will do walk-throughs. The cleanliness guidelines will be posted throughout the plant. If they find a non-conformance, it will be recorded. At the end of the quarter, there will be a formula for the number of non-conformances to number of walk-throughs. This will result in a percentage that each employee will either gain or lose from their evaluation for the year.

So, if I were to get a 4% raise, but the plant cleanliness program was at 96%, I would only receive 96% of my 4%. They are maxing the change to 2% either way. I could get only 2%, or I could get a 6% raise.

Am I running afoul of any laws here? I'm not discriminating, and I'm not obligated to give raises at all, but I want to be sure I am not going to get the company into trouble with this plan.

Thanks for your input! -Cathy

LivindonSouth

Sounds like an excellent concept. We have the 5-S program in place but haven't tied it specifically to compensation.

We do, however, tie employee increases to their participation (or non-participation) in our Cost Reduction Suggestion program. For example, all ranges were just bumped 3%. But in order to get a 3% increase with your review, you must score a certain point level on your review PLUS you must have submitted a minimum or two cost reduction suggestions during the review period.

We have employees who score very well on the review but have not submitted a cost reduction. Their raise is limited to 1%. This is beginning to get their attention. Our cost reduction goal for this fiscal year is $1,060,000.00.

I think the same could work with the cleanliness program.

HRCathy

Thank you. I will mention this program to the owners too.