Piece Rate
bolivier
1 Post
Does anyone have experience transitioning from a piece work pay rate to an hourly rate? How did you dtermine what hourly rate to pay? How did the employees react? Thanks
Comments
It has been 4 or 5 years since I did this but here is what we did (off the top of my head - I am trying to remember everything that went into the process):
* Looked at the market rate for the postion the person was in - we networked with other companies in similar industries that had the same type of postion we did to see what they were paying for the position
* We looked at what the person was making if you divided their weekly pay by 40 hours. We looked at 8 weeks to get the average pay per week and then divided that by 40 hours.
* Then we looked at the number of years a person had been in the position. Someone that had been there for 5 years would be making more than someone in the position for 6 months.
* We came up with the hourly starting wage (this is what we would hire a brand new employee in at) and then had increase increments for years of service. We had to make a couple of exceptions for those that were continuously working the hardest and making more money then others. But we documented why these individuals were being paid higher than others because we didn't want issues down the road. We just wanted to make sure that we were not taking away money from those that worked the hardest for us.
The reaction was about 50/50 split. 50% were happy about it because they felt like they didn't have to work as hard as before to make the pay and the other 50% were mad because they liked the ability to make more money for working harder. We made sure that everyone understood that just because they were going to a hourly rate didn't mean they could get away with not working and meeting their numbers. We had hourly and daily goals they had to meet. If they didn't meet them then they were subject to the progressive disciplinary policy.