Thursday, May 28, 2020
Tuesday, 14 March 2017 11:37

Measuring Efficiency When Changing from Salary to Hourly

Written by Jessica Totman

measuring efficiency

Employees’ attitudes and work habits can be affected when their status and compensation structures change. It is helpful to know that there are new technologies that can help alleviate some of these difficulties.

Changes to the overtime regulations regarding raising the salary threshold from $23,660 to $47,476 have been a source of concern over the past year. Business owners have had to make the choice of bumping their employees up to meet that salary threshold or moving them into a nonexempt hourly status.

Most employers have taken the approach of transitioning employees to an hourly status for one of two reasons. One reason is it’s the safest route. There are no duties, tests, or regulations that say who can and cannot be an hourly employee. The other reason is that the salary threshold is projected to continue to rise every 3 years and a company may not foresee being able to keep up with the rise in salaries.

Moving employees to a non-exempt status is safe but costly. Overtime can put financial strain on companies if it is not managed effectively.

Whether the employer has a staff that is local, remote, or both, the goal is the same: to have engaged employees who give 100 percent and complete their work within a 40 hours or less work week. An employee transitioning from a salary to hourly position will have to accept more accountability for time management. Employers will need to monitor efficacy to avoid an influx of costly overtime that was previously covered under the umbrella of a salaried status. This is the fine line between monitoring and respecting the employee’s privacy.

How will businesses ensure that their employees are not milking the new perk of overtime pay? There’s an app for that!

There are many services that can help employers monitor employees task efficiency. Other apps can also provide employees with the satisfaction of marking tasks as complete. Technology and human resource teams are working with employers to ensure that employees are working efficiently and payroll costs are staying low.

Hivedesk:

This project management tool is great for those who have remote employees. It allows the creator of each project to establish priorities, track time spent on activities, and take screenshots to ensure that employees are staying on track. Other features include an auto-logout time after inactivity.
Price: Starting at $15/month

Freckle:

This time tracker allows employees to not only enter in the time they are spending on each task, but assign it to a specific project or client. Its most attractive features include: a very user-friendly interface, the ability to connect to third-party apps, the ability to provide both billable and unbillable timesheet reports, and the ability to sync to QuickBooks.
Price: Starting at $49/month

WorkSnaps:

Productivity tracking in real time is possible with Worksnaps, which allows you to see employees’ progress as if you were working in the cube next to them. Time is tracked with proof and stats are reported with visual back up that allows employers to ensure they are paying for time actually worked.
Price: Starting at $20/month

IDoneThis:

Daily activity reports are automatically sent to the administrator with this program. While this focuses on activity tracking, there is not an option for screen monitoring. However, the affordability of this app makes up for this, and it is great for employers that are working within close proximity of their employees. Each day the employee will receive the satisfaction of marking tasks as done as well as the option to state what was not done (with an explanation).
Price: Starting at $9/month

Tsheets:

GPS time tracking is ideal for remote employees that need to be held accountable for work completed offsite. A few of the advertised features include: locating employees in real-time, DOL compliant time tracking, more efficient routing, GPS tagging when the employee clocks in to provide a location stamp, a user-friendly phone app, and job task scheduling in real time.
Pricing: $80/month + $4/per user

With so many opportunities for distraction at the fingertips of every employee, a quick Google search can turn into a rabbit hole of 45 minutes of unrelated, mindless scanning. A salaried employee who is meeting deadlines will not cost the company overtime. However, a non-exempt employee that now has to work an extra hour of work (to make up for that nonproject- related search) has become a cost issue.

Monitoring employee task efficiency with productivity reports, activity graphs, and monitoring software shouldn’t make employees feel as if they are being watched by Big Brother. The change of compensation status may have already impacted negatively employees’ morale. Some may even feel they have been demoted. Increasing the level of accountability may positively affect their emotions because they have the satisfaction of marking off accomplishments. At the same time, employers can ensure labor costs are being maintained.

These tools, when framed in a positive light, will become morale-building tools. Salaried employees who previously had endless tasks and felt as if they were never able to shut down can now have the sense of getting credit for all of the tasks they complete. This helps make the implementation a smoother process and helps managers and employers maintain their payroll budgets.
Jessica Totman

Jessica Totman is an HR Generalist for Paychex, a recognized leader in the payroll, human resource, and benefits outsourcing. She is pursuing her masters in human resources from Rollins College.