Why Raising the Minimum Wage Is a Really Disagreeable Idea.
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| Why Raising the Minimum Wage is a Really Disagreeable Idea. |
Several politicians, including the governor-elect the mayor of my home state's largest city, are pushing hard o have already made plans to raise the minimum wage for workers. While I believe that their intentions are sincere and that they believe that raising the minimum wage will help and support employees who are struggling to make ends meet, the desired results for small businesses will not be met. Raising the minimum wage is not the best move to make. In other words, raising the minimum wage is the wrong way to do the right thing by encouraging and rewarding good performance and practices.
There are many well-performing employees in this country who would benefit from an increase in the minimum wage. There are many employees in the workplace who are good performers and achievers. They all work fine. They follow the rules. They deliver. They should be rewarded for their good habits and performance.
On the other hand, there are many employees in the workplace who are poor performers and achievers. they don't all work right. They don't follow the rules. They don't always deliver and when they do, the results can be less than desirable. They should not be rewarded with pay increments for sub-per performance and habits. For this group of employees, a minimum wage increase would be a reward without the promise or expectation of better performance.
Additionally, if the minimum wage for a small business owner were required to increase from $8.25 an hour to $10 an hour, the new minimum wage would cover the payroll and required contributions and matching funds of eligible employees. There will be a 21% increase. In other words, the business owner would be required to increase certain payroll costs without any commitment or assurance that all those who would benefit from the increase would improve performance or follow the rules. The facts are that some people will and some will not. Most likely, the number of employees who will improve performance and the number of employees who will not improve performance will remain the same.
There is more bad news. Employees whose hourly rate was above the previous minimum but slightly above the new minimum wage are likely to want a pay raise. They may have justification. If a team leader currently earns $9.75 per hour, which is $1.25 more than the current minimum, that person may request a pay increase to $11.25 per hour or more because the position and position merit the $1.25 minimum rate. is.
This begs the question: Why raise the minimum wage without any incentive or assurance that overall performance will improve?
The answer is obvious. There are no guarantees. This is why raising the minimum wage is a bad idea and the wrong thing to do for small businesses.
But don't despair. Some are the opposite.
If you're a small business owner or operator, there are ways your company can reward good performance and good performers, and encourage and train poor performers to do better without incurring huge costs.
Designing and implementing an Internal Quality Performace Rewards Program (IQPR ) that evaluates individual performance monthly by category is one type of program that I have found to be very successful and productive.
A proven way to start is to establish no more than four categories of internal company performance that affect the company's productivity, efficiency, and revenue. Individual, team, and company-wide results will be measured and recorded daily. Results should be regularly reviewed monthly or more frequently if necessary and appropriate.
Following are some specific categories of performance measurement.
Attendance and punctuality are important productivity factors for small businesses. Whatever the reason, when a person is not at work, that person. Sometimes staying home is the right move, but many times it isn't. Reviewing employee attendance records each month can reveal a lot.
Punctuality is equally important. If the employee handbook states that the employee must be at his station and ready to work at a certain time, that is a company standard. Punching the clock is not always the same as being on time at work.
Accidents and injuries remain a major concern for small businesses. A recent article in the Chicago Tribune noted that fewer people are getting hurt at work. This is good news. On the other hand, virtually every safety engineer will claim that every accident or injury could have been avoided.
Cleanliness and workstation organization can be one of the most difficult challenges of managing a small business, but station cleanliness and organization remain essential contributors to internal quality performance. Instead of sweeping the floor and leaving tools on the workbench at the end of a shift, it only takes a few minutes to put them away.
On-time project completion and delivery is arguably the biggest quality performance metric. Late completion of an order or project means late delivery to the customer. As a result, the customer may not be happy, invoices are delayed so the accounts receivable age for the project or order is extended, and another order from the customer may not come soon.
On the other hand, timely fulfillment and delivery mean the customer is happy, invoices can be sent on time, and happy customers usually order again and again.
Consequently, a reward for good attendance and timely completion and delivery along with punctuality can override any reward a business owner may provide as part of the IQPR program.
Rewards can be financial benefits such as modest salary increases, monthly insurance premiums can refunds, gift cards, or other financial rewards.
However, rewards for good monthly, quarterly, and annual performance are not limited to financial rewards whether part of the payroll or not. Rewards of prestige and recognition work well in many cases. These include rewards such as special parking, uniform designation, certifications of appreciation, or other special praise and recognition that often motivate colleagues to improve their performance.
When an internal quality performance rewards program is in place and becomes the norm, the program provides the right way to do the right for both the company and the employees.