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(Showing all posts labeled Compensation)
Three Common Payroll Problems And How To Handle Them
In 2013, the Internal Revenue Service administered 6.8 million penalties for payroll reporting errors, costing businesses $4.5 billion, according to IRS data. About 45 percent of businesses incur an average of $845 per year in payroll penalties, according to statistics cited by the SBA. In addition to IRS penalties, payroll problems can hurt your cash flow, create friction with your employees and threaten the livelihood of your business. Here are some tips on how to avoid some of the most common payroll mistakes.
Misclassifying Employees as Contractors
One of the most common payroll mistakes is misclassifying employees as independent contractors or vice versa, according to Accounting Today. How you classify employees affects whether you use a W-2 or 1099 to report their compensation, whether they are subject to federal income tax and employment tax withholding, and whether they are entitled to benefits.
Avoid this problem by correctly classifying employees and contractors when you hire them. If you discover you have improperly classified employees, you should check into the IRS' Voluntary Classification Settlement Program. The VCSP lets eligible employers reclassify workers as employees for future taxes, while providing partial relief from federal employment taxes by letting you pay 10 percent of the liability that would have been due during the past tax year under reduced rates.
With respect to contractors, you should obtain a W-9 before paying them to avoid a potential mandatory backup withholding at a 28 percent rate. You must also generally issue a 1099 to contractors to avoid penalties, with some exceptions as in the case of contracting corporate entities. For both employees and contractors, avoid paperwork problems by using the Social Security Administration's website to verify Social Security Numbers.
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Money is the Worst Incentive
The most typical motivation plan is to reward top performers and ignore everyone else. It is common knowledge that if you want something done at work, offer a bonus!
Dan H. Pink, a leader in motivation, work and management, explains that the way we think about cash bonuses is backwards from what we would expect. Interestingly, studies show bonuses actually de-motivate workers instead of encouraging them. In a clever RSA video Pink explains how rewarding top performers causes worse performance and that when employees are paid enough money, it is possible to incentivize them using other, far more successful, techniques that result in increased engagement and loyalty.
In his video, Pink lists three things that actually do lead to better performance:
Mastery: We all want to get better at something. This is why some of us use our free time to learn how to play the guitar or study photography; we aspire to learn a new skill or craft for the pleasure and satisfaction.
Purpose: we all want to feel like we are making a contribution. If money and profits matter without a sense of purpose bad things happen. Service becomes lame, products are bad and work becomes uninspiring.
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Don't Let Money Prevent You From Hiring The Best
9 Strategies for Hiring the Talent you Can't Afford
You want to hire the best you possible can to keep that momentum going but how you define ‘the best’ could be costing you more in the long run. On paper you may decide that you can only afford to pay a new hire x amount of dollars and you may also be aware that talent costs more than you can afford to pay. Do you lower your expectations? Absolutely not. Our research has shown consistently for over 20 years that pay is not what motivates people. In fact compensation is at the bottom of the hierarchy of needs for employees. This is important to know when you are looking to hire ‘the best’ so you don’t let the number interfere with who you want to hire, first of all. Second, you need some strategies to help attract top talent, the people who want more than just a dollar figure when it comes to finding the right job.
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What Could be Wrong with Unlimited Vacation Time?
The Pros and Cons of PTO
According to an article in Employee Benefit News by Dane Hurtubise, less than 1% of US corporations currently offer unlimited vacation days. It is gaining popularity as companies like Netflix, Best Buy, Evernote and Motley Fool adopt the program, however. In terms of employee engagement, unlimited vacation days has considerable merit because it implies a strong relationship between employee and employer, based on trust, which is one of the foundations for achieving engagement. But just like as adopting an open office plan, ‘each company should carefully evaluate and research if it is right for them’.
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The Rewards of Performance-Based Compensation
The Motivating Impact of Reward and Recognition
Our work with employee surveys has clearly shown that employee satisfaction with the level of reward and recognition at their organization often makes a critical contribution to their overall job satisfaction.
However, few organizations in the U.S. seem to realize this, as employee satisfaction with reward and recognition is not very high – in fact, based on our most recent norms study, the proportion of those who are satisfied (36%) is not much higher than those who are dissatisfied (33%)! Although reward and recognition encompasses more than compensation alone, there seems to be a general lack of knowledge within many organizations about this important issue and its critical role in attracting and retaining a talented workforce.
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Are Underpaid Employees a Cybersecurity Risk?
Interesting article from Bloomberg Businessweek.
What's your take on this? Is your business at risk from disgruntled employees? Read the full article on BloombergRead full post
73% Of Employees Want A Holiday Bonus
Not really any surprise here, but it appears that getting a cash bonus is the top choice for what employees want from their employers as a holiday perk.
AboutInsightlink Communications are experts in employee survey design, data collection and analysis. Since 2001 we've helped companies of all sizes measure and improve their employee satisfaction and engagement.
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HR ToolKit Guide to Employee Surveys
Good info on how to write surveys
Makes 360 assessment surveys easy.