The 5 Key Features of a Good Incentive Plan

20/01/2018

By Neo Shi Qin, DecodeHR

Incentive plans are becoming an increasingly popular tool to drive employee performance. A well-designed plan can help to accelerate business growth as well as achieve talent attraction and retention. Today we explore 5 key features of a good incentive plan.

1. Clear and Specific

 A good incentive plan should be clear, specific and easy to understand. Employees need to first have an unobstructed view of the plan and its objectives to reinforce behaviours which will lead to desired business outcomes. Such a plan also makes it easy to be administered with minimal errors, and this also helps to develop system credibility.

2. Agile

In today’s economic climate where competition is the norm, businesses must continually evolve to stay relevant and innovative. Likewise, a good incentive plan must also be agile enough to adapt quickly to changes while remain effective as a driver of performance.

In Singapore’s context, the Smart Nation initiative has huge bearings on how performance should be measured and quantified. The use of technology has allowed for the automation of many functions in the workplace and businesses need to rethink their KPIs. For example, administrative assistants may no longer be required to process and track department claims, and instead be expected to now take on a more analytical role in producing meaningful dashboard reports.

3. Attractive and Attainable

A good incentive plan must be attractive enough to motivate performance but also be attainable with stretched efforts so that employees will not be discouraged. As a rule of thumb, the average achievement level should be set as the target and 20% above that could be a stretch goal with upside earnings. The company can also decide if it wants to take an all-or-nothing approach or consider multiple levels of incentives for various levels of performance.

4. Measurable Results

The key objective of any incentive plan is to drive performance to achieve desired results. For the plan to be successful, results must be measurable with clear indicators and this begins with an effective goal setting framework. SMART goals which are Specific, Measurable, Attainable, Relevant and Time-based are useful in helping businesses set goals and measure results.

5. Consider Non-Monetary Incentives

Incentives do not necessarily have to be monetary. To build a successful incentive plan, businesses must identify the form of compensation that will be the most effective. In the absence of generous budgets, businesses can offer non-monetary incentives such as paid time-off or awards and recognitions as performance drivers. Incentive plans do not have to be expensive unlike what most people think!

Related Reading: How to Design a Successful Performance Bonus Plan

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This article is a guest contribution by Neo Shi Qin of DecodeHR. The views expressed here are of the author’s, and Zegal may not necessarily subscribe to them. You, too, are invited to share your point of view. Learn more about guest blogging for Zegal here.

About DecodeHR

DecodeHR provides strategic advice and high-impact solutions to clients primarily in Asia, specializing in the areas of Strategic HR Reviews, Competency Frameworks Development, Strategic Workforce Planning, Pre and Post Merger & Acquisition integration and Transformation projects.

Our strength is our deep knowledge of Singapore and Asia, and this is coupled with experience in the international arena. We distill the best global practices to bring to you practical solutions for maximum impact.

Paid Leave Benefits For Caregivers, Yes Or No?

19/01/2018

In our workplace today, money and salary no longer reigns. Instead, employers are delving into more innovative benefits and perks to boost productivity levels amongst other reasons. And most of us are no doubt familiar that tech giants the likes of Google and LinkedIn tend to be the forerunners when it comes to truly “innovative” employee perks.

Naturally, it would come as no surprise that yet another tech giant has now come under the public’s eye. Microsoft has recently extended its paid leave benefits to employees who need to take care of a sick family member. This tech giant is now offering four weeks of paid leave with an additional eight weeks of unpaid leave to its employees who are family caregivers as well. Previously, the company offered 12 weeks of unpaid leave to such employees.

While focusing on employees needs by providing exceptional perks is a common trend amongst employers these days, employees who serve as caregivers at home are not getting sufficient attention. This could in turn take a toll on their productivity levels when it comes to work. Being a caregiver could force an employee to cut back on their work hours, take long leave of absence or in a worst case scenario, even quit.

Related readingGoing Beyond Basic Compliance with Family-Friendly Leave Policies

Several other companies such as Netflix offer unlimited paid time off or discretionary time off whereby employees can use them for family care. Likewise, a common benefit offered by most companies include paid family care leave or extending such leave beyond immediate family members to include grandparents or in-laws. Similarly in Singapore, certain government bodies such as the Singapore Workforce Development Agency (WDA) provide their employees with eldercare leave whereby employees are allowed to take leave to look after their parents or parents-in-law when they fall sick or to accompany them for medical appointments.

Given that rapid aging is a currently a pressing issue in Singapore, there is certainly a strong argument to suggest the need for such leave benefits for these caregiver employees.

However, at the same time, employers are mindful that mandating more benefits for these caregiver employees can have a detrimental impact on business operations. While it would no doubt help employees ease the burden of caring for their family members, it could in turn create several disruptions to daily work processes.

Ultimately, it all boils down to the individual company culture. Some companies are already providing some form of flexible work arrangements, whereby employees make use of such arrangements to take care of their sick relative. Likewise, providing discretionary time-off could also allow employees to attend to their personal matters, which includes looking after their elderly parents or sick relatives. As such, implementing a specific caregiver leave benefit might not be necessary in this case. Nonetheless, managers and HR have to work closely together to create an effective work plan to manage absences that might be brought on by any unexpected caregivers situations.

Start managing your legal needs with Zegal today

This a guest post by RenQun Huang of Gpayroll. The views expressed here are of the author’s, and Zegal may not necessarily subscribe to them. You, too, are invited to share your point of view. Learn more about guest blogging for Zegal here.

About Gpayroll

Gpayroll is an easy to use, self-run online payroll service that will redefine and revolutionize the payroll industry. Its intuitive and automated system will help business owners focus on their core business without the hassle of managing payroll.

What types of leave are my employees entitled to in New Zealand?

15/01/2018

Many employers are cautious about ensuring workplace benefits and employee entitlements are not misused or abused by their employees. According to the Wellness in the Workplace Survey in 2017 conducted by the Southern Cross Health Society and BusinessNZ, an absent employee typically costs their employer NZD 600 to NZD 1,000 a year.

While the cost of an absent employee is a valid concern for employers, there is a good case for providing your employees adequate time to rest and recharge as studies have shown that wellness has a significant impact on productivity.

An employer that fails to give its employees its minimum leave entitlements may also face harsh penalties. For companies who flout the rules, the penalty is the greater of NZD 100,000 or three times the amount of the financial gain made by the company.

Source: Employment New Zealand

All employees are entitled to the following categories of holidays or leaves:

  • 4 weeks of annual leave for rest and recreation;
  • 11 public holidays per year;
  • Access to sick leave and bereavement leave upon fulfilling certain conditions.

Annual leave

According to the New Zealand Holidays Act 2003, all types of employees in New Zealand are entitled to annual holidays after they have worked for their employer for at least 12 months continuously. For your permanent, full-time employees, the annual holiday entitlement is 4 weeks of paid annual holidays.

For permanent but part-time employees with a constant work pattern, just calculate the quantity of annual holidays they are entitled to accordingly. For example, an employee who works 2 days per week is entitled to 8 days of annual holidays after 12 months of continuous employment. As for permanent employees with a work pattern that is unpredictable, a ‘week’ could be determined using an average number of days or hours per week over a suitable number of weeks prior to the leave being taken.

Where an employee is employed on a fixed-term agreement of less than 12 months, the employee can be paid annual holiday pay with their salary (i.e. on a paid-as-you-earn basis). This also applies to casual employees whose employment patterns are so intermittent or irregular that it is not practicable to provide 4 weeks paid annual holidays. Employees who are paid on a paid-as-you-earn basis do not get specific time off for their annual holidays.

If your employee has taken more than a week of unpaid leave during a 12-month period, as an employer you can extend the time required before your employee becomes entitled to annual holidays by the amount of unpaid leave taken in excess of one week.

Payment for annual holidays is at the rate of the greater of:

  • The ordinary weekly pay at the time the holiday is taken or
  • The employee’s average weekly earnings over the 12-month period before the annual holiday is taken.

Public holidays

Employees are entitled to a paid day off on a public holiday if it is a day they would have normally worked on.

If your employee works on a public holiday which falls on a day they would have otherwise worked on, they are entitled to an alternative holiday day, also known as a lieu day or day off en lieu. If the alternative holiday is not taken within 12 months, both you and your employee can agree for the alternative holiday to be paid out.

Sick leave

An employee is entitled to 5 paid days of sick leave per year to allow them to care for themselves or their dependents, as long as they have met the following criteria:

  • they have 6 months current continuous employment with the same employer; or
  • they have worked for the employer for 6 months for:
    • an average of 10 hours per week, and
    • at least 1 hour in every week or 40 hours in every month.

Any unused sick leave at the end of a 12-month period can be carried over and added to the next year’s entitlement.

Bereavement leave

An employee may take bereavement leave if someone close to them dies, as long as they have met the following criteria:

  • they have 6 months current continuous employment with the same employer; or
  • they have worked for the employer for 6 months for:
    • an average of 10 hours per week, and
    • at least 1 hour in every week or 40 hours in every month.

Payment for bereavement leave should be made if the employee would have otherwise worked on the day and calculated based on the employee’s relevant daily pay.

Parental leave

Employees may be able to take parental leave to care for their new child if they meet either the 6- or 12-month criteria.

To determine whether your employee qualifies for parental leave, check out the Parental Leave and Payment Eligibility table by Employment New Zealand.

Other types of leave

Other than the types of leave mentioned above, an employee may wish to take various other kinds of leave, such as:

  • Stress leave
  • Garden leave
  • Defence force volunteers
  • Leave without pay
  • Election voting leave
  • Employment during and after disasters
  • Long service leave

Learn more about the other kinds of leave.

Can I vary the arrangement with my employee in the Employment Contract?

While the Holidays Act sets out the minimum holiday and leave that an employee is entitled to, employers and employees do have the option to vary these arrangements in the Employment Contract that they sign, as long as it is allowed for under the Act.

Some variations that may be made by agreement include the following:

  • Transferring a public holiday by agreement: An employer and employee may agree that a public holiday will be observed on another day for the employee. This could be provided for in the Employment Contract or a separate agreement in writing.
  • Provisions for holiday and leave entitlements that are better than the minimum rights in the Holidays Act: If your company prides itself on its flexible workplace culture and emphasis on employee welfare, providing better terms than the minimum entitlements is a great way to demonstrate this.

However, take note that there are some employment terms that may not be varied by an Employment Contract or other kinds of agreements. The Holidays Act contains the minimum entitlement for each type of holiday and leave. Each entitlement is a separate category and cannot be “traded off” on a package basis. For instance, an employer and employee cannot agree that the employee will give up his right to extra pay on a public holiday in exchange for an extra week of annual holidays.

For more comprehensive information to leave and holidays, check out the leave and holidays guide by Employment New Zealand.

Looking for a fuss-free way to draft your Employment Contracts that reflect the most updated law in the new countries you expand into?

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Do you have any tips for hiring in the New Zealand market?

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Did You Know That Part-Timers Are Entitled To Public Holidays?

09/01/2018

We are all certainly no stranger to the term “gig economy” and Singapore has certainly seen a rise in the number of freelance and part-time workers in recent years. There is a growing labour force in Singapore who are deliberately choosing part-time work over being fully-employed.

In the past, the part-timers demographics typically include undergraduates or new mothers. Today, this burgeoning pool of part-timers include fresh university graduates and even full-time employees. Some cite flexibility as the reason for engaging in a part-time job as it allows them to pursue their own personal interests. Others might be looking to make some passive income, perhaps through jobs the likes of an Uber or Grab driver.

Regardless of whether you are a part time employee or looking to engage part-timers for your organisations, did you know that part-timers are covered under the Employment Act (EA) in Singapore and are entitled to gazetted public holidays as well?

While some employers might engage part-timers to cover full-time employees during public holidays, in actual fact, employers have to compensate part-time workers double of their hourly rate for working on a public holiday. Moreover, part-timers are also entitled to paid public holidays similar to the entitlement of a full-time employee.

The number of public holiday entitlement for a part-time employee can easily be found on the Ministry of Manpower (MOM) website. Essentially, it takes into the account of the proportion of working hours per year of the part-time employee as opposed to a full-time employee, multiplied by the number of days of public holiday entitlement received by a similar full-time employee as well as the number of working hours in a day of a similar full-time employee.

Similarly, do note that part-time workers are allowed to encash their public holiday entitlement and add it into the hourly gross rate of pay. Of course, such an arrangement has to be mutually agreed between both employee and employer and should be state clearly in the contract of service as well.

The formula for encashing public holidays is essentially the proportion of annual entitlement to public holidays (in hours) of the part-time employee to the weekly hours of the part-time employee over 52 weeks multiplied by the hourly gross rate of pay.

Besides public holiday entitlement, part-time workers are entitled to a wide array of mandatory benefits under the EA as well. Thinking of switching to a part-time job? Then it is best to do some research and be aware of the benefits available such as public holiday entitlement!

Start managing your legal needs with Zegal today

This a guest post by RenQun Huang of Gpayroll. The views expressed here are of the author’s, and Zegal may not necessarily subscribe to them. You, too, are invited to share your point of view. Learn more about guest blogging for Zegal here.

About Gpayroll

Gpayroll is an easy to use, self-run online payroll service that will redefine and revolutionize the payroll industry. Its intuitive and automated system will help business owners focus on their core business without the hassle of managing payroll.

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