Fair compensation for an entry-level employee in any industry can be a challenge, but in the hospitality industry, it is a question that impacts the business at many levels. Seattle, Washington, a city that has long been a leader in social change, has an initiative on the ballot this November that would allow for a $15 minimum wage in the suburb of Sea-Tac (Seattle Times Editorial, 2013). Washington State already has the highest minimum wage in the country at $9.19/hr and the minimum wage is scheduled to rise again in 2014 to $9.32/hr (Seattle Times Editorial, 2013). The immediate effect of an increase in minimum wage for the businesses in SeaTac is an increase in prices to the consumer to help cover the change in the cost of business. In the hospitality field, increasing the minimum wage would have the same effect and could result in higher costs to consumers.
Another alternative to simply paying more money is to adopt a pay for performance plan. For entry-level employees, this could mean a compensation plan based on set performance goals for either an individual or a group of employees (Quast, 2011). A desk clerk could receive a bonus for a customer who mentioned her outstanding service in a comment card. A more structured plan might pay employees a percentage of their salary as a yearly bonus if the company achieves certain performance goals over the course of the year. The company would then be able to tie certain employee behaviors that help the company to the bonus that the employee receives.
A third alternative to financial incentives is to develop a strong recognition program. The advantage of recognition is that it is usually very inexpensive and can help a company reduce payroll cost (Sanderson, 2009). An example of recognition could be an employee of the month program with a certificate and personal parking spot. Overall, compensation can be a challenging question but a company that adopts a pay for performance plan or installs a recognition program can still fairly compensate its employees and achieve performance objectives.
Quast, L. (2011). Creating incentive plans that actually incent employees. Retrieved from http://www.forbes.com/sites/lisaquast/2011/09/19/creating-incentive-plans-that-actually-incent-employees/
Sanderson, R. (2009). On Top of Real Recognition: Top 10 Tips for Recognizing Entry-Level Employees. Retrieved from http://www.incentivemag.com/Incentive-Programs/Articles/On-Top-of-Real-Recognition--Top-10-Tips-for-Recognizing-Entry-Level-Employees---2009-04-01/.
Seattle Times Editorial. (2013). Editorial: Watch SeaTac’s $15 minimum wage experiment. Retrieved from http://seattletimes.com/html/editorials/2022222333_minimumwageseatacseattleedit10xml.html