Formaking below $15 an hour, it's wise to set merit raise potential at twice each year, not just annually, said Sharon Koss, a compensation consultant in Seattle. Why? Hourly workers need a goal to shoot for and a reason to work hard. Waiting a year for a raise is too long.
"These are people who will leave you for a 25- or 50-cent raise," said Koss.
Even if the twice-annual raise is the same amount that would be given annually—just broken up into two segments—it will help reduce turnover. Koss also noted that it's important to show hourly employees a possible career path in your organization to encourage them to see through these "grunt work" years.
Note: If you use salary surveys to set compensation levels, Koss said her favorite surveys for smaller organizations (less than 1,000 workers) are by Mercer (www.mercerhr.com) and Compdata (www.compdatasurveys.com). Both cost less than $600.