Original Date: 10/04/1993
Revision Date: 01/18/2007
Best Practice : All Salary Workforce
Until recently, the Hamilton Standard Electronic Manufacturing Center (HSEMC) had a two-tiered compensation system of hourly and salaried associates similar to that found in other manufacturing sites. HSEMC decided to eliminate this traditional system and implement a single compensation system for all employees. This change was motivated by a need to unify the workforce, break down invisible barriers to communication, simplify systems, reduce administration costs, and enhance organizational agility.
Effective January 1, 1993, HSEMC transitioned to an all salary workforce following a July 1992 announcement by the Business Unit Director. Progress updates were given in periodic meetings through the remainder of 1992. Human Resources held small group meetings with all hourly associates to explain transition improvements. A Financial Services Seminar was conducted to assist associates with budgeting and other concerns.
Under the salary system, associates receive greater vacation and sick leave eligibility, enhanced short and long term disability benefits, and more excused absences with pay than under the hourly system. Other changes included discontinuing cost of living allowances, vacation incentive accrual, and automatic increases. Payroll checks are now issued semi-monthly rather than weekly.
Benefits to the process have included an overall simplification of administering and using the system. Invisible barriers to communication have been eliminated resulting in a more unified and focused workforce. Costs have essentially remained unchanged; however, there was an unexpected decrease in the cost of sick pay which had been expected to increase. The response to going with an all salary workforce at HSEMC has been that this is a win-win situation for everyone.
For more information see the
Point of Contact for this survey.