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Question: Should plants that use rotating schedules offer shift premiums?

 

ANSWER: 

Shift premiums can play an important role at plants with fixed shift schedules, since workers stand to earn hundreds or even thousands of dollars more for taking a job requiring evening or night work.  There’s little research on their effectiveness as motivational tools, but the conventional wisdom is that they need to be at least 10% to 15% of the base hourly pay to lure people into evening and night shift jobs.

Shift premiums are much less of an issue at plants on rotating schedules because all shiftworkers end up making about the same amount from the shift premium per year.  

The exception here is workers who often trade shifts, thereby working a higher proportion of night shifts.  But for the most part, employees on rotating shifts tend to view the shift premium as part of their overall salary.  In fact, they’re often unaware of precisely what their company’s shift premium is.

Recognizing this, an increasing number of companies on rotating schedules have dropped shift premiums altogether.  The money formerly paid for shift premiums is used to boost employees’ base pay.  Workers end up with the same overall take-home pay, and it’s less of a headache from a bookkeeping perspective.

This generally works out well — provided management makes sure the move is cost neutral and does an effective job communicating this to employees.  It’s a good idea to hold meetings with employees to explain the rationale for the change and go over the numbers.

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