Comments on: The fair way to set employee salaries http://smallbusiness.blogs.cnnmoney.cnn.com/2009/07/16/the-fair-way-to-set-employee-salaries/ Editors from FSB magazine answer your pressing small-business questions. Tue, 15 Dec 2009 12:52:55 +0000 http://wordpress.com/ hourly 1 By: yagoamat http://smallbusiness.blogs.cnnmoney.cnn.com/2009/07/16/the-fair-way-to-set-employee-salaries/#comment-1994 yagoamat Fri, 09 Oct 2009 13:51:16 +0000 http://askfsb.blogs.fsb.cnn.com/?p=1077#comment-1994 Cal, I wouldnt agree in the comment that cash is king, and always people want to earn mone and more. The truth in business, I Think, is that a balaced and clear system to remmunerate the employee, balacen for everyone takes down the expectations and makes a juste system. The important thing is, I think: 1. to hava a balaced system 2. to have a variable salary for achievements 3. use the same policy for every employee, and their position. The problem comes when subjectuve issues, or the past of the relation with the person makes differences on their salary... there is when poeple feel always they should earn more. SO i would say keep it objetive and make a system that everyone knows about it... and keep emotios out of the way Cal,

I wouldnt agree in the comment that cash is king, and always people want to earn mone and more.
The truth in business, I Think, is that a balaced and clear system to remmunerate the employee, balacen for everyone takes down the expectations and makes a juste system. The important thing is, I think:
1. to hava a balaced system
2. to have a variable salary for achievements
3. use the same policy for every employee, and their position.
The problem comes when subjectuve issues, or the past of the relation with the person makes differences on their salary… there is when poeple feel always they should earn more.
SO i would say keep it objetive and make a system that everyone knows about it… and keep emotios out of the way

]]> By: yagoamat http://smallbusiness.blogs.cnnmoney.cnn.com/2009/07/16/the-fair-way-to-set-employee-salaries/#comment-1993 yagoamat Fri, 09 Oct 2009 13:44:56 +0000 http://askfsb.blogs.fsb.cnn.com/?p=1077#comment-1993 Hello, I read your article and I am very interested in getting more information on the subject. Is there any book you would recommend me to get a more precise Idea of the subject? Today I work in a Strategy Consultancy firm, where this issues are as important as the next ones, so I would kindly ask you for more information if it’s possible. Kind Regards Yago Amat Martínez Aprioriservices.com¬¬¬¬¬¬¬¬ yago.amat@gmail.com Hello,
I read your article and I am very interested in getting more information on the subject. Is there any book you would recommend me to get a more precise Idea of the subject? Today I work in a Strategy Consultancy firm, where this issues are as important as the next ones, so I would kindly ask you for more information if it’s possible.
Kind Regards

Yago Amat Martínez
Aprioriservices.com¬¬¬¬¬¬¬¬
yago.amat@gmail.com

]]> By: Dann http://smallbusiness.blogs.cnnmoney.cnn.com/2009/07/16/the-fair-way-to-set-employee-salaries/#comment-1935 Dann Thu, 06 Aug 2009 20:15:16 +0000 http://askfsb.blogs.fsb.cnn.com/?p=1077#comment-1935 I was spoiled in my early career; I worked for a company called Procter & Gamble. They know how to compensate their employees, and it seems to have worked pretty well for over 100 years. They set salaries at 75% of the current (local) range for each position (based on semi-annual surveys). Everyone gets an automatic bump whenever the survey jumps due to inflation. These bumps are done quietly, one-on-one slip of paper passed from immediate supervisor to the employee. Then they provide all sorts of employee incentive and profit sharing programs. These are 'paid' to the employees in the form of company stock. The employees all become "company-men" in a hurry. The company's bottom line is everyone's private concern. Typically, at least 2 out of 3 know what TODAY's stock price is. Figure out a way to let your employees share in your success, and you will succeed. Don't buy the "best" individuals by paying top salaries, they become competitive prima donnas. Instead build the "best team" by hiring very good people and letting them become a real part of the "company". If you aren't incorporated (no stock) it might be worth while to incorporate. Or, let your CPA work out an honest and open way to share your profits. Then settle up (at least in part) 2 or 3 times a year. The employees thus see their income going up at least 4 or 5 times a year. It may only be a few dollars at a time, but it is REAL. When they think about another job, they realize they might get an initial salary boost, but those regular pay hikes and stock for retirement just aren't going to happen with the other company. I was spoiled in my early career; I worked for a company called Procter & Gamble. They know how to compensate their employees, and it seems to have worked pretty well for over 100 years.

They set salaries at 75% of the current (local) range for each position (based on semi-annual surveys). Everyone gets an automatic bump whenever the survey jumps due to inflation. These bumps are done quietly, one-on-one slip of paper passed from immediate supervisor to the employee.

Then they provide all sorts of employee incentive and profit sharing programs. These are 'paid' to the employees in the form of company stock.

The employees all become "company-men" in a hurry. The company's bottom line is everyone's private concern. Typically, at least 2 out of 3 know what TODAY's stock price is.

Figure out a way to let your employees share in your success, and you will succeed. Don't buy the "best" individuals by paying top salaries, they become competitive prima donnas. Instead build the "best team" by hiring very good people and letting them become a real part of the "company".

If you aren't incorporated (no stock) it might be worth while to incorporate. Or, let your CPA work out an honest and open way to share your profits. Then settle up (at least in part) 2 or 3 times a year.

The employees thus see their income going up at least 4 or 5 times a year. It may only be a few dollars at a time, but it is REAL. When they think about another job, they realize they might get an initial salary boost, but those regular pay hikes and stock for retirement just aren't going to happen with the other company.

]]> By: krum krumov http://smallbusiness.blogs.cnnmoney.cnn.com/2009/07/16/the-fair-way-to-set-employee-salaries/#comment-1932 krum krumov Tue, 04 Aug 2009 07:52:24 +0000 http://askfsb.blogs.fsb.cnn.com/?p=1077#comment-1932 I`d like to say that setting the "nice" employee salary is not enough and it is not a proper thing to make employees happy. Think about organizing them a small vacations or SPA procedures at least once a month . Things like this will make your employees much more satisfied, they will respect you more and they will stay at this job longer than you thought. By the way , I`m searching for Writers. Contact me via Facebook krumvaleriev@gmail.com I`d like to say that setting the "nice" employee salary is not enough and it is not a proper thing to make employees happy. Think about organizing them a small vacations or SPA procedures at least once a month . Things like this will make your employees much more satisfied, they will respect you more and they will stay at this job longer than you thought. By the way , I`m searching for Writers. Contact me via Facebook
krumvaleriev@gmail.com

]]> By: Jim Smith, New York, NY http://smallbusiness.blogs.cnnmoney.cnn.com/2009/07/16/the-fair-way-to-set-employee-salaries/#comment-1911 Jim Smith, New York, NY Sat, 18 Jul 2009 18:38:58 +0000 http://askfsb.blogs.fsb.cnn.com/?p=1077#comment-1911 One point that people are missing is if you have more than one person doing the job, are they all pulling the same load? Someone is constantly leaving work because a kid's sick, someone who has a wild weekend and is out recovering, the person left behind has to do his share of the work and the work of the other people. Does that person get compensation? Rarely. They get the work, and they get the burnout and then get let go because it looks like they are making too much money. One point that people are missing is if you have more than one person doing the job, are they all pulling the same load? Someone is constantly leaving work because a kid's sick, someone who has a wild weekend and is out recovering, the person left behind has to do his share of the work and the work of the other people. Does that person get compensation? Rarely. They get the work, and they get the burnout and then get let go because it looks like they are making too much money.

]]> By: Jon Exeter NH http://smallbusiness.blogs.cnnmoney.cnn.com/2009/07/16/the-fair-way-to-set-employee-salaries/#comment-1910 Jon Exeter NH Fri, 17 Jul 2009 22:52:33 +0000 http://askfsb.blogs.fsb.cnn.com/?p=1077#comment-1910 Brad from Chicago's comments are right on track. Depending on the competition, you may not be able to stay at the mid-point. Incentive's give your employees "ownership" to the work and it is a great motivating tool. Brad from Chicago's comments are right on track. Depending on the competition, you may not be able to stay at the mid-point. Incentive's give your employees "ownership" to the work and it is a great motivating tool.

]]> By: Jon Exeter NH http://smallbusiness.blogs.cnnmoney.cnn.com/2009/07/16/the-fair-way-to-set-employee-salaries/#comment-1909 Jon Exeter NH Fri, 17 Jul 2009 22:50:26 +0000 http://askfsb.blogs.fsb.cnn.com/?p=1077#comment-1909 Keep counting beans becuase you'll never make it as a business owner. I really hope you don't manage people because you obviously look at employees as just a number. You obviously think that any job can be done by any person. This business owner has a group of employees with a specfic set of talents. Your formulas will work to tell if the employee is making money for the company. What they won't tell you is if your employees have a certain talent that is in limited supply and your competition will hire them away from you. Keep counting beans becuase you'll never make it as a business owner. I really hope you don't manage people because you obviously look at employees as just a number. You obviously think that any job can be done by any person. This business owner has a group of employees with a specfic set of talents. Your formulas will work to tell if the employee is making money for the company. What they won't tell you is if your employees have a certain talent that is in limited supply and your competition will hire them away from you.

]]> By: Brad Farris, Chicago, IL http://smallbusiness.blogs.cnnmoney.cnn.com/2009/07/16/the-fair-way-to-set-employee-salaries/#comment-1908 Brad Farris, Chicago, IL Fri, 17 Jul 2009 20:37:28 +0000 http://askfsb.blogs.fsb.cnn.com/?p=1077#comment-1908 For production work like Video editors it makes sense to consider a base salary plus incentive. I recommend a base salary that is no more than the mid-point of the market range that you can discover on the sites the article mentions. Then add onto that some productivity bonuses that pay more for those who are more productive. Those bonuses should only pay out if the project (or company) meets certain financial hurdles to protect you from having to pay more compensation if the project (or company) lost money. This way you tie pay directly to performance and can set reasonable, and equitable salaries. For production work like Video editors it makes sense to consider a base salary plus incentive. I recommend a base salary that is no more than the mid-point of the market range that you can discover on the sites the article mentions. Then add onto that some productivity bonuses that pay more for those who are more productive. Those bonuses should only pay out if the project (or company) meets certain financial hurdles to protect you from having to pay more compensation if the project (or company) lost money.

This way you tie pay directly to performance and can set reasonable, and equitable salaries.

]]> By: Cal, Deer Isle ME http://smallbusiness.blogs.cnnmoney.cnn.com/2009/07/16/the-fair-way-to-set-employee-salaries/#comment-1906 Cal, Deer Isle ME Fri, 17 Jul 2009 04:37:39 +0000 http://askfsb.blogs.fsb.cnn.com/?p=1077#comment-1906 A very odd question for a bean counter such as me. Employer and employee are always at odds over the employees value. I will sound cruel but the fact is cash is king and no matter how much you pay employees will always eventually be unappreciative. Support staff have to be paid some fixed hourly rate but people who are in production that generate your income need a straight formular. They work harder and produce more they can earn more. While minimum wage and other rules often make that straight forward thinking legally impossible one must do good business. Add the total cost of employee (taxes, benefits, supplies etc) then compare to their productivity in income and what you expect as a business return on your investment and time involved. Have the expectations been met? If better then youcan pay more if worse then fire them. A very odd question for a bean counter such as me. Employer and employee are always at odds over the employees value. I will sound cruel but the fact is cash is king and no matter how much you pay employees will always eventually be unappreciative. Support staff have to be paid some fixed hourly rate but people who are in production that generate your income need a straight formular. They work harder and produce more they can earn more. While minimum wage and other rules often make that straight forward thinking legally impossible one must do good business. Add the total cost of employee (taxes, benefits, supplies etc) then compare to their productivity in income and what you expect as a business return on your investment and time involved. Have the expectations been met? If better then youcan pay more if worse then fire them.

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