How Much Should You Pay Employees? (Part 1)

Above all, I believe that the money and pay structure you provide your employees needs to encourage freedom and autonomy. No one likes to have a glass ceiling on their income. Not just for employees, but you as a leader I’ll bet you take some satisfaction in knowing that if you do x or y then you’ll make more income. Pay that’s based on performance or the ability to earn commission is important; not necessarily in finding the perfect mathematical formula or ratio, but in the affect that freedom has on your team members. It allows your employees to feel they can act with agency over their future. The truth is, getting rid of income ceilings for your team can be hard. This is definitely not something you can easily copy from another company... even if its from within your industry or sector. As we’ve covered in previous topics, your payroll needs to be based on your company’s own financials, your P&L, and your balance sheet. This Week’s Take Away Offering your employees additional compensation is a great way to be competitive and retain workers, but you need to take a hard look at your compensation and see if it’s helping create autonomy and freedom. Are there parts of your plan where actions result in income increases? While this will be undoubtably easier for sales staff than your admin or office workers, you need to give your employees some ownership over their paycheck. As people we’re just not wired to get excited to come in, day after day, do the same work, and get the same pay. When your workers are motivated, your entire culture is supercharged... and that starts with putting freedom and autonomy in your comp plan.