Phenomenal Compensation

    One of the frequently asked questions I get as a business coach is, “How do I pay my people so they will perform?” The answer, “You don’t.” Studies have revealed that employees rate their pay behind four other more important factors, such as 1) how they are treated, 2) whether they feel “in” on things, 3) their benefits, and 4) work environment.
    They may not verbalize this and may not even be aware of it, but the fact remains that people stay because they feel they belong and you are adding value to them. Of course you do have to pay them well; and if you don’t handle this part right, you can have serious problems.

    Many conflicts seem to arise over money-related issues, but my contention is that the conflict is actually due to a lack of communication. Be very clear and upfront with your employees about pay issues.
    How you pay is just as important as how much you pay. If you have the right person in place who is onboard with the vision, mission, and purpose, you can pay many ways and still get results. Some positions require more incentive or performance-based pay to increase production.
Here are some pointers:

1. Determine how much the position is worth. You do this by referring to your 12-month budget to determine how much you will invest in the position.
2. Determine what impact the position can have on profits. Can this position up-sell? Can it affect gross profits? Can it make or cost a sale? Does this position generate prospects?
3. Break it down. I prefer to pay an hourly base and give bonuses on extraordinary performance.

    My good friend Ellen Rohr says, “If they bring it in on time and on budget, they get to stay. If they bring it in early and under budget, share the gain with them.” This creates a game that’s fun to play.

    Keep the team informed of the score, and work together to create strategies. In my service company, we post the sales numbers daily. They celebrate successes and rally at the last minute if we’re behind to pull it out. We offer a number of bonuses to foster that, but it’s all in the budget.

    When we do events at Phenomenal Products, the staff works really hard and really long. I always share some extra dough with them for that. They would work hard every event, but this ensures that they’re watching the numbers as closely as I am.

    So the bottom line of pay systems is to treat them right, recognize them, give them benefits, create a positive working environment. Pay them well on top of that and you will be on your way to phenomenal leadership!

(Reference Pages 223- 224 of the 5 Secrets of a Phenomenal Business Book by Howard Partridge)

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