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How can a pay structure engage 67% of your employees?

Mon, 09/21/2015 - 16:49
How can a pay structure engage 67% of your employees?
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I just got paid today, got me a pocket full of change” - ZZ TOP

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People Profits Principle #28


Pay differences between employees
should reward/retain top performers
and motivate all others

Thereby, engaging, motivating and setting a standard of performance.

Is your pay structure based on? 

  1. Time SERVED. 
  2. Wage SURVEYS.
  3. SUBJECTIVE opinion of somebody somewhere. 

Would it not make more sense to base it on?

  1. OBJECTIVE value and productivity
  2. INDIVIDUAL achievement
  3. The highest pay for consistent STELLAR achievement
  4. Rewarding INCREASES in performance and VALUE

Shouldn't pay structures?

  1. REWARD AND RETAIN stellar performers
  2. A CLEAR DISTINCTION in pay for sub par/par versus stellar performers
  3. MOTIVATE non-stellar performers to higher value and performance.
  4. Assist in the DEVELOPMENT OF OBJECTIVE performance criteria.


Click here to use our FREE Employee Turnover Cost calculator

What does this mean for you? 

  1. The REVENUES per employee are INCREASED 
  2. Stellar employees FEEL VALUED and less likely to leave
  3. None stellar employees are motivated to increase PRODUCTIVITY
  4. Or they will MOVE ON 
  5. Employee ENGAGEMENT and RETENTION is increased 
  6. Employee COST PER $1.00 of REVENUE is reduced. 
Click here to read a related article
Click here to read more about People Profits Principle #28

People Profits case study: In many cases, when I first review compensation I struggle to find the system, structure or even logic in the pay rates. The more I look into it I quickly determine my source of confusion. There was no system, structure or logic to find. That is why I could not understand it. The obvious point is - if I could not understand it then how could the employees?
For a manufacturing/service company I reviewed their Branch Managers, Operations Supervisors and Secretary positions. I then ranked them based on objective values. In many cases, the employees with the best results were the lowest paid and the best results were in the middle or bottom of pay. Once we established a system and structure, including logic, the employees understood and performance increased.      

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