Money Talks

Resources that offer guidance on the how-tos of paying your employees
Magazine Contributor
3 min read

This story appears in the December 2000 issue of . Subscribe »

Can you annoy your employees in the same moment you think you're doing a good deed? Truth be told, many young bosses grossly mishandle when and how they give out pay raises and bonuses. Understand this: Pay needs to be part of a consistent policy. Hand out raises the way Mom raised your allowance, and, guess what, you've screwed up, big time.

True, money is a tough topic. And a boss who rolls straight ahead without learning the right way to handle these issues is heading toward big trouble. Plenty of Web sites offer guidance on the how-to of paying workers:

Just want the basics of paying workers? Follow this link. This is your read because the article, based on information provided by consulting firm Effective Compensation Inc., walks you through the facts of doing this delicate work right.

Bookmark this site, where you'll find the "HR Web Guide: Employee Compensation," prepared by University of Vermont staff. It's a rich collection of links to key compensation-related Web sites. Whatever your question, this is the place to head first for answers. Everything from minimum wage laws to employee stock plans gets covered here.

If there's a mantra in compensation theory, it's that you get more of what you reward. But what does that mean? Click here, there's a pithy article by consultant David Kinne designed to give bosses an objective tool for deciding exactly how much every employee should get in raises and bonuses. Tip: If you follow this advice in determining raises for your people, give out the URL to employees. The more they understand the thinking that shapes compensation in your business, the better they'll work, and the more they'll earn. That's truly win-win, for them and you.

A generation ago, seniority was probably the key determinant of how much a worker earned. Today, seniority has nothing to do with it-but what does? Skills and contributions, says Martin Kenny, a compensation consultant with HR firm Baker, Thomsen Associates. His article "The New Pay: Innovations in Employee Compensation" walks you through the thinking at America's leading corporations.

Should you build stock or options in the employees' pay packets? Probably-that's becoming a key reward strategy. But this isn't as simple as handing a worker a certificate good for 100 shares. Get insights into the complexities involved in awarding equity to employees by dipping into, a white paper prepared by law firm Rosenman & Colin.

Exactly $15.36 per hour (a tad over $600/weekly) is the average pay across the United States, says the Federal Bureau of Labor Statistics' recent survey. Benefits added $5.80 per hour to the pot. Crunch those numbers another way, and employee benefits add an average of 38 percent to the pay packet. Like those kinds of specific numbers? BLS is a treasure chest of data, and its compensation-related research is found here.

Do you pay yourself too much? Don't giggle-the IRS doesn't, and if it decrees that your pay packet is bloated, all manner of tax consequences will follow. Get the scoop on this little-understood part of tax law at, a white paper from accounting firm Schneider Downs.

Want just one book that provides the practical information you need to create the kind of compensation strategy that will let your company grow? Pick up a copy of Pay for Results: A Practical Guide to Effective Employee Compensation (Silver Lake Publishing) by Karen Jorgensen. This book is aimed at filling your needs.

Robert McGarvey and Babs S. Harrison collect their pay packets from their Sonoma County, California, base.

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