Money Talks
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 www.rosenman.com/cabcewe.htm, 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 www.sdcpa.com/focusoct99.html,
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.