For a long time, like many businesses, I overpaid most of my employees. Few business owners get anything but astonishingly average performance from their staffs because they do not have clear performance goals and only a tiered bonus plan attached to their successful accomplishment.
The most effective compensation plans offer average pay with generous bonuses for surpassing goals and may contain a number of other intangible factors. Defining performance is easy with sales positions but gets harder to define as you go to other positions.
There should be no limit as to how much you pay any of your key employees if they perform. Employees in performance-based positions (especially sales) WANT an incentive plan rather than a salary. They want to be in command of their “unlimited” earning potential. Bonuses should be tied to a tangible schedule of results and increase in tiers as specific marks are passed.
Reward employees with bonus gifts and trips. Trips are especially good as they insure the employee gets a real break and something positive to remember, rather than just using bonus money to pay off bills. Reward them with cars, but make them sign the paperwork (you make the payments) so if they leave, the golden handcuffs are on them not you.
Not everyone is motivated by money; a large portion of your employees will be motivated by flexibility. Flexible schedules allow them time to pursue their hobbies or family commitments. For this reason, I have always been flexible with days off and work hours. Many people will work for less IF they have the flexibility they desire.
It goes without saying that the more pleasing the physical work environment the better. It also goes without saying that the more fun the environment the better. Both these factor are definitely high on the intangible-compensation-factors list.
Personal and Professional Growth
One of the very best things I can tell prospective employees about working at Legendary Marketing is they will leave at least twice as smart as they came in. This is a tremendous asset that few companies can boast—offering rapid personal and professional growth. This is especially desired by younger workers (Generation Y).
Offer average pay and generous bonuses, augmented with flexibility and fun to attract and retain great employees.
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