Are You Paying Your Employees Too Much?

Figuring out salaries can be one of the most complex jobs in running a small business. Your competitors aren’t likely to respond to your phone calls asking how much they are paying their people, and salary surveys (which can be helpful) don’t often cover the multi-tasking required in a business with fewer than 20 people. (After all, you may need someone who can do marketing and accounting, while the business across the street has the marketing done by the same person who handles HR.)

And when you’re hiring, you’re as reluctant to bring up salary first as the companies you used to work for were. The result of this can be that you’re paying your employees the wrong salary. We all know the problems associated with underpaying–lack of motivation, high turnover, and general disgruntledness. But what about the problems with overpaying?

To keep reading, click here: Are You Paying Your Employees Too Much?

(And for the record, I don’t mean you. You, of course, deserve a raise!)

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4 thoughts on “Are You Paying Your Employees Too Much?

  1. Seriously….let’s screw the employees EVEN MORE since the recession isn’t over.

    1. Methinks you didn’t read the whole article. Paying market rate isn’t screwing anybody over. And for top performers, you should pay above market.

  2. Great post! Sometimes paying above the market is a strategy, but as they say, “there’s always an idiot on the market, if you don’t know who it is, better start worrying” (aka, why are you overpaying?). I prefer the start up idea of total compensation (based on low salaries and adjusting later), but this works in a profile of “risk taker professionals” (“non risk takers” may take jobs with lower total comp but with higher fixed pay). So I guess that (conscientiously) fine tuning the system is the main challenge here 🙂

    1. Compensation is really hard! I’ve found, through freelancing, that having a bit of the risk on my head makes me a better performer.

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