Re: Employee raises


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Posted by John on October 22, 2001 at 12:50:26:

In Reply to: Employee raises posted by M.R. Daniels on October 20, 2001 at 06:45:17:

Well, M.R.,

Raises don't have any lasting benefit; as Brian pointed out, there's an element of entitlement at work there.

I don't have an answer, either. I've written extensively about employess -- there's a FAQ or two, and then an entire newsletter was dedicated to this issue -- so I don't have much more to say.

If I understand correctly, the jobs you have are plug-and-play that don't require a lot of training or hand/eye coordination, or much skill level. Kinda like flipping burgers. And yet you've got some folks who you are presently paying a premium to, and you're wanting to know what to do about increases in pay from here.

For most companies, the employees are an untapped source of valuable information. But these employees don't really care. Suggestion boxes are empty. Here's what I did: in the early 1980's I went to the employees and said, "Okay, here's my payroll budget. It's just a flat dollar figure. Now we can do this one of two ways. You folks can work smart and help pull this off, in which case I'll make you all middle class -- good pay, lots of benes, etc. OR, I'll just take that same amount of payroll money and hire more of you to get the job done at lower pay. Your choice!" Guess what? They bought into the program. No more shop manager required to tell them what to do, or keep them froming goofing off, there was a huge productivity bump from them figuring out better/easier ways of doing things.... They were empowered, and their jobs took on a whole different outlook to them. Yeah, they ended getting paid more than they were worth -- but so did I. When I left three years ago the average base wage was $11.50 an hour, two weeks paid vacation, and health insurance for the whole family -- not just the employee. On top of that were production bonuses and overtime in the fall. We had NO employee turnover.

I know that didn't answer your question. In your particular case I'd probably hold the rate of pay constant (no one deserves automatic raises, particularly highly paid employees), and tie extra remuneration to some kind of performance bonus.

Good luck!


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