SET COMPENSATION RATES AND EXPECTATIONS FOR YOUR STAFF
DO YOU struggle with how to increase your staff salaries? Have you seen disappointment on an employee’s face when you offer a raise he or she feels is not adequate? Developing a competitive wage scale will take away the headaches of what to pay and what to increase and sets a standard of expectations for your staff.
Here’s how to create a competitive wage scale:
DO YOUR RESEARCH
To begin, define each position, including educational requirements, responsibilities and core competencies for each role.
Then, research the industry wage for the positions on Payscale.com or Salary.com, or check with your state association to see whether it has data from a recent salary survey. Try to narrow these down to your exact location to truly see the competitive going rates for your area.
FIND WHERE YOU FIT
Next, plot out this information on a bell curve to establish, based on the average salary in your area, where other salaries would lie. For example, the bottom 10% of opticians in Anaheim, Calif., according to the graph with information from salary.com, makes $41,262 annually.
When calculating your annual salary for this position, include non-salary benefits, such as health insurance, bonuses, education reimbursement, vacation and sick time.
| EXPERIENCE | STARTING WAGEC | 2ND YEAR WITH THE PRACTICE | 3RD YEAR WITH THE PRACTICE | 4TH YEAR WITH THE PRACTICE | 5TH YEAR WITH THE PRACTICE | 6+ YEAR WITH THE PRACTICE |
|---|---|---|---|---|---|---|
| 1 to 2 years | $41,000; 2 weeks vacation; benefits; 3 sick days | 2% Cost of Living 3% Performance = 5% Raise $43,050 | 2% Cost of Living 3% Performance = 5% Raise $45,202 | 2% Cost of Living 3% Performance = 5% Raise $47,462 | 2% Cost of Living 3% Performance = 5% Raise $49,835 Add 1 week vacation (dollar value ~$1,000) | 2% Cost of Living 3% Performance = 5% Raise $52,326 |
| 2 to 4 years | $44,607 | $46,837 | $49,178 | $51,636 | $54,217 Add 1 week vacation (dollar value ~$1,100) | $56,928 |
| 4 to 6 years | $48,281 | $50,695 | $53,229 | $55,890 | $58,684 Add 1 week vacation (dollar value ~$1,130) | $61,618 |
| 6 to 8 years | $58,220 | $61,131 | $64,187 | $67,396 | 2% cost of living raise only $68,744 Top of pay scale Add 1 week vacation (dollar value ~$1,300) |
2% cost of living raise only $70,118 Top of pay scale |
| More Than 8 years | $67,270 | 2% cost of living raise only $68,615 Top of pay scale |
2% cost of living raise only $69,987 Top of pay scale |
2% cost of living raise only $71,386 Top of pay scale |
2% cost of living raise only $72,813 Top of pay scale Add 1 week vacation (dollar value ~$1,400) |
2% cost of living raise only $74,269 Top of pay scale |
BUILD YOUR SCALE
A compensation scale lays out expectations of what increases are going to happen through a few years. It is based on the staff member’s experience at the outset of employment. In addition to basic salary compensation, integrate bonuses and high-performance increases. (See chart on p. 48 for an example.)
Once employees are at the top of the pay scale because of experience and long-term employment, give them extra responsibilities, so you can raise their rates by raising their positions.
FINAL WORD
If you want to keep staff happy, know your industry wages, and pay a little better than everyone else. OM
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