How to determine salaries?

[KerryK]

I was wondering if anyone could give me some advice on how I should structure salaries for my new venture. I anticipate taking on 3 employees and think it might be a good idea to issue performance based salaries.

I've been told I can go with base salaries as a percentage of turnover; or that I can offer a base salary with bonuses based on company performance. Can anyone give me advice on this and maybe some real world examples of how I should structure it?

Many Thanks,
Kerry

 

[bwglaw]

If you are a new business I would not advise in setting up a 'performance related pay' package because this needs to be set up most accurately and to set out clear performance indicators etc

Performance related pay is quite common for senior management.

I do not know anything about your business and what these employees will be doing and which route is the best for you.

Jonathan

 

[weddingcrafter]

Hi Kerry,

You need to be very careful with this as you must ensure that the targets you set will produce the required results.

For example, one company I worked for (better keep them anonymous :lol: ) decided that to improve the productivity of the call centre they would introduce a bonus scheme. The more calls the agents answered, the more bonus they earned. The number of calls answered increased dramatically but unfortunately lots of customers were being cut off as soon as the call was connected and a large proportion of the calls turned out to be from the agents firends in the next department.

Too many organisations go for the targets which are easy to measure rather than the right ones.

But good performance incentives can certainly work.

 

[Simon.L]

have you considered a retro contract?