Pay Your Top Producers More–A Lot More


Part 3 of 5 on Employee Pay

After a rousing success, an entrepreneur decided to sell his company to a large conglomerate.  Negotiators from the purchasing company, marveled at the entrepreneur’s achievement but gasped at the vast differences in pay among his employees.

Suspecting favoritism, a negotiator commented, “Your pay scale seems to be out of whack.”

“What do you mean?”

“You are paying some people a whole lot more than others, although they are doing the same jobs.  Why is that?”

“Well, some people produce a lot more than others.  I take care of my stars.”

The entrepreneur spoke truth.  Research by professors O’Boyle and Aguinis shows that top producers in most groups do indeed produce more—a lot more—than average employees.  A few high producers pull the average up, making most employees below-average.

Still most pay distributions follow a normal curve which makes the pay scale unfair to the very best producers.  For instance, assume twenty employees in a group. In most departments, about ten employees would receive above-average pay and ten would receive below-average pay.

You want to pay fairly?  Then pay your very top producers at least three to four times more than you pay average producers.

 

 

 

 

 

What do you think?

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s