You may be a total fan of the triple j “Hottest 100”.
Maybe you like the new Ed Sheeran, Dire Straits, or maybe you only hanker for Hank Williams.
You can’t go past Elvis. Gee he was good. So many classics.
When you think about it, you probably have a favourite Elvis tune. How about Suspicious Minds?
(Go on. Off you go. This blog can wait while you sneak into the kitchen or your closest restroom to confidently belt out a couple of verses……..)
……..”We’re caught in a trap, I can’t walk out, because I love you too much baby……”
When it comes time for salary reviews and increases, do you always think it is time to give staff that are decent performers an automatic increase to their base salary?
Do you hear Elvis singing in the back of your mind? ”We’re caught in a trap….”
Fact of the matter being there are a number of SME’s that are rewarding performance with year in year out base salary increases that are finding years later they are now wearing grossly overpaid salaries. These salary inequities may be doing two things.
Thing 1. Costing you money. It is generally hard to reduce someone’s salary unless you go through a job downgrade. Therefore salary inequities that are well over market conditions are cumulative. Ka-ching, ka-ching, ka-ching.
Thing 2. Golden Handcuffing. Even if it wasn’t your intention, your overpaid benefactor of yearly base salary increases is not apt to seek any form of career enrichment or look to move should their performance deteriorate because they are getting money for nothing and their kicks for free.
Q: What’s a prudent business owner or leader to do if someone is being paid outside market conditions?
A: Get out of the trap. Go with discretionary bonuses. These are easily explained, especially if you are aware how much it would cost you to reasonably replace the person in the market.
“Oh sure, right”, you say, “I don’t even want to do that.”
Well, how about indirect remuneration? Consider giving them some paid days off, shouting for their gym membership or some training.
Fact of the matter being, you don’t have to be caught in a trap.