COACH'S CORNER
By Barry Knepper
As Seen In Queensborough - The Magazine of the Queens Chamber of Commerce

Why We Pay People What We Pay Them:
At a recent TAB Board meeting, several members shared their experiences of employees approaching them for money (stating they were in need of a raise, a bonus or an advance). We had a good discussion about how to deal with these situations resulting in a philosophy on compensation. We suggest using this guideline as a reminder of what we do and do not base compensation on.

Here is an example of how you could script this communication:

At XYZ Company, we aim to pay competitive salaries that reflect what each employee brings to the table and the role they play in the company. The principles on which we make compensation decisions include:

• Base pay - when a person is hired or when we decide whether or not a raise is in order, our intent is to pay in line with the market for the position
• Skills and experience - what skills and experience do you bring to the table and how do you and your position impact the company?
• Relativity of pay - we look at the pay for people who perform similar functions to make sure that the top people in a particular job are paid the most and vice versa
• Difficult times/recessions - during difficult times like the current recession, we may reduce salaries in order to avoid layoffs
• Bonuses - bonuses are based on the performance expectations in the above bullets and any above-and-beyond expectations that lead to positive results for the company. Bonuses are contingent on overall company profitability- we aim to share profits with those who had the biggest impact on driving us to a profitable year

What we don't do:

• You and the company had a good year- raises will not be given and instead this is what bonuses are for
• Personal financial situation- we don't make pay decisions (raises or bonuses) based on an employee's personal financial situation. While we are empathetic to our employees' personal situations, we must keep our compensation practices in line with what is right for the business

Barry Knepper is the certified facilitator and coach in Queens for The Alternative Board ® ("TAB"). Board members meet monthly to learn from one another's successes to grow their businesses to the next level through a combination of peer advice and coaching He also serves a part time chief financial officer ("CFO"), utilizing his 35 years of CFO experience to help business owners maximize the profitability of their business through the development of a budget, business plan and monitoring of financial operations. He can be reached at 516-724-0351 or bknepper@tab-queensny.com