Myths About Compensation in Small Businesses

by Melanie Korn

Posted on May 27, 2019 at 04:21:30 PM




The business world is ever-changing and like everything else, the ways compensation is thought about, pursued, completed and discussed among employers and employees alike changes too. 

Talking about money during a job interview is something that makes most of us more nervous than it should. We usually avoid it, assume that we’re all on the same page, or just take whatever is offered and never work through any salary negotiations. But none of these are the best strategy! Salary negotiation is an important part of the job interview process and can benefit all parties when done correctly.

Here are a few myths to help easy the stress of money conversations:

Myth: Hush hush is the way to keep everyone happy.

Fact: Ten years ago keeping salaries kept quiet and completely a personal matter with no discussion among fellow employees was appropriate in the workplace, but today, it’s changed. Today employees not only often share with other coworkers their salary and benefits information, but also post it all over social media sites. Trying to ask employees to keep their salary information private is nearly impossible to manage and ensure true in today's world.

 

Myth: Your small business pay plan is in tune with the rest of competitor’s payments rates. 

Fact: Pay plan rates and increase rates vary by job and industry. Just because your company created a pay plan structure with your 5-year plan does not mean that employees will find it fair or be happy with the raise that they get today. Research the industry and job of each employee to find what average pay plan rates are- it is likely they will change from time to time.

 

Myth: An office manager or CFO is your best option for ensuring the CEO’s compensation decisions are executed.

Fact: If a small business, it may be wisest to hire a consultant to help ensure compensation plans are executed. Often in small businesses, there is so much happening that finances can be easily overlooking and be one of the biggest mistakes of entrepreneurs. By hiring an expert to consult and freelance style work to manage all finance and compensation plans, you really could succeed further.  

 

Myth: Tools available and usable for employee compensation with fortune 500 companies and benefit implementation are not applicable for smaller businesses.

Fact: What works for large companies, can too work for small businesses. Simple as that.

What has been the most successful tip your small business has found useful when it comes to compensation?  


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