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September 14, 2010 / W. Stanton Smith

Contribution and Compensation

At any given time your pay is out of sync with your contribution. Why?

Because it is most feasible to adjust pay once a year. At that time, you will either be over or under paid. So viewing pay in any particular year is myopic and leads to disappointment.

But how else can it be viewed, you ask?

In my experience if pay can be viewed over a longer period of time there is much less anxiety over one particular year and more focus on “am I getting to my longer term goal”.

What do I mean?

Suppose I could tell you that 5 years from your joining my business you will double your base salary and in another 5 years you’d double it again…and further that in between each year would be relatively even so that you could count on a smooth quadrupling of your pay over 10 years. I’d suppose that many of you would jump at the chance.

Now I’d also tell you that this scenario is for full-time outstanding results and that other arrangements would build off this model. The result of this would be far less time spent of the topic of pay increases and more time serving customers and clients.

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