James Schramko here and I’ve got something interesting to share with you about pay plans.
A lot of entrepreneurs are seeking risk and they’re very comfortable with it. And that’s why, often when we’re thinking about how we reward someone, we look at a commission structure. Sometimes we’ve come from a sales background, and commission structures are the way things are done.
But my point today is this, not every person is motivated by commission structures. In fact, you might find an employee will be absolutely delighted for a safe, secure, big, fat salary. So think about this, if you are looking at a new pay structure, make sure that who you’re talking to is the kind of person who really wants a commission structure, if that’s what you’re intending to put in place.
Now, it’s understandable that you might be looking for a performance-oriented result. However, if you do pay a big, fat salary, then the employee will need to work hard and meet those expectations from the big salary. And if not, then you have a performance situation that you can talk about. Also, remember when you have a big number in mind as an annual salary, you’re getting to pay it in installments as the owner of the business. Even $120,000 salary is going to be paid in $10,000 monthly installments. So you’re not paying all of that upfront and wages are tax-deductible.
I hope this is giving you some insights into how to pay your team members. I’m James Schramko and this is exactly what I talk about inside SuperFastBusiness Membership where I coach you and help you grow your business without making all the mistakes that other people make.
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