How Much Should Someone Make?

This is always a topic that bring out a number of answers.  The agressive person always answers "As Much as I  can".  There are those that call all over town and expect to be paid "the going rate", and let's not forget our friends in the Union that have been setting standards for pay for years.

Our country has areas with different standards and different compensation needs.  If you look at an apartment in New York City, and then look at the same thing in Atlanta or Dallas you  would find the very same apartment renting for very different amounts.  It is the same for fuel, and food and entertainment, if you move to different parts of the country the price of the same items change.

Taking these differences into account, how do you make sure your employees are properly compensated?  I once heard a plumbing contractor complain that the city garbage collectors had just negotiated a raise and they were making more than his journeyman plumbers. Not to be one to just accept thing I did some checking and I discovered that the trash collector had ask for wages that were equal to the average household income in their city.

That got me thinking, since I am such a proponent of productivity based pay, where do set the base to start from? 

Here is my though process;  I first set the standard that a skilled journeyman technician has completed enough education and has enough experience to at lease qualify them to expect to make an average living in the community they live in without have to work more than 40 hours a week or send their spouse to work to supplement their family income.

From there it is simple. Take your average household income and pay your average Journeyman technician that much for a 40 week.  If he works overtime or earns a bonus that is additional income over the standard.

There is another aspect here that is a side benefit to paying your people well.  If they are paid well enough that they don't need 2 incomes to make ends meet, they are more likely to be available to work longer during your busy times when the business stands to make serious profits from the rush.  Don't shoot your self in the foot by making a technician or a dispatcher choose between going home to watch the kids while his wife is at work or putting in extra hours at your business during the big freeze or the heat wave.

After all, if your pricing your services correctly, your customers pay these great wages, you just get the credit.