Raises

Subject: Raises
From: David Orr <dorr -at- ORRNET -dot- COM>
Date: Wed, 28 Jul 1999 12:09:29 -0500

We look at the rate of inflation, average industry wages, and how the
company is doing and announce a percentage increase for everybody at the
beginning of each year. These increases, averaging 3% over the past few
years, are not tied to "performance," but are given automatically on the
person's anniversary date.

At the end of each year, we look at business results and announce a
bonus pot of money, equal to about 10% of the bottom line profits. (No
profits, no bonus.) We figure everyone, tech writers, admin assistants,
receptionist are all important parts of achieving a good result, so
everyone gets the same fixed dollar amount, regardless of salary level.
Executive management and salespeople with commissions are not eligible,
so the pot is split among the people who do the hands-on work. Bonuses
ranges from $500 in a slow year to $2500 per person in the better years.

All the backbiting, bickering, blaming, and self-serving information
transmission that used to occur when we used individual performance pay
magically disappeared as soon as we instituted this plan six years ago.
This plan was inspired by reading G. Edwards Deming on the deleterious
effects of performance pay.

M. David Orr
Orr & Associates/The Usability Group
http://www.orrnet.com

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