Paying Your People: 7 Considerations for Formulating the Right Pay—Your Way

Green Bay, WI--One of the most nebulous and taboo subjects in the independent jewelry world is PAY. Everyone’s afraid to talk about it yet everyone wants a good formula for pay. So I have a few thoughts I’ve gathered that can help you create your OWN formulation.

#5. You can’t overcome lack of motivation with a pay plan. Often a change in pay can produce what Peter Smith calls in his book “temporary false positives” but in the long term will fail, because a motivated person will be motivated to perform. A good pay plan will simply reinforce and reward this and cause them to be content right where they are, in your store.

#6. Great support or non-selling folks should be paid well. Again, it’s understanding THEIR individual motivations that allows you to create a pay plan that makes them happy. Maybe Heather just had a baby and now wants to do her goldsmith work in the afternoons because that’s when mom can watch the baby. You work with her because that’s how she’s motivated and then in turn, you have a loyal employee knowing how much you accommodate her motivations.

#2. Think about the store you want to have. If you’re the magic, the top salesperson, your name’s on the building and you want to surround yourself with good support people, then simply find out what a good hourly wage is in your area and offer a dollar more. If you want a more or less autonomous and growing group of motivated individuals selling their socks off, then pay them a decent hourly wage plus a generous performance-based plan. I recommend that plan be based on profit, but you decide.

#3. In his book “Becoming Trader Joes by Joe Coulombe” the author, in almost every chapter attributes much of Trader Joe’s success to well paid employees. If folks can make more at the fast food restaurant down the road, I think you’re creating an environment of folks always looking for their next job.

#4. People are motivated individually. This is how you should pay them. For example, if a top producer is motivated by time, you pay them in accommodation and money. There is no set plan for how to do this. The important thing is to work with them, understand their motivations and develop an individual plan for them.

#7. Team goals and individual goals. I’ve seen the most success with stores that have both of these. It’s very important to have team goals because this fosters teamwork and camaraderie. Also, involve the support staff in the team goals as well. This will go a long way in developing sales and support teamwork.

The beauty of being an independent store is that you CAN individualize your pay to your people’s specific motivations. It’s one of the truly unique and wonderful things about being an independent jeweler. Take a look at your pay structure and see if you can’t tweak it here and there for optimal results.