Michael Weimar
Ent 600
Non Equity Employee Pay Scale
The spreadsheet I created references 5 categories of employees making it easier to determine which area of management will be responsible for the employee. It also allows for the creation of additional functions within each category as the operation grows.
It is important to provide a competitive salary for employees. This will attract the best potential candidates. However, because payroll is a such a major expense for a business, it is also necessary consider the company’s bottom line.
I researched average salaries for each position. I found that many sources will having varying average salaries. For example, glassdoor.com listed the average salary of a sales manager to be $68,957. U.S. News and World Reports listed the same position to have an average salary of $137,650. There are many variables in researching salaries. The same position within different industries could vary greatly in compensation. Also pay scales are different based on geographic region. In addition, job title makes a difference when researching salaries. In my organizational chart, I listed two accounting positions. I intended for these two employees to cover various bookkeeping tasks. This would included accounts receivable/payables for one position. The other would take care of payroll. There is a large difference in average salary for an accountant and payroll clerk.
For this project, I decided to use Glassdoor average salaries for all positions. They seemed realistic for the model that we have been provided. In addition, to keep employees loyal, many are incentivized by annual increase in salary. By stating at a lower salary, annual increases are more affordable for a startup.
The sales positions are the most difficult to monetize. I used an average salary for the spreadsheet but most employed in sales are motivated by additional incentives. In my research and drawing on my own experience, companies will primarily use monetary rewards as additional incentive. This might include a 5% commission on sales made by an individual representative. Sometimes non monetary incentives are used such as merchandise and other non cash cash gifts, but cash incentives seem to motivate most individuals in this profession.
The salaries listed are only payroll expense. They do not included other benefits the employee may be entitled to receive.
References:
US News and World Reports, Best Jobs, 2019
Is Cash King for Sales Compensation Plans? Evidence from a Large-Scale Field Intervention, Madhu Viswanathan, Xiaolin Li, George John, Om Narasimhan
The Founder’s Dilemmas: Anticipating and Avoiding the Pitfalls that Can Sink a Startup, Noam Wasserman, 2012
How to Hire A-Players, Eric Herrenkohl
Master of Entrepreneurship Website for Mike Weimar 