How Much to Pay Remarkable Employees
Forget pay scales; forget industry benchmarks; forget, "I can't afford to pay any employee that much."
When an employee is remarkable--and here's how to know if an employee is not just great but remarkable--forget all that.
Why? Here's a cool story from David Halberstam's The Breaks of the Game.
In 1974, Lynn Swann was drafted by the Pittsburgh Steelers. Swann was selected seventh, but his agent, Howard Slusher, managed to negotiate the second-highest starting salary among rookies that year. (In short, Slusher got Swann No. 2 money even though he was the seventh pick, a fairly rare feat that was great for Swann and great for Slusher's image as a capable negotiator who could deliver for his clients.)
At the press conference to announce the signing, Slusher was pulled aside by Art Rooney, then the owner of the Steelers.
"You think you screwed us, don't you?" Rooney asked Slusher.
Slusher took the politic route and didn't respond. In fact, he did think he had gotten the best of the Steelers.
"You're wrong," Rooney said. "We got you. My son says he's not a good football player, he's a great football player. Probably the best draft pick we've ever had. Maybe better than Terry Bradshaw or Joe Greene." (As it turned out, Rooney was right; Swann went on to have a Hall of Fame career.)
Slusher could tell Rooney was trying to make a point, so he remained silent.
"Let me teach you a lesson, young man," Rooney said. "You can never overpay a good player. You can only overpay a bad one. I don't mind paying a good player $200,000. What I mind is paying a $20,000 player $22,000."
Great employees are worth a lot more--to your teams, to your customers, and to your bottom line--than average employees. Remarkable employees are worth dramatically more.
So forget scales and benchmarks. Pay them not just as if you want to keep them but as if you desperately need to keep them.
Because you do.