What Managers Make

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Pension 31 79 14 7

Dental insurance 28 79 19 2

Club membership 13 82 15 3

Low-interest loans 10 - - -

Stock ownership (ESOP) 8 - - -

n1 % of the companies providing benefit

Average value of deferred income, options,

other discretionary benefits

Function 1981 1980

General management $2,700 $1,500

Finance 4,100 2,900

Operations 3,700 1,900

Manufacturing 3,500 2,600

Marketing 4,000 3,700

Other 2,100 1,800

Most middle managers are covered by medical, life, and disability insurance. Beyond these common benefits, profit-sharing and company cars are provided by two out of five companies. Dental coverage, club privileges, and employee stock ownership are far more the exception than the rule. Where benefits are offered, 100% of the cost is underwritten by at least three out of four employers. The average value of compensation beyond base salary and bonus ranges from $2,100 to $4,100.

THE FACTS BEHIND THE FIGURES

This report represents INC.'s Second Annual Compensation Survey. It summarizes a national study of middle management compensation levels and policies in a broad cross-section of smaller businesses. The primary research for the report was conducted in June. A four-page questionnaire was mailed to a random sampling of 7,024 INC. subscribers. Excluding undeliverable, incomplete, and late returns (those received beyond a June 10 deadline), the net response rate was 5.4%. Some 377 usable returns were then delivered to an independent computer facility for tabulation and cross-reference summaries.

Confidentiality of all information was assured. No company or individual respondent was identified. The responses represent 377 companies that provided compensation data on a total of 927 middle managers. In 76% of the cases, the information was submitted by a top officer, including chairman, president, or owner/partner.

Located in 40 states and the District of Columbia, the respondents also represent 78 four-digit Standard Industrial Classifications within 11 broad industry categories. The majority are in manufacturing (27%) or wholesale/retail business (27%). Other major groups include service/business (16%), service/professional (13%), and construction (8%). Ninety-two percent are corporations, 5% partnerships, and 3% proprietoriships. Only 6% are publicly held.

The vital statistics of the respondents as a group include the following averages:

Net sales $3,902,000

Net income $162,500

(after taxes)

Number of employees 74

Total 1981 payroll $971,000

Number of top executives 3

Number of middle managers 4

Total remuneration $27,900

Base salary $25,200

Cash bonus $4,200

HOW BIG ARE BONUSES?

No. of company employees

Cash bonus 1-49 50-99 100-299

None n1 15% 12% 18%

$1,000-$4,999 57 64 56

$5,000-$9,999 15 10 14

$10,000-$19,999 10 10 7

$20,000 or more 3 4 5

n1 % of the middle managers, 1981

SALARY INCREASES FOR '82

Percent of

1982 respondents

Increased salaries 64%

Did not increase salaries 36%

Average Size of raise

Industry Increase 1-9% 10-14% 15%+

Mfg. 9.5% n1 54 39 7

Whsle./ 10.6 33 50 17

retail

Service/ 11.0 46 38 16

business

Service/ 12.9 30 37 33

profess.

Construc. 12.2 23 54 23

All respon. 10.8 42 41 17

n1 % of the companies giving raise

Two out of three companies increased middle-management salaries this year. Among those who granted raises, 42% kept the increases below 10%, and 41% awarded increases of 10% to 15%. The average raise was 10.8%

THE 10 BIGGEST PROBLEMS WITH MIDDLE MANAGERS

Percent of

Problem respondents

1. Motivation, defining roles 38%

and goals

2. Training 24

3. Recruitment 17

4. Turnover 9

5. Skills with subordinates 6

6. Communication with top 5

management

7. Quality adherence and 4

accountability

8. Creativity, generating 4

innovative ideas

9. Too many the same age 2

10. Room for advancement 1

(Total exceeds 100% because of multiple responses.)

More than one out of three companies cite motivation as the chief hurdle in dealing with middle managers. Other problems range from training and recruitment to creating opportunity for advancement.

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