How much should you pay your employees?


The idea for a local salary and benefits survey came to Virginia Detweiler in the classroom.

As a business instructor at Walla Walla University and Walla Walla Community College, she facilitated business counseling sessions with local companies as a training mechanism for students. But one finding that emerged from the sessions disturbed her.

"In a small town, people tend to make pay decisions based on pretty sketchy information," she said. "Some businesses are overpaying their employees. There are businesses in town that are struggling only because they overpay."

Conversely, there are businesses that struggle to retain qualified employees because they don't pay enough.

So Detweiler, a labor economist who worked as a compensation counselor in corporate America before moving to the Valley to teach, set out to create a survey to help businesses get a sense of the high, low and average pay throughout the community for different jobs. Her next step is getting the word out.

Her survey site -- -- is designed to accomplish two goals: collect accurate data on the types of information that survey firms almost never collect for communities outside of metropolitan areas, and to get a better idea of the value of individual jobs in the area.

"What the survey should do is tell us what the picture really is," Detweiler said.

Through a quiet test of the survey, developed over the last 18 months, she said she's learned that pay decisions are often made erratically.

"It is partly because (business operators) don't have good information and partly because they have no training," she said.

As the economy recovers from the worst recession since the Depression, thoughtful planning will be a key for long-term stability, she said.

"The thing that's happening now that I didn't expect to see in my career -- and what made me want to get back into this -- is we are resetting supply and demand."

She said companies that were cavalier with their hiring practices before are becoming more deliberate about their staffing.

"Five years ago, they'd hire somebody just to make their lives easier. Now that position has to justify itself."

Detweiler plans to offer two free demonstrations of the website and a paid workshop for managers interested in learning about changes in employment, compensation expectations, what employees want, what's happening in the labor market and more.

The first rule of compensation: "You have to accept life isn't fair," Detweiler said.

"Britney Spears is a multi-millionaire, and your child-care provider is barely making it, and you trust her with your kid."

But when it comes to determining what's the "right" pay for a certain position, there's no clear answer.

"The right answer to every compensation question is two words: 'It depends,'" Detweiler said.

The skill and performance of the individual workers must be considered with the resources of the company in order to find an answer. But having a base set of information to compare other companies in the community is a helpful start.

Detweiler's one concern is that the site could have a similar reaction from local workers as . She fears that workers would try to use the results to manipulate companies into giving them raises. That's why education is such an important component, she said.

"What a business decides to do with their pay is their decision," she explained.

She said she believes the results, if used correctly can mix the "wants" of the employees -- best pay, recognition and job security -- with the "wants" of management -- stability, performance and controlled costs.

"If you do balance the needs of employees and businesses you have a much better chance of success."


Log in to comment