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A very simplified Example

WARNING!!! – This post is meant to be an example for the Pay Equity post. If you don’t read that FIRST (and read this when directed), then this post will seem totally SCREWY!!! I tried to publish this first, then the more important post which uses this example, but it appears that posts appear on wordpress.com in the order they were created (drafted) and NOT in the order they are actually published, so this post shows on the screen before the Pay Equity post.

Here’s a vastly oversimplified example of a dictation service:
Base pay: $20,000, 4 employees = $80,000 base payroll
Incentive pool: 3 times payroll = $240,000

Sally has the following points:
Typing Speed(net): 60-75 wpm = 4 points
Create/mail accurate invoices = 4 points
Answer phones = 2 points
Proofread drafts = 4 points
3 years service = 6 points
Sally’s total: 20 points

John has the following points:
Typing Speed(net) 30-45 wpm = 2 points
Answer phones = 2 points
Apply customer payments (AR) = 4 points
Keeps office supplied with necessary consumables = 1 pint
1 year service = 2 points
John’s total: 11 points

Marcia has the following points:
40% closing rate on new customer leads = 6 points
Answer phones = 2 points
Typing Speed(net): 75-90 wpm = 5 points BUT this is HALVED as she is in a position (Sales) where this is less important! Net: 2.5 points.
Finding new qualified leads: 3-6/week = 2 points
Proofread drafts = 4 points, but HALVED for same reason as above. Net: 2 points.
5 years service = 10 points
Marcia’s total: 24-1/2
Andrew (the founder) has the following points:
Typing speed (net) 45-60 wpm = 3 points
Answer phones = 2 points
Create/Mail accurate invoices = 4 points
Apply Customer Payments (AR) = 4 points
Subtotal so far: 13 points – will be HALVED since these skills are needed rarely in his position. Net 6-1/2 points
30% closing rate on new customer leads = 4 points
Finding new qualified leads:12-15/week = 5 points
Payroll = 4 points
7 years service = 14 points
Andrew’s total: 33-1/2

Total points in company: 89

Sally’s pay = $20,000 + 20/89($240,000) = $20,000 + $53,932 = $73,932
John’s pay = $20,000 + 11/89($240,000) = $20,000 + $29,663 = $59,663
Marcia’s pay = $20,000 + 24.5/89($240,000) = $20,000 + $66,067 = $86,067
Andrew’s pay = $20,000 + 33.5/89($240,000) = $20,000 + $90,337 = $110,337

OK, so the totals I arrived at are probably completely unrealistic for the example business, but the point is not the totals, it’s the process. And since I’d rather deal with the process (for now) I’m NOT going to take the time to tweak the example so that it results in more realistic metrics or final results!!!

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Categories: Workplace

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