Benefits and Compensation

Salary Structure for Small Companies: Too Much?

On the surface, the formal salary structure program Judy Canavan helped implement at a 20-person, not-for-profit company might seem like wearing a tuxedo to a hoedown—a bit much. But when you look a little deeper, you may get a different impression.

Canavan, managing partner of HR+Survey Solutions, designs compensation programs for companies of varying sizes and industries, public, private, and not-for-profit. She is accustomed to using formal processes, but they are generally not necessary for very small companies like this one. Canavan was skeptical that a formal program was necessary when she spoke with the company’s CEO.

Canavan says, “I initially told her that putting in a salary structure was more than what was needed to manage pay when they only had a handful of employees. Usually, you wait until the company has a couple hundred employees before you need to do that.” As the discussion progressed, though, Canavan changed her mind.

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