Cameron HeroldFounder of the COO Alliance & Invest In Your Leaders Training

What is a Payment Structure? (Tips for COOs)

29 Jan 2018 · 1 min

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1:07

Cameron Herold tells COOs to build pay structures by first mapping what employees actually do, then assigning titles that match the work. Avoid title creep, where inflated titles drive up pay expectations without real responsibility behind them. Research industry rates for comparable roles and use leveled titles like Director 1/2/3 so compensation ties to scope and deliverables.

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So when the issue of pay comes up, it's really important that you first look at all of the tasks or projects that are on that person's list or on their scorecard, whether it's the COO or a VP of Marketing or Director of Sales. Regardless of what the role is, first take a look at all the projects and tasks that are on that person's plate and then make sure that you apply the proper title for that series of tasks or projects. Remember, 20 years ago, to have a C level title, you had to be a major player in a major organization. And I've seen a lot of title creep over the years where people get titles that are very inflated and it makes the individual feel that they should be paid a lot more than really their tasks or projects would actually require. So first start off with the tasks or projects, apply a proper title, and then do some research in your industry to find out what people are normally getting paid. I also like to have three levels in place for every role. So if a person is the Head of Sales, you might have a Director of Sales one, Director of Sales two, Director of Sales three, because before they go into a VP of Sales one, two, or three, et cetera, that's a great way to actually establish your compensation and make sure it's tied to the roles and projects versus the title that the person has.