Ep. 20: Compensation – The ONLY Way to World-Class (6 of 6)
In this FINAL episode of this Compensation series, Andrew covers many of the Recommendations and Important Points When Creating Compensation Methodologies, including: bringing people Close to Revenue, getting rid of Annual Bonuses, pay Frequently & Immediately so checks teach Cause-and-Effect, wire Objectivity into the system, and keep the model Simple so it Self-Regulates. He lays out Percentage Splits that actually motivate, creates Acid Tests for ROI, eliminate COLA/Annual Raises (make it rich so no one asks), moves costs Variable from Fixed, and codifies Principles for Raises/Promotions (listen to the What Are You Willing to Throw Your Life Away On? Podcast Episode #7). He also covers Cross-Training, an Economy of Codes, Fewer Standards (five), and a warning: Overpaying DAMAGES people— as all compensation should be EARNED so people can understand their true Value in the marketplace… as well as helping a person be truly Happy and Content.
Chapter Markers
(00:00) Intro
Chapter Markers
(00:00) Intro
(01:52) Close to Revenue — Sensitize everyone to ups/downs like owners
(03:52) Kill Annual Bonuses — Pay frequently so checks teach behavior
(05:42) Timeliness Matters — Pay now or breed contempt
(07:13) Make It Objective — Systems, not squishy relationships
(08:23) Tight Accounting — Accuracy, speed, and fewer errors
(09:46) Splits That Motivate — Model 50/50 vs 30/70; avoid “excessive pay”
(11:07) Taxes & Reality — Company share isn’t the “whole wad”
(12:03) Acid Tests for ROI — Simple unit math to cut through fuzz
(15:27) Volunteers & Value — Karma dollars and executive-level leadership
(16:35) No COLA, No Annual Raises — Make it rich; retention proves it
(17:46) Mileage & Variability — Flex with real costs (AAA, trucking inputs)
(18:58) Principles for Raises/Promotions — More value, not longevity
(22:25) Risk Reversal — Proof of concept, then share in savings
(24:22) Not All Paid the Same — Pay by value; everyone can learn to sell
(26:05) Cross-Training (Ten-Two) — Redundancy, anti-fraud, school, documentation
(29:01) Keep Codes Sparse — Eliminate discretion; complicated breaks
(31:03) Pay for Result — Treat pros like pros; automate, minimize exceptions
(32:32) Fewer Standards (Five) — Perfect phones, dress, visits + docs, on-time, report failures to CEO
(33:58) Don’t Overpay — Earned money creates deep satisfaction
(35:49) Clarifying Truths — Align with Nature; systems evolve; honor customers
Song: If All the World Were Right - andrew reed & the liberation
Song: If All the World Were Right - andrew reed & the liberation
Album: If All the World Were Right (Trilogy II Album 1)
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“Your compensation system is an extension of your people development or your training system, and you want them to learn from every paycheck.”
