What’s My Compensation?

Summary

• When rolling out a new initiative without much data, avoid guessing on compensation; in the past, I guessed on comp and had to change it later, which upset people because it ended up being lower.
• It's better to offer a stipend for the first 3 to 4 months during periods of change and uncertainty; this approach protects the interests of both the employee and the company.

Video

How To Take Action

A good way of doing things when starting something new in your business is to avoid making guesses about pay. If you don't know how much money an idea will make, don't just pick a number. In the past, I chose a pay amount without enough information. But when I had to lower it later, people got really upset. No one likes earning less than they were told.

Instead, I suggest paying a fixed amount, called a stipend, for the first three or four months. This is really smart when you're not sure how things will go. It means you can pay your team without promising too much and then having to take it back. Plus, it gives you time to see how well the new project does.

Here's what you should do:

1. When you start a new project and aren't sure how it will do, don't set up fixed pay yet.
2. Explain to your team that because things are changing, you will give them a stipend for a few months.
3. Tell them this is to keep things fair for everyone while you figure out the right pay.

By doing this, you won't upset your team, and your business will be safer too. Changes can be hard, but planning this way makes it easier for everyone to handle.

Quotes by Leila Hormozi

"I'll take a guess at what your comp should be"

– Leila Hormozi

"It ended up biting me in the ass in my first company"

– Leila Hormozi

"I guessed on their compensation and I had to change it 3 months later"

– Leila Hormozi

"They were pissed"

– Leila Hormozi

"We're making a lot of changes I need to just pay you a stipend for the next 3 to four months"

– Leila Hormozi

Full Transcript

what's my comp if I'm rolling out a new initiative and I don't have much data on like how many packages are they going to sell is this the pricing we're going to keep in the beginning of my career I might have said oh I'll take a guess at what your comp should be it ended up biting me in the ass in my first company because I guessed on their compensation and I had to change it 3 months later and they were pissed the reason they were pissed is cuz it was less that it had to go to now what I do is I tell people you know what we're making a lot of changes I need to just pay you a stien for the next 3 to four months because that's what's best for you