Really smart people can be quite dense about money. If you want to make people happy and pay them less money here is what you do:
Give them the highest salary you think is reasonable and no benefits. No 401K match, no health insurance, no company presents like ipads or what have you.
Here is why:
We pay pretty well but it is spread out over all of the above. You might have a base salary of $150K but then we pay for 100% of your $35K/year health insurance with a top rated PPO (that's for a family of 4, we cover everyone 100%), we throw another $33K into your 401K, and we bonus you another $45K.
Total comp: $266K. What the engineer will think he makes: $150K.
If I wanted to maximize profits, rather than look out for the best interests of my people, I could pay that engineer $200K (with no benefits) and he would think he makes more. Most people seem to be like that, the year end stuff doesn't count when they think about how much they make.
Give them the highest salary you think is reasonable and no benefits. No 401K match, no health insurance, no company presents like ipads or what have you.
Here is why:
We pay pretty well but it is spread out over all of the above. You might have a base salary of $150K but then we pay for 100% of your $35K/year health insurance with a top rated PPO (that's for a family of 4, we cover everyone 100%), we throw another $33K into your 401K, and we bonus you another $45K.
Total comp: $266K. What the engineer will think he makes: $150K.
If I wanted to maximize profits, rather than look out for the best interests of my people, I could pay that engineer $200K (with no benefits) and he would think he makes more. Most people seem to be like that, the year end stuff doesn't count when they think about how much they make.