Build with Leila Hormozi Are You Paying Your Employees Too Much? | Ep 29
Apr 18, 2023
The discussion focuses on the pitfalls of overpaying employees due to emotional biases. It highlights the dangers of entitlements that can arise from this practice, setting unrealistic expectations. Leila emphasizes the importance of basing compensation on fair market value instead of personal beliefs. Misconceptions about profit leading to pay increases and the notion that more money attracts better talent are debunked. A structured pay methodology is proposed to avoid guilt-driven compensation decisions, ensuring a healthier workplace culture.
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Overpaying at Gym Launch
- Leila Hormozi overpaid employees at Gym Launch, her first company, due to inexperience and personal beliefs about money.
- This led to employees developing a sense of entitlement and an unwillingness to perform certain tasks.
Consequences of Overpaying
- Overpaying employees sets improper expectations, leading to demotions, pay cuts, or stagnation.
- This ultimately harms the employee and can create resentment within the company.
Create a Pay Methodology
- Develop a pay methodology based on fair market value, not emotions.
- Separate personal feelings about money from business decisions regarding compensation.