The Pamphlet Collection of Sir Robert Stout: Volume 54
Remuneration of the Staff
Remuneration of the Staff.
The questions that arise naturally in every large institution as to the remuneration of the staff and the promotion of certain members of it must be dealt with on broad and fixed principles, which must be laid down, not only with regard to the present, but also with a view to their probable working in the future. The fundamental object, of course, must be to obtain an efficient staff who are interested in their work, and to pay this staff at the least possible expense, consistently with its being thoroughly efficient. These are of exactly the same sort of questions as have to be considered by statesmen in considering as to the remuneration of the servants of the State, both civil and military; and they have to be decided upon similar principles. In considering these questions, a broad distinction must be drawn between those officials whom it is considered very desirable, or even essential, to retain in the service of the office, and those which could be replaced without difficulty, either by inviting applications from outsiders, who have had no special experience, or by promoting juniors. The principal considerations to be kept in view are threefold. In the first place it is desirable that all the officials of a large and wealthy company should have such remuneration that they may be able to live in comfort; and it would be very false economy to reduce the salaries to such a point that any members of the staff feel themselves to be placed at a disadvantage as regards other persons in their own rank of life or in similar employment. The other considerations which bear upon the question are (secondly), what salary could any member of the staff obtain elsewhere if he left the service of the company? and (thirdly), what would it cost the page 18 company to replace him? When an official is a man of experience and of more than average ability, it may be thought very desirable to retain his services, because it would cause inconvenience and additional expense to part with him. For instance, it may be clear that there is no junior member of the staff who could be promoted to take his place, and that therefore, if he left the service of the company, it would be necessary to invite the services of an experienced official from some other company, and in this case it is clear that the salary to be paid must be at least as much as the official could probably obtain in another company. But, if the official, although discharging his duties satisfactorily, could be easily replaced, then the question what he could obtain by leaving the service of the company becomes immaterial. In fact, the company can then take up the position—"You are perfectly at liberty to leave our service if you think you can better yourself elsewhere," and the salary has then to be adjusted simply with regard to the other two considerations. The regulations as to promotion are also very important. The conclusion at which I have arrived as the result of my observation and thought is, that