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Porn Companies have Employees to Review too!

Porn Companies have Employees to Review too!

May 11, 2011
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Folks outside the adult industry are often intrigued to learn about the day-to-day life of someone who runs a porn company,  and nearly as often, they are most surprised to hear that we deal with all the same issues any mainstream company has, from employment law and workplace safety concerns to raises, layoffs and terminations.

Given that most of us at Pink Visual didn’t come from a corporate background, there was definitely a learning curve when it came to some of the basics, like how to handle employee performance and salary reviews.  I recall a team meeting maybe seven or eight years ago when someone asked what the average annual salary increase was for most corporations, and someone threw out the number 10%, and that ended up being the number we used as a baseline for a couple of years. Some employees found it unfair, while others were happy with that baseline, but one thing is for sure: relying on that number in the absence of other criteria contributed to a culture of entitlement that took root during that time. Employees came to see their annual raise as something to be expected, and not tied to their job performance, at all.

Once that culture of entitlement had been established, it took a couple years -- and several revisions to our policies -- in order to eradicate that culture and to establish a more results and performance-based criteria for our annual reviews. One of those changes was to move towards an “Employee Performance Matrix” for salary reviews. Google that term and you can learn more about its application in the general corporate world, but I’ll provide more information about how Pink Visual uses it here.

First, we had to set defined salary ranges for each position we have in the company.  This can be hard, since being an online adult company creates some unique positions, but it’s possible to accomplish and worth the effort.  We typically averaged out three to four different sources of salary-range information and include what the going rate is for that position in the industry (which we determined in part by asking around among other companies in the industry), we considered what other types of local jobs would this employee qualify for and what do those jobs pay, and in some cases we looked at trade-specific data, which was particularly useful with respect to design and IT positions.  The average we established helped us create a range that was fair, considering that we are mostly competing locally and secondarily competing within the industry for employees.

The next step was to adjust these salary ranges to be competitive and fair based on the value of the position to the company.  The best example of this is to compare a job that might take three months at the company to learn versus a job that might take two years at the company to become fully trained on.  In the first example, the range was adjusted so it was not as wide as the range for second example, with a low and high end that hovered right around the average we had calculated. The thought process with this was that the position could be replaced relatively quickly, so there was no need to pay well above the calculated average.  In the second example, for a position that takes years to learn we stuck with a wider range, because at first the employee may not be as valuable to the company as they will later become, so it’s okay to be below average during that time. As the years go by, that employee’s/position’s value increases and it’s increasingly important to for the company to retain them, which it does in part by paying that person above the average.  When we established this system for coming up with the salary ranges, we also decided to review our ranges every two years to ensure they don’t become outdated.

The next part was to create a matrix that outlined where the employee was within their range from the lowest quartile in pay up to the highest quartile in pay, and to cross-reference that with their rating for performance.  We use a 1 to 4 scale where 2 is a solid but average employee.   This then gets filled in with percentages of salary increases where the best performing employees who fall into the lowest quartile of pay get the highest percent increases and the highest paid employees with the worst performance get the lowest percent increases.

So the matrix might look something like this:

 

Salary Quartile 1

Salary Quartile 2

Salary Quartile 3

Salary Quartile 4

Performance 4

10%

9%

8%

7%

Performance 3

6%

5.5%

5%

4.5%

Performance 2

4%

3.5%

3%

2.5%

Performance 1

2%

1%

1%

0%

Please note this is a sample of a non-aggressive matrix.  More aggressive matrixes would look more like this and encourages a competitive workplace with significant turnover at average performance levels.

 

Salary Quartile 1

Salary Quartile 2

Salary Quartile 3

Salary Quartile 4

Performance 4

20%

18%

16%

14%

Performance 3

12%

10%

8%

6%

Performance 2

4%

2%

0%

0%

Performance 1

0%

0%

0%

0%

At our company, we decided to discuss and review all of our employees as a leadership group in order to ensure we all used the same criteria for rating performance.  This assures that the “easy going” managers don’t give 4’s to members of their staff for doing an average job while the “tough” managers give their staff members 2’s. Assuming you have a staff that is mostly hard working and high performance, what you should end up with is a fairly even distribution across the 2-4 ratings range, with just a handful of 1’s (up to around 10%).

When it was all said and done, this method ended up being better received by our staff, because it utilized the same logic for everyone and ensured that everyone’s salary/raise was related to their actual job performance, rather than an arbitrary increase that was the same for high achievers as it was for slackers. 

From an efficiency point of view, performance matrix cuts down on the debates and discussions in comparison to those surrounding arbitrary raises, and it allows the reviews to be done faster.  On the financial side, it allows decision-makers to anticipate increases in salaries for the year and create a budget that accommodates such.  It can also be changed from non-aggressive to aggressive, or vice versa, to match your own company’s corporate culture.

Performance reviews used to be a time of high anxiety and angst-ridden debate for us, but with our performance matrix in place, it’s much smoother sailing here at Pink Visual where performance reviews are concerned. If you find yourself frustrated with your own company’s review process, or feel that you’ve lost control of that aspect of your business, I highly recommend giving this approach a shot to restore some sanity in your conference room when review time rolls around again.

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