The 85 percent solution

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It's a few years back, when this IT consultant pilot fish is working in the aerospace and defense industry at a company with an interesting idea for paying employees.

"They decided to pay 85 percent of the average market rate to hire, giving them room to give people increases to meet market and even exceed it for special people," says fish.

"That sounds like a good idea, but they based their numbers on surveys of companies in the same industry. That might be appropriate for RF engineers -- who design radios for satellites or ground stations -- or even for computer scientists who write satellite flight dynamics control software.

"Because there are not many companies that build satellites, there is not much competition for those specialists, and a move would probably include a relocation.

"But it doesn't work for IT generalists -- the folks who write business applications. There are many companies that run accounts payable.

"This company tried to pay its business application staff as if their employment prospects were limited -- as was the case for the folks working on the satellites -- when it was not. As a result, they tended to attract people at the lower end.

"On the flip side, they brought in a lot of consultants!"

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