To give each role on your farm a pay band and a rule for raises, write three things on one sheet of paper. First, the lowest and the highest you will pay for each role: that range is the role’s pay band, with a floor at the bottom and a ceiling at the top. Second, the criterion for a raise: one condition, answered yes or no, that moves a person up from the floor toward the ceiling, and how much each step up is worth. Third, the date each year when you sit down and review the bands.
With that sheet written, a raise follows a rule you set in advance instead of a fresh argument with each worker.
On many farms, each person’s pay was agreed on the day they were hired, and nothing about it was written down after that. Two people doing the same work can take home different money only because they started in different years, and that is not a reason you can give either of them. Raises tend to go to whoever threatens to leave, and the one who never threatens can go years without one. Nobody on the farm can say what they would have to do to earn more. The amounts may be fine. What is missing is a written rule for setting them.
Why does pay with no written rule cost you?
Because a wide gap in pay can cost you results, most of all when nobody can see the reason for it. The evidence comes from soccer, not farming: a 2014 study of two seasons of the Italian league, published in the journal PLoS ONE, found that teams with a wide gap between their highest and lowest pay tended to do worse, or in the authors’ words, high pay dispersion has a detrimental impact on team performance.
A pay gap by itself is not the problem. The authors cite earlier studies in which a gap pushes the lower paid to work harder for a higher salary, particularly when the pay dispersion is viewed as legitimate, that is, when people accept the reason for it.
Why a band, and not a single number for the role?
Because two people can do the same role at very different levels: a milker in their first month, and one who can run the milking alone. A single number would pay one of them too much or the other too little. So you decide first what the role pays, and then place each person inside that range.
Some countries already set farm pay by level in law. In Australia, farm wages are set by an award, the legal pay schedule for an industry, and the Pastoral Award 2020 sets a separate minimum weekly rate for each of its eight farm and livestock hand levels. So a hand who milks and fences under direction has a different legal minimum than one running the dairy without supervision. If you farm in Australia, those rates are your legal minimums; anywhere else, do not copy them.
The band on your farm is simpler than an award: a floor and a ceiling for each role. The floor is the least you would pay anyone you are willing to put in that role, including somebody new. The ceiling is the most you would pay before the person is really doing a bigger role, such as foreman instead of tractor driver. A new hire sits near the floor and an experienced hand higher up.
If you have an org chart, the bigger role is the next box up; if you do not, a written list of the roles on the farm is enough. What a person must learn before moving into that bigger role is a separate question, answered in a written career path. You do not need one to write the bands, because the band is only about pay.
What criterion moves a person up inside the band?
One criterion, chosen by you, written so the answer is yes or no, and posted where the person can read it. The easiest ones to check are time in the role, skill at the work and added responsibility. Choose one of them, not a mix, so that you and the worker can both tell at the review whether it was met.
Farm Commons is a nonprofit that writes plain legal guidance for farmers. It gives the order for choosing: decide first what you want from a worker over the long run, and then design criteria to support that goal. If what you want most is somebody who stays through the hard seasons, pick time in the role. If it is somebody whose work you no longer have to check, pick skill.
Pick something the person can do something about, not your impression of their attitude. “Works hard” is not a criterion, because you and your foreman could judge the same worker differently. “Runs the milking without supervision” is a criterion, because it is either true or it is not.
Next to the criterion, write how much pay goes up each time a person meets it, as a fixed amount you choose now. Time in the role can be met again every year. For skill or responsibility, write a short list of what earns each step, such as running the milking alone first and then the calf rearing. Nobody moves past the ceiling: past that point, the next step is the bigger role.
| Criterion | How to write it so the answer is yes or no | What the raise pays for |
|---|---|---|
| Added responsibility | Took charge of the crew, or of a task nobody was in charge of before | More of the work on this person’s shoulders |
| Skill or license | Holds the license the job requires; runs the machine without supervision | Work you no longer have to check |
| Time in the role | Has worked a full year in the role, harvest or calving included | A person who stayed and can be relied on |
| “Works hard” (fails) | Cannot be written that way: two people would judge it differently | Nothing the person can aim at |
Posting the criterion where everyone can read it is not the same as posting what each person earns. Zoë B. Cullen, an economist at Harvard Business School, reviewed research on this from other workplaces, not farms, in a 2023 working paper: where co-workers can see each other’s exact pay, a raise for one leads the others to ask for the same, which brings back the bargaining one worker at a time that the bands are meant to end.
Seeing the ladder instead, meaning how much the next level pays and what it takes to get there, can lead to more accurate and more optimistic beliefs about earnings potential, increasing employee motivation and productivity.
So the bands and the criterion go up where the crew can read them, on the wall of the shop or in the employee handbook. The exact amount each person earns today stays between you and that person. The reason for any gap is still in plain sight: who holds which role, and who has met the criterion. If only one person holds a role, anyone who reads the posted band can work out roughly what that person earns, and that is fine; the exact figure is what stays private. The same habit, writing the rule before any single case comes up, also works for recognizing good work without money and for the terms of a bonus.
What should you not expect from the bands?
Writing the bands does not promise anyone a raise, and it does not make your payroll smaller. It can even make it bigger: you may find somebody earning less than the floor you just wrote, and the honest move is to raise that person to the floor.
The bands are not a reason to cut anyone’s pay either. If somebody already earns more than the ceiling, look at why: the role may have grown and the ceiling needs to go up, or the person may already be doing the bigger role. Do not lower anyone’s pay because of the band without asking a labor lawyer first.
The band is also not a judgment of the person. Somebody can sit near the floor because they are new, not because they are bad at the work, and it helps to say so plainly to the crew when you post the bands. In the band you write about the role, never about the person in it, just as you do in a written list of what each role is responsible for.
The floor is not yours to set freely. The legal minimum wage, and in many places a union or industry agreement, set the lowest amount any band can start at. How pay is taxed and what goes in the employment contract are questions for your accountant and a labor lawyer.
Why set a yearly review date?
So that pay does not slide back into being settled one argument at a time. Penn State Extension, the farm advisory service of Pennsylvania State University, advises that a written job description be reviewed at least once per year by both employee and supervisor. A pay band goes out of date the same way, as the work in a role changes, so the same yearly date fits it.
Do the review with your workers, not alone. Sit down with each person, go over what their role involves now and whether they met the criterion, and hear their side. Then you decide the raises by the written criterion. A person who met it moves up the amount you wrote, because that is the rule, not because they asked in the right week. A person who did not can be shown, on the same sheet, what is still missing.
At the review, also check whether every floor is still above the legal minimum and whether each ceiling still fits what the role has become. Paying by a written rule, reviewed on a fixed date, is part of running the farm on decisions you can explain to the people they affect. More on hiring, reviewing and paying the people who work for you is in the people section of the library.
Where to start
One afternoon for the first draft, using the pay you already hand out, and no software.