Studio owners often make a critical error in determining how to pay their faculty -- they pick an hourly rate and think that it is all a teacher needs to stay happy.

Paying a teacher at a regular, standard, hourly rate never works in the long term unless it is just a substitute teacher or casual teacher. For instance, if you just pay a teacher $25 an hour, or if you are in a more metropolitan area say $40 an hour, the teacher is going to start to see that as the studio owner you are taking in $200 or $300 for that hour and they're only getting a fraction of that money. It's not going to take long for them to be discontent.

If your goal is to inspire loyal faculty you should consider implementing the pay grade formula.

Here are things to determine when you implement the PAY GRADE FORMULA:

#1 EXPERIENCE = Pay Grade

The most important piece of the pay grade formula is to take into consideration a faculty member's professional background and experience. It's only fair that a seasoned professional make more than a student you've had for 15 years you've hired to be a new teacher.

#2 PER-STUDENT COMMISSION= Number of students in class

Think about what will motivate your teachers. If their pay depends on how many students are in their class, they will work extra hard to make their classes' fun and interesting so they have a good student retention rate.

Paying on a per-student commission is a strong motivator. The only real way to determine the best teachers is by how much the students want to take their classes. With this system, the best teachers are paid more; even new teachers will get extra money if they're doing an awesome job. Not only that, but it's fair for all the teachers--you aren't taking in twenty times the amount they are getting paid for that class.

#3 TIME ON DANCE FLOOR = Length of Class

The longer a teacher is on the dance floor, the more he or she should be paid. This part of the system is where the good old hourly rate comes in. For instance one faculty member may teach a class that is only 45 minutes and another that is 90 minutes -- it is important to take this into consideration. But it's only part of it, and that's what makes this system so great.

So What IS the pay grade formula? You can find out in this article. And if this all sounds complicated-- don't worry! You can listen to Kathy Blake explain this form of profit sharing salaries that has worked for years at her studio by clicking here. Even easier, download all eight pay scale grades she uses to determine how to pay her teachers to make implementing this motivation technique easier than you ever imagined!