Abstract

Cooperative Employee Compensation

Beverly L. Rotan

Agricultural Cooperative Service

U.S. Department of Agriculture

This study looks at how education, cooperative function, and geography

influence patterns in compensating cooperative employees. Generally, cooperative respondents in the West reported employees had the highest median

salaries.

Job responsibility, decisionmaking, and performance were the three most

important factors for setting salaries according to respondents in a survey conducted for this study. Bonuses were given across job categories. Bonuses were

tied to a variety of factors but most reported were financial performance, sales,

and performance. Health, life, and disability insurance were the most commonly

paid benefits across all geographic areas, all sizes (sales) of cooperatives, and

all cooperative function.

Keywords: Salaries, compensations, benefits, cooperative.

ACS Research Report No. 114

March 1993
Preface

This study was conducted after receiving many requests from cooperatives

for information on cooperative employee compensation. It is anticipated that this

information will be used as a general guide for newly organized cooperatives

and as a source of comparison for established cooperatives.

The report takes a comprehensive look at salaries and fringe benefits that

cooperatives offer to their mid- to upper-level employees. Data for this report

were obtained in 1991 from a random sample of 400 cooperatives with sales of

at least $1.8 million. Cooperatives included in the sample were marketing and

farm supply cooperatives, as classified by Agricultural Cooperative Service’s

Statistics and Technical Services Staff.

Thirty percent of the active cooperatives in the sample responded to the

survey. As in any questionnaire, some questions were not answered or were

only partly answered. Therefore, this information may not adequately address

all of the unique requirements, skills, or risks associated with a given position or

cooperative.
Contents

Highlights ....................................................................................................... iii

General Survey Background .......................................................................... 1

General Survey Results ................................................................................. 2

Overall Results ............................................................................................... 2

Education ............................................................................................... 2

Compensation ........................................................................................ 2

Benefits .................................................................................................. 8

Cooperative Type ........................................................................................... 9

Salary, by Cooperative Type .................................................................. 9

Bonuses and Basis, by Cooperative Type.. ......................................... 12

Financing Benefits, by Cooperative Type ............................................ 12

Other Benefits Offered, by Cooperative Type ...................................... 15

Regional Differences.. .................................................................................. 15

Education ............................................................................................. 15

Regional Salary.. .................................................................................. 15

Regional Salary Ranking ..................................................................... 17

Region and Bonuses............................................................................ 17

How Benefits Are Paid ......................................................................... 17

Other Benefits, by Region .................................................................... 20

Differences in Employee Factors, by Sales Range.. .................................... 20

Educational Differences, by Sales Range ........................................... 24

Salary and Sales Range ...................................................................... 24

Ranking Factors for Salary, by Sales Range ....................................... 24

Bonuses and Their Basis, by Sales Range ......................................... 28

Relationship Between Sales and How ted .......................................... 28

Other Benefits and Sales ..................................................................... 30

Changes.. ..................................................................................................... 32

Summary ...................................................................................................... 32

Appendix ...................................................................................................... 34

Definitions ............................................................................................ 34

References ........................................................................................... 34

Sample questionnaire .......................................................................... 35

ii
Highlights

Employees are the lifeblood of any organization. One of the objectives of a

cooperative is to attract and keep competent and productive employees.

Although salaries, perquisites (perks), and benefits are not the only inducement

to employment, they play a big part.

Retirement; health, life, and disability insurance; bonuses (performance

based); and educational assistance were some of the benefits that cooperatives

offered their employees. These benefits were paid for by the cooperative, by the

employee, or shared by both. Perquisites or “perks” are benefits paid by cooperatives that increase employees’ compensation packages. Perks included

vacations, holidays, and sick days; use of company car; or payment for mileage

(private car) when doing cooperative business.

Some of the significant findings from this survey:

l The largest percentage of employees in specified job categories, with

the exception of sales representative, were college educated.

l Generally, cooperatives paid for all specified benefits or shared in the

cost of retirement benefits for their general managers, office managers, and

field representatives.

l Salaries of other firms in the area was the least important factor in setting salaries for cooperative employees.

l Forty-eight percent of division managers and sales representatives

received bonuses.

l Although fruit and vegetable cooperatives had sales that were the second highest compared to other cooperatives, the mean and median salaries of

their employees were higher than other cooperatives.

l More general and division managers in the Corn Belt, East/South

Central, and West had college degrees than those in other geographic areas.

l Generally, as sales volume increased, the median salaries increased for

all job categories.

l The basis for bonuses for general managers, office managers, and division managers throughout the United States was financial performance and

sales levels; while sales and sales growth were the primary factors for field and

sales representatives.

111
Cooperative Employee Compensation

Beverly L. Rotan

Economist, Cooperative Services Division

A major challenge for all cooperatives is

attracting and keeping productive people.

Cooperatives must offer employees compensation

commensurate with their experience and skills if

they are to meet this challenge. Compensation can

be both direct (e.g., salaries, wages) and indirect

(benefits). It is important to provide a proper mix

of direct and indirect compensations to attract and

keep competent employees. Competent employees

can enhance margins and membership savings for

cooperatives.

Although there are no universal norms to

guide the choice of what to pay any particular

employee, some internal and external factors

should be considered. Cost management (sales,

operating expenses); job responsibilities; employee’s educational background, experience and/or

skills; and the number of employees needed are

some of the internal factors that may influence

salaries and benefits for employees. External factors include Federal and State Government policies

and regulations, the labor market, and geographical location.

GENERALSURVEYBACKGROUND

Data for this report were obtained in 1991

from a random sample of 400 cooperatives with

sales of at least $1.8 million. Cooperatives included

in the sample were marketing and farm supply

cooperatives, as classified by Agricultural

Cooperative Service’s Statistics and Technical

Services Staff. There were 116 surveys returned or

30 percent of the active cooperatives in the sample.

Thirty-one percent of them were grain, 26 percent

farm supply, 19 percent fruit and vegetable, and 17

percent dairy cooperatives. The remaining 7 percent were “other” marketing cooperatives.

Questions regarding educational background,

salaries, benefits offered, principal products marketed or sold, sales, and any changes that occurred

in the past 5 years were included in the survey.

The results were grouped into four categories: 1)

general; 2) by function of cooperative; 3) by region;

and 4) by sales. There were five job categories in

this study. Because each cooperative may have different titles for jobs with the same duties, the categories follow with brief general descriptions.

1. The chief executive officer (CEO), president, or

general manager: execute policies established by the

board to achieve the cooperative’s objective.

2. The office manager, accountant, or con troller:

keep timely and accurate records of cooperative’s

financial standing and, in some cases, carry out

policies set forth by the CEO or cooperative board.

3. The division manager: carry out and support

policies and objectives, as they apply to their particular division.

4. The field representative: use expertise on how

best to cultivate land through soil testing and other

tools and recommend appropriate products and

innovative technological trends to improve farm

operations.

5. The sales representative: keep abreast of new

products on the market and meet with farmers to

take orders and inform them of new products.

Some sales representatives also make deliveries.
For purposes of this report, general manager

refers to CEO/president/general manager. Office

manager will indicate office manager/accountant/controller.

GENERALSURVEYRESULTS

This report looks at overall responses. They

are broken down by overall results, cooperative

function, region, and sales groupings. The breakdown by cooperative function is limited to salaries

and benefits for the five job categories.

OVERALL RESULTS

Education

The survey sought the educational level of

employees in each job category. Levels of education

included high school, some college, college graduate with bachelor, associate, master’s, or doctoral

degree.

Through all job categories, the trend for

employees to be college educated was similar

except for sales representatives. Twice as many

general managers had bachelor or associate

degrees compared with those who completed their

formal education in high school (table 1). Sixty percent of respondents (those with high school and

some college) indicated sales representatives had

not completed college. Respondents also reported

that the percentage of general and office managers

who completed college were more than twice the

percentage of those that completed high school. It

is interesting to note that 10 sales representatives

(17 percent) had doctoral degrees, while only 7 (8

percent) of the general managers had the advanced

degrees.

Compensation

Compensation for employees came in indirect

and direct forms. Indirect compensation included

benefits that ranged from paid vacations to educational assistance. Direct compensation included

most exclusively salary, wages, pay, and bonuses. It

should be noted that the questionnaire did not ask

respondents to differentiate between base salary

and additional bonuses. Some salaries probably

included bonuses.

Salary

Salaries are usually affected by longevity. For

this reason, some respondents reported a salary

range rather than the current salary for each of

their positions. When the salary range was given,

the average of the high and low was used to produce a single observation for aggregating the data.

Table i-Educational background of employees

Level of General

education manager

Off ice

manager

Division

manager

Field

representative

Sales

representative

Percent

High school 23 25 28 30 40

Some college 20 24 28 23 20

College graduate

Bachelor or Associate Degree 45 39 39 44 36

Master’s Degree 10 12 5 3 2

Doctoral Degree 2 0 0 0 2

2
In a few instances, it appears that respondents

reported salaries for part-time or seasonal employment. This distorted the data for reporting the lowest salaries in each job category; therefore, the lowest salaries are not included in table 2. Reporting

part-time employment makes the averages lower

than they would be otherwise. In this case, the

median or midpoint is a more reliable indicator of

what most cooperatives are paying employees

because unlike the average, it is not affected by

observations that might be clustered at one extreme

or the other. Table 2 includes the following descriptive statistics for salaries: high, median, mean or

average, and the number of observations above

and below the average or mean. The data are

skewed as indicated by this latter measure and by

the difference between the mean and the median.

In table 2, the means are larger than the medians

and more observations fell below the means

because of a few relatively high salaries.

As expected, the general manager had the

highest median salary. It is interesting to note that

the division manager’s median salary was higher

than the office manager’s salary. It is assumed that

respondents may have substituted division manager for assistant manager. The office manager, field

representative, and sales representative’s median

salaries were the same or close.

Salary Ranking

Respondents were asked to rank specific factors that contribute to setting salaries. Rankings

were from 1 to 6, with 1 being the most important.

Evidently, more explanation in the survey’s

instructions may have been needed because many

respondents used the 1 to 6 as a measure of importance for each factor separately, rather than indicate each factor’s order of importance. As a result,

two or more factors were often given the same

rank.

Also, some factors were assigned no rank, presumably because respondents considered these as

having no impact on salary determination. To provide comparable percentages, a mark of 7 was

given to each blank or unranked factor and added

to the priority ordering.

Job responsibilities, decisionmaking capabilities, performance, experience, education, and the

impact of other firms in the area were the ranking

factors. Table 3 reports the order of importance but

not the composite scores. Since some respondents

reported a 1 to 6 rating, rather than a priority

ordering from 1 to 6, an analysis of variance technique was used to obtain composite scores for each

factor’s importance. The survey had listed these

factors in the expected order of importance for

Table P-Summary of annual salary by employee category

Job category

General manager

Office manager

Division manager

Field representative

Sales representative

Salary range1

High Median Mean

__________________________________Dollars________________________________

300,000 45,000 62,904

114,024 28,000 36,715

127,500 33,500 41,371

74,200 25,000 28,401

108,120 25,000 30,915

Responses

above/below

mean

Number

30175

35170

31152

26142

12/39

lRespondents gave salary information for full- and part-time employees. Also, not every respondent answered for all job or salary ranges.

3
Figure l- Number of Respondents Reporting Salary-Setting Factors

General Manager 106 Respondents

Responsibility

Decisions

Performance

Experience

Education

Other firms

Office Manager 102 Respondents

Responsibility

Decisions

Performance

Experience

Education

Other firms

Division Manager 73 Respondents

Responsibility

Decisions

Performance

Experience

Education

Other firms

I

0

I

70

.I

2 0 3 0

Number

I

4 0 5 0 6 0

4
Figure 1 Continued- Number of Respondents Reporting Salary-Setting Factors

Field Representatives 63 Respondents

Responsibility

Decisions

Performance

Experience

Education

Other firms

Sales Representatives 52 Respondents

Responsibility

Decisions

Performance

Experience

Education

Other firms

0 70

Rank

20 30 40 50 60

Number

5
Table 3-Order of importance of factors for selected job categories

Factor General Office

manager manager

Division

manager

Field

representative

Sales

representative

Ranking

Job responsibility 1 1 1 1 2

Decisionmaking capabilities 2 3 3 3 3

Performance (co-oplemployee) 3 2 2 2 1

Experience 4 4 4 4 4

Education 5 5 5 5 6

Other firms in area 6 6 6 6 5

most jobs, and the results generally reflected this

pattern. Some bias seem to have occurred, but critical factor differences did show up. For example, job

responsibility was ranked 1 by a majority of

respondents for all job categories except sales representative. For the latter job, the third listed factor,

performance, is the most important.

This may reflect that it is more feasible to

monitor a sales representative by using sales performance, than using sales to measure a manager’s

performance. It is also interesting to find that decisionmaking capabilities were ranked third most

important for all job categories except general manager. Decisionmaking capability was a key factor

for general management, and respondents ranked

it just slightly less than job responsibility.

Figure 1 shows the basis for these composite

scores where, for instance, more respondents rated

a manager’s decisionmaking with a relatively high

2 and 3 than reported for job responsibility. What

other firms in the area are paying is regarded as the

least important factor in all job categories except

sales representative.

The survey also asked if performance was a

factor in setting salaries, how was performance

evaluated/measured, and by whom. Most respondents indicated that the cooperative’s financial and

6

employee’s job performance were the basis for

evaluating most employees. Table 4 shows some

variations of these basic measurements, including

preferred personality traits. The frequency of cooperatives that reported use of these measures are

also listed in table 4.

Several methods of evaluating performance

and their frequency are reported in table 4. Most

respondents indicated that predetermined goals

and objectives were used to evaluate performance.

Formal reviews, management by objectives, yearly

evaluation, department measures by reports, continued monitoring, mutual discussions, history,

and informal evaluations were other methods of

evaluating performance.

Bonuses

Bonuses are used to reward the outcome of

performance of the employee and can be viewed as

an added benefit and/or salary. Respondents were

asked if bonuses/commissions were given to

employees. In total, 40 percent of the respondents

reported that their cooperative gave bonuses in all

job categories. Division managers and sales representatives had the highest percentage of respon-
Table 4-Frequency of performance measurement

Measurement Frequency

Direct elements (115 respondents)

Financial performance ................................................................................................ .30

Job performance.. ....................................................................................................... .15

Sales (previous year). ................................................................................................... .6

Other firms/market pay ranges ..................................................................................... .5

Equity/rebate paid to members/returns to grower ........................................................ .4

Profit per department.. .................................................................................................. .4

Annual performance appraisals using job description.. ................................................ .4

Cooperative performance.. ........................................................................................... .3

Increase in volume ....................................................................................................... .2

Member feedback.. ....................................................................................................... .2

Cost effectiveness ........................................................................................................ .2

Innovation ..................................................................................................................... .2

Decisionmaking ............................................................................................................ .2

Keep within budget.. ..................................................................................................... .2

Financial strength ......................................................................................................... .2

Maintain status in the market through sales and cost containment.. ............................ .2

Other’ .......................................................................................................................... 16

Personality traits (52 respondents)

Attitude toward customers, members, co-workers, growers.. ..................................... .10

Knowledge and being able to communicate knowledge.. ............................................. .4

Neatness ...................................................................................................................... .4

Accuracy.. ..................................................................................................................... .4

Dependability.. .............................................................................................................. .2

Timeliness .................................................................................................................... .2

Ambition ......................................................................................................................... 2

Ability to follow instruction ............................................................................................ .2

Common sense ............................................................................................................ .2

Other2 .......................................................................................................................... 10

Method (31 respondents)

Preagreed goals and objectives ................................................................................. .l 1

Formal review.. ............................................................................................................. .4

Management by objectives.. ......................................................................................... .3

Yearly evaluation .......................................................................................................... .3

Department measures by reports.. ............................................................................... .2

Other3 ............................................................................................................................ 4

‘The 16 miscellaneous responses included volume handled, sales increase, productivity, number of units sold, operation smoothness, staffing

quality, service, market share, etc.

ZTen responses included knowledge of sources, honesty, effectiveness, efficiency, attendance, willing to give little extra, etc.

3Four responses included mutual discussion, history, continued monitoring, and informal evaluation.

7
Figure 2- Bonuses Given Across Specified Job Categories

General Manager

Office Manager

Division Manager

Field Representative

Sales Representative

0 5 70 1 5 2 0 2 5 3 0 3 5 4 0 4 5

Percent

5 0

dents who were given bonuses, both with 48 percent (figure 2).

The basis for receiving bonuses included

financial performance factors (margins, net earnings, income, savings), gross volume/sales, percentage of top quality product, performance, new

procurement, units sold, sales growth, and other.

Some respondents indicated that bonuses were

paid but they did not indicate the basis and were

placed in the “other” category.

Table 5 shows, in some instances, that job category revealed the reason a bonus was given.

General managers, office managers, division managers, and field representatives were more likely to

be given bonuses based on financial performance

factors. Sales representatives were more likely to be

given bonuses based on gross volume or sales.

New procurements were the third most important

basis for giving bonuses to field representatives.

Benefits

Benefits such as retirement; health, life, and

disability insurance; and educational assistance can

be paid for by the cooperative, the employee, or

both parties. It is assumed that educational assistance may range from paid seminars to college

courses. Most benefits across all job categories were

either paid by the cooperative or shared by both.

Seventy-one to 73 percent of respondents indicated

that disability insurance for general managers,

office managers, division managers, and field representatives was paid by the cooperative (table 6).

When asked what formula was used for retirement/pension plans, most respondents (24) reported “no formula.” The next largest number (22)

reported that the cooperative paid all retirement

plan costs under a defined program (table 7). Five

cooperatives paid all retirement plan costs under a

conditional program. When the cooperative and

employees shared the cost of retirement benefits, a

variety of formulas was used. These formulas

included: “cooperative matches,” “cooperative

pays percentage,” “profit sharing (percentage of

net profit/wages),” and “cooperative pays 0.7 percent and employee pays 1 percent of wages. These

were the most frequent “formulas” used for retirement benefits.

For other cooperatives, pension plans such as

the 40X plan were used. These were either paid
exclusively by employees or by both the cooperative and the employee.

Other Benefits

Other benefits were “perks” or extras that an

organization may offer to employees. Respondents

were asked if their cooperative offered paid vacations/holidays and sick days, use of company car,

social club membership, health club membership,

first-class travel, and mileage (private car).

Responses indicated that paid vacations/holidays,

sick days, mileage (private car), and use of company car were more widely made available to

employees across the five job categories (table 8).

The percentage ranged from 99 to 0. First-class

travel was high on the list for general managers,

with an ESpercent response rate. Few respondents

indicated cooperatives offered membership in

social and/or health clubs.

COOPERATIVE TYPE

Of 116 respondents, 31 percent were grain

cooperatives, 26 percent were farm supply cooperatives, 19 percent were fruit and vegetable cooperatives, and 17 percent were dairy cooperatives. The

rest (7 percent) were “other” marketing cooperatives.

Salary, by Cooperative Type

Table 9 shows high, median, average salaries,

and the number of observations above and below

the average or mean, by cooperative function. The

low end of the salary ranges is not reported

because there were instances of seasonal employment. In table 9, the mean is larger than the median

in each instance, and more observations fell below

the mean because of a few relatively high salaries.

Table S-Basis for bonuses for all job categories

Factor General Office

manager manager

Division

manager

Field

represantative

Sales

representative

Financial performance’ 66 65 63 33 25

Gross volume/sales 12 13 10 29 46

New procurement2 0 3 3 15 0

Percent (top quality) 2 0 2 4 0

Performance (cooperative/employee) 12 13 14 11 14

Sales growth 0 0 0 4 4

Units sold 0 0 2 0 4

Other3 8 6 6 4 7

Total

Percent

100 100 100 100

‘Margin, net earnings, income, profits, and savings.

*Varied responses such as agriculture’s national average prices paid to farmers, or no standard was given.

3Members recruited, new contracts, and grower signup.
Table g-Benefits offered employees and how paid

Job category and factors

Company Employee Both

paid paid paid

General manager

Retirement insurance

Health insurance

Life insurance

Disability insurance

Educational assistance

Office manager

Retirement insurance

Health insurance

Life insurance

Disability insurance

Educational assistance

Division manager

Retirement insurance

Health insurance

Life insurance

Disability insurance

Educational assistance

Field representative

Retirement insurance

Health insurance

Life insurance

Disability insurance

Educational assistance

Sales representative

Retirement insurance

Health insurance

Life insurance

Disability insurance

Educational assistance

47 7 46

56 3 41

58 14 28

71 12 17

59 10 3 1

47 8 45

55 1 44

61 14 25

71 13 16

61 9 30

51 2 47

58 0 42

64 7 29

73 9 17

60 4 36

47 6 47

53 2 45

59 13 27

72 16 12

59 7 34

51 6 43

57 0 43

63 12 25

65 16 19

70 0 30

Percent

Table 7-Frequency of formulas for contribution for

retirement

Measurement Frequency

None

Cooperative pays 100 percent (defined)

Cooperative pays 100 percent (conditional)

Service and/or salary

Cooperative pays 5 percent of savings

Cooperative/employee share

Cooperative matches

Cooperative pays a percentage

Cooperative 0.7%/employee 1% salary

Profit sharing (percent of net margins/salary)

Employee pays 1 %/cooperative rest

Cooperative 60%femployee 40%

Other’

401 k plan

Employee contribution only

Cooperative/employee share

$.50-$1 .OO cooperative/employee limited

maximum dollar amount or percentage

75% of first 6% of annual salary

Other2

2 4

2

2

6

‘Nineteen responses covered cooperative pays 5 percent of net

tocooperative matches up to 5 percent of gross salaries.

ZSix different responses ranged from profitability to cooperative

matches employee contribution.

Table 8-Percentage of sample that offered employees other benefits

Benefit

(Number in sample)

General Office Division

manager manager manager

(114) (104) 034)

Field Sales

repre representative sentative

(6% (53)

Percent

Paid vacations/holidays 96 97 99 99 98

Paid sick days 93 93 94 97 94

Use of cooperative car 61 2 1 48 59 48

Social club membership 17 5 8 2 8

Health club membership 2 2 0 0 0

First-class travel 88 5 9 5 4

Mileage (private car) 70 71 70 69 73

1 0
Table O-Summary of annual salary for employee category, by cooperative type

Job category and

cooperative function*

High

Salary range’

Median Mean

Responses

above/below

mean

Dairy

General manager

Off ice manager

Division manager

Field representative

Sales representative

Fruit and Vegetable

General manager

Office manager

Division manager

Field representative

Sales representative

Grain

General manager

Off ice manager

Division manager

Field representative

Sales representative

Farm Supply

General manager

Off ice manager

Division manager

Field representative

Sales representative

Other3

General manager

Off ice manager

Division manager

Field representative

Sales representative

_____ __________ _____ ___________ ____ Dollars ______________________________ Number

158,144 47,500 59,422 5/l 3

89,500 28,000 32,670 12l8

110,000 47,500 53,410 415

32,500 25,250 25,253 717

54.754 44.000 40.601 312

225,000 58,400 73,388 6/l 4

114,024 39,200 51,026 8/l 2

127,500 50,000 53,666 5/l 0

46,000 35,000 36,169 516

65.000 42,500 39.346 614

175,000 42,000 48,805 9127

98,750 26,000 28,264 13118

98,750 32,000 32,943 11/15

74,200 24,000 27,704 4115

30.000 23,250 22.995 919

163,000 42,000 50,419 812 1

80,000 22,250 29,473 8120

70,000 26,250 30,435 6/l 8

50,000 24,000 25,684 4/l 5

28,000 22,500 22,833 718

150,000 47,500 123,750 2l2

104,000 79,500 83,333 2/4

91,520 88,450 84,903 4/2

45,000 42,500 41,250 2l2

108,120 60,000 72,707 l/2

‘Respondents gave salary information for full- and part-time employees. Also, not every respondent answered for all job or salary ranges.

ZAs classified by Agricultural Cooperative Service’s Statistic and Technical Services Staff.

30ther includes marketing cooperatives with low responses.
Table 1 O-Percentage of respondents that give

bonuses to employees

Job categoriesl

Percent

given

Dairy (20 cooperatives)

General manager

Off ice manager

Division manager

Field representative

Sales representative

Fruit and Vegetable (22 cooperatives)

General mkager

Off ice manager

Division manager

Field representative

Sales representative

Grain (36 cooperatives)

General manager

Off ice manager

Division manager

Field representative

Sales representative

Farm Supply (22 cooperatives)

General manager

Office manager

Division manager

Field representative

Sales representative

Other (8 cooperatives)2

General manager

Office manager

Division manager

Field representative

Sales representative

29

12

44

36

50

37

40

38

33

45

42

36

45

58

54

34

37

54

43

53

43

43

43

20

29

‘Number of respondents varied by job category. According to the survey, a larger percentage of

ZMarketing cooperatives with low responses. respondents of dairy cooperatives reported that they

Consequently, the median is a more representative

measure of cooperative salaries.

The median and mean salaries for general

managers, office managers, division managers, and

field representatives in fruit and vegetable cooperatives were highest, ranging from $36,169 to $73,388

for the mean and from $35,000 to $58,400 for the

median salary. It is interesting to note that although

fruit and vegetable cooperatives had the second

highest sales, they had the highest median and

mean salaries. Statistically, the number of respondents reporting may have affected the averages.

There were many more respondents in farm supply

and grain cooperatives. Responses to salary information by the “other” marketing cooperatives were

small. Therefore, salary data for this group will not

be considered but are represented in the table for

format consistency.

Bonuses and Basis, by Cooperative Type

Although most respondent cooperatives did

not give bonuses, those that did generally gave to

all of the five job categories. However, distribution

of bonuses to job categories varied by type of cooperative. For example, more sales representatives

received bonuses than field representatives in all

types of cooperatives except grain cooperatives

(table 10). Dairy cooperatives were also distinctive

in that less than one-third of them gave bonuses to

general and office managers.

As a rule, bonuses were tied to the job functions. For example, sales representatives’ bonuses

were based more on sales. Financial and employee

performance and sales were the most commonly

indicated factors for basing bonuses for other job

categories. Generally, bonuses for all job categories

for dairy, fruit and vegetable, and grain cooperatives were evenly distributed and based on financial performance and /or performance and sales

(table 11). This trend was evident throughout the

report.

Financing Benefits, by Cooperative Type

12
Table 11-Basis for bonuses for employees

cooperative

function and

factor

General Office Division

manager manager manager

Field Sales

repre- representative sentative

1

0

1

1

1

0

2

1

2

0

13 7

0 1

0 0

0 0

0 0

0 1

10 9 14

2 2 2

0 0 2

0 0 1

0 0 0

1 1 0

1 1 1

1 1 1

1 1 1

Number of respondents

Dairy

Financial performance1

Gross volume/sales

Percent of top quality

Performance

New procurement2

Other3

Fruit and Vegetable

Financial performance’

Gross volume/sales

Performance

New procurement*

Grain

Financial performance’

Gross volume/sales

Performance

Units sold

Sales growth

Other3

Farm Supply

Financial performance’

Gross volume/sales

Performance

Units sold

Sales growth

Other3

Othep

Financial performance’

Performance

Other3

7

13

4

1

1

3

4 5

4 6

1 1

0 1

1 0

0 0

0 0

1 0

0 1

‘Margin, net earnings, income, profits, and savings.

*Members recruited, new contracts, and grower signup.

Waned responses such as agriculture’s national average prices paid to farmers, or no standard was given.

aMarketing cooperatives with low responses.

13
Table 12-Benefits offered and how paid, by cooperative function

Cooperative function

and job category

Retirement Health Life

insurance insurance insurance

C E S C E S C E S

Disability Educational

insurance assistance

C E S C E S’

Dairy

General manager 50 7 43

Office manager 47 13 40

Division manager 46 9 55

Field representative 39 15 46

Sales representative 50 13 37

Fruit and Vegetable

General manager 75 12 13

Off ice manager 72 14 14

Division manager 82 0 18

Field representative 78 0 22

Sales representative 75 12 13

Grain

General manager 40 3 57

Office manager 40 3 57

Division manager 46 0 54

Field representative 28 5 67

Sales representative 3 1 0 69

Farm Supply

General manager 32 7 61

Off ice manager 36 8 56

Division manager 35 9 56

Field representative 37 10 53

Sales representative 40 13 47

Other2

General manager 86 0 14

Off ice manager 86 0 14

Division manager 86 0 14

Field representative 80 0 20

Sales representative 100 0 0

‘C = cooperative; E = employee paid; and S = shared by both.

2Marketing cooperatives with low responses.

63 5 32 73 20 7 75 8 17 56 11 33

68 0 32 80 20 0 7715 8 67 11 22

54 0 46 73 9 18 67 11 22 56 11 33

57 0 43 75 17 8 70 10 20 71 0 29

50 0 50 75 12 13 63 12 25 67 0 33

48 9 43 59 18 23 67 13 20 33 17 50

47 5 48 57 14 29 72 721 27 18 55

57 0 43 64 0 36 82 0 18 25 0 75

60 0 40 53 0 37 88 0 12 33 0 67

70 0 30 83 0 17 83 0 17 33 0 67

71 0 29 53 9 38 75 12 13 76 12 12

63 0 37 48 11 41 68 21 11 79 7 14

72 0 28 67 4 29 7519 6 77 8 15

59 6 35 59 8 43 75 12 13 75 25 0

80 0 20 50 14 36 57 14 29 89 0 11

39 0 61 52 15 33 55 15 30 53 6 41

39 0 61 54 17 29 59 18 23 50 6 44

36 0 64 50 18 32 56 19 25 50 6 44

38 0 62 56 22 22 62 23 15 50 6 44

36 0 64 57 21 22 60 30 10 58 0 42

43 0 57 86 0 14 86 0 14 83 0 17

43 0 57 86 0 14 86 0 14 83 0 17

43 0 57 86 0 14 86 0 14 83 0 17

60 0 40 100 0 0 100 0 0 75 0 25

50 0 50 67 0 33 67 0 33 100 0 0

Percent

14
were more apt to pay for health, life, and disability

insurance, and educational assistance for specified

employees. Cooperatives paid retirement insurance

for general managers, office managers, and sales

representatives for most of the respondents. More

respondents indicated that division managers and

field representatives shared the cost of retirement

benefits in dairy cooperatives (table 12).

Respondents indicated more grain, farm supply, and “other” marketing cooperatives paid for

life and disability insurance and educational assistance for all employees in the survey. Educational

assistance in fruit and vegetable cooperatives was

also shared by the employee and the cooperative.

Retirement and health insurance were also shared

by more employees in farm supply cooperatives.

Other Benefits Offered, by Cooperative Type

Table 13 shows other benefits offered employees by cooperative function. It should be noted

here that the number of observations/responses is

included in the table and, in some cases, responses

were small.

One fifth or more respondents of dairy, grain,

farm supply, and “other” marketing cooperatives

offered paid vacations and sick days, along with

first-class travel, company car, and mileage reimbursement (private car) for general managers,

office managers, and in some cooperatives, division

managers and field representatives. Respondents

indicated few health and social club memberships

were offered by cooperatives.

REGIONAL DIFFERENCES

The United States was divided into five geographic regions-Corn Belt, Lake States, Northern

Plains, West (Pacific & Mountain regions), and

East/South Central (the Southeast, Northeast, &

South Central regions). These regions were

grouped in this manner to maintain anonymity

due to insufficient data and for statistical analysis.

In this section, results of questionnaires are presented by region (figure 3). Most respondents were

in the West and Lake States, 27 and 21 percent; followed by the East/South Central, 19 percent; Corn

Belt, 18 percent; and finally the Northern Plains, 15

percent.

Education

All regions, except the Lake States, had the

largest percentage of general managers with bachelor/associate and master’s degrees (50 to 69 percent, table 14). Thirty-six percent of respondents in

the Northern Plains and 32 percent of respondents

in the Lake States said the general managers were

high school graduates. The Lake States also had the

largest percentage of general managers who had

“some college” education. Office managers in the

East/South Central area had the highest percentage

(43 percent) of employees with a high school education. More than 50 percent of respondents indicated that division managers were college graduates with either a bachelor, associate, or master’s

degree in three regions-Corn Belt, 56 percent;

East/South Central, 55 percent; and the West, 52

percent.

Field representatives with college degrees

were highest in the Corn Belt, Northern Plains, and

West regions. The highest percentage of sales representatives with high school diplomas were found

in the East/South Central, Northern Plains, and

West regions. Most sales representatives with either

a bachelor or associate degree in the Corn Belt and

Lake States.

Regional Salary

Table 15 shows a breakdown of salary data for

the five geographic regions. The high, median, and

mean are reported for each category. The low

salary was not reported because some respondents

reported part-time salaries. It caused large spreads

between the high and low salaries. With this type

of data, the median is a more representative measure than the mean.

Regional differences are significant. The West

had the largest median salary in all job categories

with only two exceptions. The Corn Belt average

for general managers and the East/South Central

average for sales representatives are higher, at

15
Table 13-Other benefits offered and paid for by cooperative, by cooperative function

Cooperative function Paid Paid Cooperative Social Health 1st class Mileage

andjobcategory vacations sick days car club club travel (private car)

Dairy

General manager

Office manager

Division manager

Field representative

Sales representative

Total

Observations (number)

Fruit and Vegetable

General manager

Off ice manager

Division manager

Field representative

Sales representative

Total

Observations (number)

Grain

General manager

Office manager

Division manager

Field representative

Sales representative

Total

Observations (number)

Farm Supply

General manager

Office manager

Division manager

Field representative

Sales representative

Total

Observations (number)

Other 1

General manager

Office manager

Division manager

Field representative

Sales representative

Total

Observations (number)

25 24

25 24

17 17

22 23

-

11 -

12

100 100

64 58

30 30

24 24

20 20

13 14

-13 -12

100 100

70 66

28

23

21

15

13

100

126

27

23

20

16

-14

100

122

25 25

23 23

21 21

17 17

-

14 -

14

100 100

120 120

25

25

25

16

-

9

100

32

25

25

25

16

9

loo

32

31

6

24

24

-

15

100

33

0

0

0

0

0

0

0

34

16

18

21

-11

100

38

57

14

29

0

0

100

7

34 50

10 17

21 17

21 8

14 8

loo loo

62 12

38

5

21

19

17

loo

42

26

22

22

17

-13

100

23

100

0

0

0

-

0

100

1

50

20

10

0

20

loo

10

Percent

0

0

0

0

-

0

0

0

0

0

0

0

-

0

0

0

100

0

0

0

-

0

100

1

100

0

0

0

-

0

100

1

50

50

0

0

-

0

100

2

38 20

25 32

25 17

12 20

-

0 -11

100 0

8 35

75 25

0 26

25 19

0 14

-0 -

16

100 100

4 57

36 30

18 21

18 20

18 14

-

10 -15

100 100

11 94

100

0

0

0

-

0

100

1

24

27

21

16

12

loo

42

25

25

25

0

-

25

100

4

25

25

25

17

8

loo

12

1 Marketing cooperativeswithlow responses.

16
Figure 3- Regional Breakdown

$52,500 and $44,000, than the respective medians in

the West, at $42,000 and $44,000.

Regional Salary Ranking

Geographic regions did not exhibit a significant difference in the way respondents ranked the

factors-job responsibility, decisionmaking, performance, experience, education, and the impact of

other firms in the area. Subsequently, no analysis

was done.

Region and Bonuses

Three regions-the Corn Belt, Lake States, and

West-had responses of 40 percent or more in three

of the five job categories (table 16). Four of the

regions reported a relatively high percentage, giving bonuses to sales representatives, while the

Northern Plains reported the lowest percentage for

this category over all job categories. Table 17 shows

the distribution bases for determining bonuses for

each job category by region. Respondents by region

indicated that general, office, and division managers’ basis for bonuses were on financial performance factors. More respondents in the Corn Belt

and Northern Plains based bonuses for sales representatives on sales.

How Benefits Are Paid

Benefits are paid either by the cooperative,

employees, or shared by both (table 18). Most

respondents indicated that retirement, health, life,

17
Table 14-Highest educational background of specified job categories, by region

Region

Job category and educational level Corn Lake Northern

Belt States Plains West

East/South

Central

General manager

High school

Some college

College graduate

Bachelor or Associate Degree

Master’s Degree

Doctoral Degree

Total

Office manager

High school

Some college

College graduate

Bachelor or Associate Degree

Master’s Degree

Doctoral Degree

Total

Division manager

High school

Some college

College graduate

Bachelor or Associate Degree

Master’s Degree

Doctoral Degree

Total

Field representative

High school

Some college

College graduate

Bachelor or Associate Degree

Master’s Degree

Doctoral Degree

Total

Sales representative

High school

Some college

College graduate

Bachelor or Associate Degree

Master’s Degree

Doctoral Degree

Total

14 32 36 25 10

14 40 14 12 19

54

14

-

4

100

28 20 3 1 23 43

22 40 31 10 22

44

6

0

100

33 33 30 2 1 28

11 41 40 27 17

50

6

0

100

31 40 0 25 46

6 30 50 15 27

63

0

0

100

29 36

21 9

43

0

7

100

28 36

0 14

0 0

loo loo

50

13

-

0

100

57

10

4

100

32 38 44 26

8 0 23 9

0 0 0 0

loo loo loo loo

26 20 45 50

0 10 7 5

0 0 0 0

loo loo loo loo

30 38 55 27

0 12 5 0

0 0 0 0

100 100 loo loo

50

20

20

10

0

loo

45 56

25 33

55

0

0

loo

30

0

0

loo

11

0

0

loo

Percent
Table 1 !+Annual salary range for specified employees, by region

Job category

Region and salary range’ General Office

manager manager

Division

manager

Field representativeSales representative

Dollars

Corn Belt

High 175,000 98,750 98,750

Median 52,500 30,000 33,500

Mean 67,739 37,543 42,850

responses (#) 19 19 15

Northern Plains

High

Median

Mean

responses (#)

92,652 54,368 54,285 33,000 65,000

43,500 20,500 25,000 24,000 22,500

44,178 24,111 29,003 24,833 26,360

16 15 11 9 11

Lake States

High 163,000 79,000 75,000

Median 42,000 24,417 27,250

Mean 53,099 53,238 32,049

responses (#I) 23 23 18

74,200 30,000

25,250 24,500

29,951 25,342

14 12

45,000 60,000

23,500 22,000

26,184 27,000

16 9

West

High 300,000 114,024 127,500 45,000 51,300

Median 48,000 37,200 50,000 33,000 28,300

Mean 79,397 48,706 49,389 32,178 33,880

responses (#) 26 28 24 19 12

East/South Central

High 100,000 80,000 110,000 50,000 108,120

Median 42,000 24,565 36,300 24,000 44,000

Mean 63,233 34,838 47,652 25,768 47,803

responses (#) 2 1 20 15 10 7

‘Respondents gave salary information for both full- and part-time employees. Also, not every respondent answered for all job classifications or

salary range (high, low, actual). In some cases, no salary information was given.

1 9
Table 16-Percentage of cooperatives that gave

bonuses, by region

Region, job category, and Percent of

number in sample’ cooperatives

Corn Belt (21)

General manager

Off ice manager

Division manager

Field representative

Sales representative

Lake States (24)

General manager

Off ice manager

Division manager

Field representative

Sales representative

Northern Plains (17)

General manager

Off ice manager

Division manager

Field representative

Sales representative

West (32)

General manager

Office manager

Division manager

Field representative

Sales representative

East/South Central (22)

General manager

Off ice manager

Division manager

Field representative

Sales representative

42

35

57

46

64

29

32

67

53

64

27

29

29

3 1

21

47

46

55

40

50

27

30

25

50

56

‘Number of respondents varied in each job category

and disability insurance for general managers,

office managers, and division managers were paid

by the cooperative in the Corn Belt and West

regions. For all job categories, more respondents in

all regions reported that educational assistance was

paid by the cooperative.

Finally, the cost of some benefits was shared

by both the employee and the cooperative. The

East/South Central was the only region where

health insurance for general managers, office managers, and division managers was shared by both

the cooperative and the employee. Retirement benefits in the Lake States and Northern Plains were

shared by cooperatives and employees in all job

categories except general managers in the Lake

States.

Other Benefits

Other benefits or “perks” were paid primarily

by the cooperative. Of the cooperatives that offered

perks, table 19 shows those benefits most offered.

The largest percentage of respondents in all regions

reported offering all employees paid

vacations/holidays and sick days. Mileage (private

car) or use of the company car was the next largest

percentage, i.e., most common benefit given by

respondents throughout all regions and for all job

categories. Social and health club memberships and

first-class travel were uncommon benefits in all

regions.

DIFFERENCES IN EMPLOYEE FACTORS,

BY SALES RANGE

Many of the previously reported employment

factors for the 116 respondent cooperatives can be

grouped and compared by sales range categories.

Out of the 116 cooperative respondents, 115 gave

sales information. Of these, 16 cooperatives were in

the smallest sales range, $1.8-2.8 million; 41 cooperatives were in the $2.9-8.8 million sales range; 33

cooperatives were in the $8.9-98.8 million sales

range; and 25 cooperatives were in the $99 million

or more sales range. Differences in the size of cooperatives, as measured by sales, have an affect on

employment factors.

20
Table I’/-Basis for bonuses for specified employees, by region

Job category and basis Corn Belt Lake States Northern Plains west East/South Central

General manager

Financial performance’

Gross volume/sales

Percent of top quality

Performance (co-op/employee)

Other2

Total

Office manager

Financial performance’

Gross volume/sales

Performance (co-op/employee)

Other2

Total

Division manager

Financial performance’

Gross volume/sales

Percent of top quality

Performance (co-op/employee)

New procurement3

Units sold

Other2

Total

Field representative

Financial performance’

Gross volume/sales

Percent of top quality

Performance (co-op/employee)

New procurement3

Units sold

Other2

Total

Sales representative

Financial performance1

Gross volume/sales

Performance (co-op/employee)

Units sold

Other2

Total

67

1 3

0

0

0

100

6 6

1 4

0

0

100

6 0

2 0

0

0

0

0

0

100

3 3

3 3

1 7

0

0

0

1 7

100

2 5 4 5 3 3 0 0

6 2 3 3 5 0 5 0 3 4

0 11 1 7 5 0 3 4

0 11 0 0 0

1 3 0 0 0 3 2

loo 100 100 loo 100

3 7

3 6

9

9

-

9

100

80 6 3 7 2

0 1 2 0

0 0 0

2 0 2 5 1 4

0 0 1 4

100 100 100

6 3 100 56 6 6

2 5 0 1 4 0

1 2 0 2 8 1 7

0 0 0 1 7

100 loo 100 loo

5 7

7

7

1 5

7

7

0

100

100

0

0

0

0

0

0

loo

5 7

1 4

0

2 9

0

0

0

loo

5 7

0

0

2 9

0

0

1 4

100

2 3

3 3

0

2 2

2 2

0

__

0

100

2 5 6 0 3 4

5 0 2 0 3 3

0 0 0

2 5 0 3 3

0 2 0 0

0 0 0

0 0 0

100 100 100

Percent

‘Margin, net earnings, income, profits, and savings.

*Varied responses such as agriculture’s national average prices paid to fanners or no standard was given.

3Members recruited, new contracts, and grower signup.

21
Table 1 &-Percentage of benefits paid for by cooperative and/or employee, by region

Northern East/South

Corn Belt LakeStates Plains west Central

Jobcategoryand

benefit C E S C E S C E S C E S C E S'

General manager

Retirement insurance

Health insurance

Life insurance

Disability insurance

Educatibnal assistance

Office manager

Retirement insurance

Health insurance

Life insurance

Disability insurance

Educational assistance

Division manager

Retirement insurance

Health insurance

Life insurance

Disability insurance

Educational assistance

Field representative

Retirement insurance

Health insurance

Life insurance

Disability insurance

Educational assistance

Sales representative

Retirement insurance

Health insurance

Life insurance

Disability insurance

Educational assistance

55 5 40 45 15 40 19 6 75 60 4 36 50 0 50

58 0 42 63 4 33 71 0 29 56 6 38 32 0 68

53 la 29 71 19 10 53 12 35 57 la 25 53 0 47

79 21 0 al 19 0 75 0 25 70 13 17 53 0 47

57 7 36 46 27 27 71 0 29 55 10 35 78 0 22

50 10 40 38 19 43 23 0 77 61 4 35 57 0 43

56 0 44 55 5 40 57 0 43 59 0 41 39 0 61

47 24 29 78 17 5 50 21 29 63 13 24 63 0 37

71 29 0 75 19 6 57 14 29 77 9 14 63 0 37

57 7 36 50 30 20 67 0 33 61 6 33 78 0 22

60 0 40 41 12 47 27 0 73 60 0 40 57 0 43

57 0 43 58 0 42 73 0 27 68 0 32 31 0 69

50 21 29 76 6 la 73 0 27 65 10 25 53 0 47

70 30 0 86 7 7 80 0 20 a0 10 lo 53 0 47

54 a 38 56 11 33 60 0 40 56 0 44 78 0 22

53 7 40 33 13 54 22 0 78 65 0 35 50 12 38

46 0 54 50 0 50 56 0 44 63 0 37 44 12 44

38 31 31 71 7 21 63 0 37 67 13 20 56 11 33

60 40 0 a4 a a 67 0 33 74 13 13 67 11 22

59 a 33 63 12 25 67 0 33 62 0 38 40 20 40

46 0 54 50 25 25 la 9 73 69 0 31 a3 0 17

50 0 50 38 0 63 70 0 30 64 0 36 57 0 43

58 17 25 74 13 13 50 10 40 66 17 17 67 0 33

50 38 12 86 14 0 50 0 50 66 17 17 67 0 33

73 0 27 60 0 40 67 0 33 64 0 36 75 0 25

Percent

‘C = paid by cooperative; E = paid by employee; and S = shared by both.

22
Table 19-Percentage of other benefits offered employees and paid by cooperative, by region

Job category and benefit Corn Belt Lake States Northern Plains West EastLSouthCentral

General manager

Paid vacations/holidays

Paid sick days

Use of company car

Social club membership

Health club membership

First-class travel

Mileage (private car)

Number of responses

Office manager

Paid vacations/holidays

Paid sick days

Use of company car

Social club membership

Health club membership

First-class travel

Mileage (private car)

Number of responses

Division manager

Paid vacations/holidays

Paid sick days

Use of company car

Social club membership

Health club membership

First-class travel

Mileage (private car)

Number of responses

Field representative

Paid vacations/holidays

Paid sick days

Use of company car

Social club membership

Health club membership

First-class travel

Mileage (private car)

Number of responses

Sales representative

Paid vacations/holidays

Paid sick days

Use of company car

Social club membership

Health club membership

First-class travel

Mileage (private car)

Number of responses

100 100 94 97 90

100 100 88 91 86

50 52 59 71 67

18 9 18 21 21

0 5 0 3 0

13 9 13 11 16

76 77 71 66 63

#18 #23 #16 #27 #18

100 96 94 96 95

100 96 88 96 89

11 23 59 31 25

0 5 18 4 13

0 0 0 4 0

6 0 13 0 13

88 14 71 71 72

#18 #23 #16 #27 #18

100 100 90 100 100

100 100 80 96 88

50 39 30 63 50

0 6 10 10 14

0 0 0 0 0

17 6 10 5 14

73 74 60 78 56

#14 #20 #9 #24 #16

100 100 100 95 100

100 100 100 100 80

69 53 44 68 50

0 0 11 0 0

0 0 0 0 0

9 6 13 0 0

73 63 67 58 60

#13 #18 #9 #18 #lO

100 100 91 100 100

100 100 91 92 86

58 50 36 43 57

0 10 18 0 17

0 0 0 0 0

9 0 0 0 17

82 50 64 93 57

#12 #lO #lO #13 #7

Percent

23
Educational Differences, by Sales Range

Cooperatives were grouped in four sales

ranges in order to compare differences in employees’ education levels. In most cases, there is a pattern of cooperatives with larger sales having

employees with higher educational attainment.

Cooperatives with sales volume in the lowest

range, $1.8-2.8 million, had the largest percentage

of office managers, division managers, and field

representatives who ended their formal education

at the high school level (table 20). However, 69 percent of general managers in the lowest sales range

had bachelor, associate, or higher degrees, while in

the next sales range, $2.9-8.8 million, only 39 percent of general managers had bachelor degrees or

higher. The pattern of cooperative size and employee education is also contradicted by the second

lowest sales range, with 80 percent completing formal education in high school, while the lowest

sales range had 67 percent in that category.

However, cooperatives in the second sales range

category had the highest percentage, but not the

most, of field representatives with bachelor or associa te degrees (table 20).

In the $8.9-98.8 million sales range, roughly

half of the employees in all job categories had

either some college or bachelor/associate degrees.

In the more than $99 million sales range, all other

job categories, except sales representatives, had a

substantial majority with bachelor or associate

degrees. Of a total of 18 doctoral degrees, the highest sales range had 13 and the next highest sales

range had the remainder of 5.

Salary and Sales Range

Salaries tend to be higher on average for cooperatives with higher sales ranges. There are a few

exceptions between the lowest and the next highest

range with regard to mean salaries but less so with

regard to median salaries. This may have occurred

because there were 62 responses in the $1.8-2.8 million sales range as compared to 115 responses in

the $2.9-8.8 million sales range. In some cases,

respondents had more than one employee in a

specified job category.

The mean and median are the key summary

statistics reported (table 21) to provide measures of

distribution. Salaries for general managers tend to

differ significantly between large and small cooperatives, whereas salaries for more narrowly focused

jobs are more similar regardless of the size of an

organization’s total sales.

Ranking Factors for Salary, by Sales

Table 22 shows the ordering factors that

respondents indicated were most important in setting salaries by sales range. Some of the factors

received the same rank. As a result, two or more

factors were often given the same rank, for example, three l’s and three 6’s. Another example, while

sales representatives in the $1.8-2.8 million sales

range had a majority of respondents ranking job

responsibility and decisionmaking capabilities as 1,

experience for general and division managers also

was ranked as 1. Again, more explanation in the

survey’s instructions may have been needed

because many respondents used the 1 to 6 as a

measure of importance for each factor separately,

rather than indicate each factor’s order of importance.

Another explanation may be needed. It is

assumed that there are no division managers in the

smaller cooperatives (those with sales from $1.8 to

$2.8 million). Therefore, it is also assumed that

respondents may have substituted assistant managers for division managers in this sales size.

Also, some factors were assigned no rank, presumably because respondents considered these as

having no impact on salary determination. To provide comparable percentages, a mark of 7 was

added to the priority ordering and given to each

blank or unranked factor.

In the other sales ranges and for all job categories, respondents ranked job responsibility, decisionmaking, and performance either 1,2, or 3. In

most instances when setting salaries, other firms in

area and education were the least important factor,

with a rank of 5 or 6. The exceptions were in the

$1.8-$2.8 million sales range for division managers,

field representatives, and sales representatives. In

contrast, respondents in these job categories felt

24
Table 20-Educational background of specified employee, by sales range

Sales, educational

level (number in each

sales range)

General Office Division

manager manager manager

Field Sales

repre- representative sentative

Observations (number)

$1.8-2.8 million

(16 cooperatives)

High school

Some college

College graduate

Bachelor or Associate Degree

Master’s Degree

Doctoral Degree

Observations (number)

$2.9-8.8 million

(41 cooperatives)

High school

Some college

College graduate

Bachelor or Associate Degree

Master’s Degree

Doctoral Degree

Observations (number)’

$8.9-98.8 million

(33 cooperatives)

High school

Some college

College graduate

Bachelor or Associate Degree

Master’s Degree

Doctoral Degree

Observations (number)’

Over $99 million

(25 cooperatives)

High school

Some college

College graduate

Bachelor or Associate Degree

Master’s Degree

Doctoral Degree

16 16 14 8 9

12 38 43 63 67

19 3 1 36 25 22

65 31 21

4 0 0

0 0 0

13

0

0

11

0

0

39 34 24 15 5

38 38 42 27 80

23 35 38 13 0

36 24 21 53 20

3 3 0 7 0

0 0 0 0 0

3 1 29 34 26 21

26 28 26 27 24

23 21 32 27 24

39

13

0

41

10

0

42 43

4 5

0 5

25 27

0

8

29

12

0

31

10

13

74

3

0

25 19

24 42

24 21

64

20

8

0

7

59

33

0

52 32

0 0

0 5

Percent

‘In some cases, the number of observations were more than number of cooperatives in specified sales range because there were more than

one employee in that job category.

25
Table 21-Annual salary for specified employees, by sales

Sales range and job category

Mean

Salary range’

Median High

Responses

above/below

mean

Dollars

$1.8-2.8 million

General manager 43,241 30,000 63,000 2l12

Off ice manager 21,682 19,250 69,000 5/l 1

Division manager 21,000 21,000 52,500 516

Field representative 23,492 20,974 35,000 315

Sales representative 24,651 21,000 27,500 2l5

$2.9-8.8 million

General manager

Off ice manager

Division manager

Field representative

Sales representative

37,290 37,500 61,800 20119

23,012 22,029 42,500 14120

25,867 25,000 52,000 7114

23,204 24,000 33,000 8l7

21,900 21,000 27,500 515

$8.9-98.8 million

General manager

Off ice manager

Division manager

Field representative

Sales representative

60,966 52,500 155,000 10121

33,608 30,000 79,000 12/18

36,889 33,950 75,000 8118

26,899 24,500 45,000 8/l 6

31,389 25,000 65,000 5/l 4

Over $99 million

General manager

Off ice manager

Division manager

Field representative

Sales representative

128,305 120,000 300,000 9112

68,121 71,400 114,024 13112

67,379 64,000 127,500 11114

36,129 35,000 74,200 8/l 4

41,123 30,000 108,120 718

‘Respondents gave salary information for both full- and part-time employees. Also, not every respondent answered for all job classifications or

salary range (high, low, actual). In some cases, no salary information was given.

26
Table 22-Percentage of ranked factors used for setting salaries for specified employees, by side

Factors General Off ice Division

sales range manager manager manager

Field

representative

Sales

representative

Rank

$1.8-2.8 million

Responsibility 3 1 3 2 1

Decisionmaking 4 3 2 1 1

Performance 2 2 4 3 3

Experience 1 4 1 3 2

Education 6 6 5 5 4

Other firms 5 5 2 3 2

$2.9-8.8 million

Responsibility 1 1 1 1 2

Decisionmaking 2 3 3 2 3

Performance 3 2 2 1 1

Experience 4 4 4 3 4

Education 5 5 5 4 5

Other firms 6 6 6 5 6

$8.9-98.8 million

Responsibility 2 1 1 1 2

Decisionmaking 1 3 3 3 3

Performance 3 2 2 2 1

Experience 4 4 4 4 2

Education 5 5 6 6 5

Other firms 6 6 5 5 4

Over $99 million

Responsibility

Decisionmaking

Performance

Experience

Education

Other firms

2 1 1 1 2

3 3 2 2 4

1 2 1 1 1

4 4 3 4 3

5 5 5 5 6

6 6 4 3 5

27
other firms in the area was a key factor for setting

salaries. Table 23-Percentage of specified employees

receiving bonuses, by sales ranges

Bonuses and Their Basis, by Sales Range Job category and Percent receiving

salary range’ bonuses

Respondents with sales in the $8.9-98.8 million and $99 million or more ranges reported the

largest percentages of bonuses given, 50 and 51

percent, respectively. Respondents with sales of

$2.9-8.8 million had the lowest percentage that

gave bonuses. Respondents in the $1.8-2.8 million

sales range reported a relatively high percentage

for field representatives, sales representatives, and

division managers (table 23).

Table 24 shows what factors determined

bonuses. In the first sales level, more respondents

reported financial performance as the basis for

bonuses for employees in all job categories.

In the next sales category, $2.9-8.8 million,

financial performance as the basis for bonuses for

general managers, office managers, and division

managers again had the largest number of respondents. For field representatives, bonuses were

based equally on financial performance, sales, and

sales growth. Bonuses that were given to sales representatives based on sales and units sold were

equally important.

Again in the $8.9-98.8 million and the $99 million or more sales level, the financial performance

was most important to general, office, and division

managers. More cooperative respondents with

sales of $8.9-98.8 million reported gross sales/volume was the basis for bonuses for field representatives while respondents in the $99 million or more

sales range reported that bonuses were based on

financial performance, new procurement, and sales

equally. Respondents indicated that sales representatives in the last two sales levels gave bonuses

based on gross volume/sales.

Relationship Between Sales

and How Financed

$1.8-2.8 million

(16 cooperatives)

General manager

Office manager

Division manager

Field representative

Sales representative

All categories

$2.9-8.8 million

(41 cooperatives)

General manager

Office manager

Division manager

Field representative

Sales representative

All categories

$8.9-98.8 million

(33 cooperatives)

General manager

Off ice manager

Division manager

Field representative

Sales representative

All categories

Over $99 million

(25 cooperatives)

General manager

Off ice manager

Division manager

Field representative

Sales representative

All categories

20

36

45

56

56

40

27

17

38

21

17

25

46

42

57

44

64

50

52

48

50

47

60

51

‘Number of respondents varied in each job category.

Cooperatives in all sales ranges paid for life

and disability insurance for employees in the five

job categories (table 25). Payment of health insurance and/or retirement insurance was more likely

28
Table 24-Frequency of basis for bonuses for specified employees, by sales ranges

Sales and bonus General

factor manager

Off ice

manager

Division

manager

Field

represantative

Sales

representative

$1.8-2.8 million

Financial performance’

Gross sales/volume

Performance (coop./employee)

New procurement2

Others

$2.9-8.8 million

Financial petformancel

Gross sales/volume

Percent of top quality

Performance (coop./employee)

Units sold

Sales growth

$8.9-98.8 million

Financial performance’

Gross sales/volume

Percent of top quality

Performance (coop./employee)

New procurement*

Other3

Over $99 million

Financial performance’

Gross volume/sales

Percent of top quality

Performance (coop./employee)

New procurement2

Other3

10

3

0

2

0

0

Number

‘Margins, net earnings, income, profits, and/or savings,

*Number of farmers recruited, grower sign up, and/or new contracts procured.

3Varied responses such as agriculture’s national average prices paid to farmers, or no standard was given.

29
Table 25-Percentage of benefits paid for by cooperative and/or employee, by sales ranges

Sales and benefits

Field Sales

General Office Division repre- repremanager manager manager sentative sentative

C E S C E S C E S C E S C E S’

$1.8-2.8 million

Retirement insurance

Health insurance

Life insurance

Disability insurance

Educational assistance

$2.9-8.8 million

Retirement insurance

Health insurance

Life insurance

Disability insurance

Educational assistance

$8.9-98.8 million

Retirement insurance

Health insurance

Life insurance

Disability insurance

Educational assistance

Over $99 million

Retirement insurance

Health insurance

Life insurance

Disability insurance

Educational assistance

33 9 58 36 9 55 38 12 50 38 12 50 43 14 43

47 6 47 47 0 53 55 0 45 33 0 67 29 0 71

50 36 14 62 31 8 78 22 0 71 29 0 57 43 0

78 11 11 80 10 10 86 14 0 80 20 0 66 17 17

63 0 37 63 0 37 50 0 50 60 40 0 50 0 50

30 13 57 27 23 50 38 6 56 25 25 50 22 11 67

62 5 33 59 3 38 68 0 32 57 7 36 60 0 40

47 19 34 48 26 26 61 6 33 44 27 27 38 12 50

58 15 27 57 24 19 64 7 29 56 33 11 60 20 20

47 29 24 46 31 23 50 10 40 45 22 33 57 0 43

53 4 43 54 0 46 52 0 48 46 0 54 55 5 40

63 0 37 63 0 37 67 0 33 67 0 33 74 0 26

76 10 14 79 11 11 72 12 16 68 14 18 78 11 11

80 15 5 77 14 9 76 14 10 79 16 5 69 23 8

71 0 29 79 0 21 71 0 29 82 0 18 82 0 18

69 0 31 65 0 35 64 0 36 65 0 35 67 0 33

44 56 0 40 0 60 40 0 60 42 0 58 47 0 53

56 0 44 52 0 48 52 0 48 53 0 47 60 0 40

77 5 18 73 4 23 73 4 23 71 5 24 62 7 31

59 5 36 59 5 36 59 5 36 50 6 44 50 6 44

Percent

‘C = paid by cooperative; E = paid by employee; and S = shared by both.

shared by employees and cooperatives in the lower

two sales ranges, while in the next two higher sales

ranges these benefits were paid for by the cooperative. There was an exception. Office managers,

division managers, field representatives, and sales

representatives in the $99 million or more sales

range shared payment of health insurance benefits

with the cooperative. The percentage range of benefits paid by cooperatives was from 43 percent to

86 percent. Retirement was the benefit most often

shared by both the cooperative and the employee

in the first two sales levels for general managers,

office managers, and division managers.

Other Benefits and Sales

Most respondents indicated that other benefits-paid vacations and sick days, and mileage of

private car-were offered to employees by cooperatives in every sales range (table 26). Ten out of 23

cooperatives in the over $99 million sales range

offered social club membership.

30
Table 26-Frequency of specified employees receiving other benefits, by sales’

Benefits and General Office Division

sales range manager manager manager

Field

repre

sentative

Sales

representative

$1.8-2.8 million

(16 cooperatives)

Paid vacation/holidays

Paid sick days

Use of cooperative car

Social club membership

Health club membership

First-class travel

Mileage (private car)

$2.9-8.8 million

(41 cooperatives)

Paid vacation/holidays

Paid sick days

Use of cooperative car

Social club membership

Health club membership

First-class travel

Mileage (private car)

$8.9-98.8 million

(33 cooperatives)

Paid vacation/holidays

Paid sick days

Use of cooperative car

Social club membership

Health club membership

First-class travel

Mileage (private car)

16 16 10

16 16 10

9 2 5

1 0 0

1 0 0

11 0 0

11 11 8

39

35

17

2

0

2

30

30 30 27 25 19

29 27 25 23 19

21 5 13 13 19

5 2 2 1 19

0 1 0 0 0

4 2 2 2 0

18 19 17 14 18

31

30

2

1

0

0

22

Number

22

19

5

1

0

1

13

15

15

7

0

0

0

11

11

11

11

11

11

10

11

Over $99 million

(25 cooperatives)

Paid vacation/holidays

Paid sick days

Use of cooperative car

Social club membership

Health club membership

First-class travel

Mileage (private car)

25 24 24 19 14

25 24 24 19 14

2 1 12 17 16 15

10 2 3 0 15

1 1 0 0 0

5 3 4 1 15

14 20 17 13 15

‘Number of responses varied in each job category.

31
CHANGES

The most substantial change in the last 5

years, according to respondents, was increased

salaries. Salaries were increased to keep up with

inflation (table 27). Although, survey results indicated that “other firms in the area” had little to do

with influencing a cooperative in setting salaries, in

some instances it is likely that changes in some

benefits were made to keep up with other firms in

the area.

Other changes were in the form of additions

or changes in the benefits being offered to employees. There were a number of additions made in the

last 5 years of which the 401k retirement plan was

the mostsignificant. Respondents also indicated

that cafeteria plan, merit pay, and disability insurance were important additions to their benefits.

Others were health insurance, personal leave, and

profit-sharing pension plans.

The most important change was a greater

share of health insurance premiums paid by

employees. Higher contribution to 401k, performance and training based more on accountability,

and upgraded pension benefit were the next most

frequently reported changes.

SUMMARY

There are no set guidelines for cooperatives to

set salaries and benefits. They should be sufficient

to attract the type of workers that the cooperative

needs and should provide incentives for quality

performance.

There are certain factors any business must

consider. These factors may be the result of external

influences, Federal and State government policies

and regulations, competitive background and geographical locations or internal factors, the educational background of employee, skill, physical ability (required by job), and experience. of the

employee.

Job evaluation is one of the tools available for

developing equitable pay structures. Job evaluations may be developed through several methodsranking, classification, factor comparison, and

Table 27-Cooperatives reporting changes in

salary and benefit package in last 5 years

Change Frequency

Number of responses’

Changes

Inflation/cost of living

Change in share of health premium

Health insurance coverage decreased

Cooperative pays l/2 deductible

Increased for employees’ share of health

package

Performance and training more based on

accountability

Upgraded pension benefit

Higher contribution to 401 k

Be more competitive with “like” companies

For job performance

Freeze on salary

Other2

Added

401 k plan

Cafeteria plan (section 125)

Merit pay

Disability insurance

Retirement plan (3 yrs service)

Profit-sharing pension plan

Personal leave days

Health insurance and paid vacation

Dental under health

Executive bonus plan

Deferred compensation program

Health care rebate program

Medical plan/health insurance

Increase in sick leave

Other3

2

2

2

2

2

2

2

13

13

6

4

4

3

3

3

2

2

2

2

2

2

2

‘Some respondents gave more than one response.

*Thirteen different responses included life insurance made optional,

cumulative sick days, self dental funding, etc.

‘Nine responses included bonus program, HMO, incentive pay

emphasis, additional holidays, etc.

32
point. Each of these methods have advantages and

disadvantages.

Benefit plans must also be evaluated. Benefit

planners should consider employee needs and

expectations, cost escalation, tax considerations,

benefit quality, and actions of competitors. There

are other questions that the cooperative must

answer. What benefits should be offered and how

will they be ted? What conditions must be met

before an employee is eligible for benefits? These

questions can be answered through interviews of

employees, monitoring benefit activities of other

businesses in the area, government agencies, and

reading various benefit publications.

“Perks” were offered to most employees. Paid

vacations, holidays and sick days, use of company

car, and mileage reimbursement (private car) were

more widely made available to employees in all job

categories. Membership in social and health clubs

was not so widely available to employees of cooperatives.

According to respondents, employees had

some college education or a college degree.

Cooperative sales further defined the educational

background of selected employees. In the largest

sales level, more than $99 million, all selected

employees with the exception of sales representatives were college graduates with a bachelor or

associate degree.

Performance, job responsibility, and decisionmaking capabilities were the most important

salary-setting elements. Throughout all job categories, generally education and other firms in the

area were the least important factor in setting

salaries. The methods for evaluating performance

varied. The largest percentage of the respondents

indicated that preagreed goals and objectives were

used. Less than half of the respondents reported

that bonuses were given to employees based on

financial performance factors such as margins, net

earnings, income, savings.

There were minor regional differences in benefits, ranking factors for setting salaries, “perks,”

and educational levels of cooperatives. Salary was

highest in the West region in all job categories,

except for field representatives in the Corn Belt,

and sales representatives in the East/South

Central, Northern Plains, and Lake States. Most

bonuses were based on financial performance factors in all regions and job categories with the

exception of general managers in the Lake States,

field representatives in all regions except the

Northern Plains, and sales representatives in all

regions.

Most respondents indicated that retirement

plans for general, office, and division managers

and field representatives in the West were paid by

their cooperative.

As cooperative sales volume increased, so did

salaries of job categories except for general managers in the smallest sales level.

Cooperative leaders must look at internal and

external influences when setting salaries and benefits and use all available resources such as job evaluations, Government agencies, other firms in the

area, and employee interviews in developing an

equitable salary structure and maintaining a balance between needs of the employee and the cooperative. Finally, cooperatives must be ready to

adapt their salaries and benefits to remain competitive.

33
APPENDIX References

Definitions

Cafeteria Plan-Is the official term used in Section

125 of the Internal Revenue Code which describes a

flexible benefits program between taxable and nontaxable benefits that the Federal Government recognizes. It is an individual combination of benefits

to each employee, rather than a standard program

that covers all employees the same way.

Perquisites (“perks”)-Additional benefits

designed not only to increase size of a compensation package, but also to compensate for the stresses and strains of employment. These benefits are

paid by organization.

Section 40Zk (cash or deferred)-The Internal

Revenue Code that permits employees to choose

between currently taxable cash compensation and

not currently taxable contributions to certain qualified plans. Therefore, an employee can elect

whether their employer will make contributions on

their behalf to a qualified profit-sharing plan

(including thrift plan), or a qualified stock bonus

plan, or the pre-Employment Retirement Income

Security Act (ERISA) money purchase pension

plan; or instead pay the amount to the employees

as cash compensation, without having contributions elected to be made to the qualified plan considered as currently taxable income to the employees under the constructive receipt doctrine.

DeCenzo, David A. and Stephen I? Robbins.

Personnel/Human Resource Management.

Prentice Hall. Englewood Cliffs, NJ 07632.

1983.

Foster, Jr., Ronald M. The Manager’s Guide to

Employee Benefits. Facts on File Publications,

New York, NY. Oxford, England. 1986.

Henneman, Herbert G., Donald I? Schwab, John A

Fossum, and Lee D. Dyer. Personnel/Human

Resource Management, Richard D. Irwin, Inc.,

Homewood, IL 60430.1983

Rosenbloom, Jerry S. and G. Victor Hallman.

Employee Benefit Planning. Prentice-Hall,

Englewood Cliffs, NJ 07632. Second Edition.

1986.

Wald, Robert M. “Compensation at Cooperatives.”

The Cooperative Accountant, Vol. XLII,

Number 4, Winter, pp. 16,17, and 18.1989.

34
Sample Questionnaire

DEFINITIONS OF JOB CATEGORIES:

CHIEF EXECUTIVE OFFICER AND OWNER/PRESIDENT/GENERAL MANAGER - The decisionmaking

element of the cooperative-role is toformulate, execute policies, and to obtain cooperative’s objective.

ACCOUNTANT/CONTROLLER/OFFICE MANAGER -- Role is to keep timely and accurate records of cooperative’s

financial standing.

DIVISION MANAGERS -- Carry out and support policies, objectives of the cooperative and the Chief Executive

Oficer/President/General Manager.

FIELD REPRESENTATIVE/CONSULTANT -- Uses expertise on how best to cultivate land through soil testing and

other tools, and recommends appropriate products and innovative technological trends to improve farm operations.

SALES REPRESENTATIVE -- Keeps abreast of new product on market. Meets withfarmers to take orders and inform

farmers of new products. Some sales representatives also make deliveries.

1. How was employee found and

ultimately hired? (Through

media, advertisement

reference, word of mouth etc.)

2. How many employees do you

employ?

3. What is educational

background? Use following

codes for: High School = HS,

GED; Some College = SC (no

degree); College = ES (2 yrs

or 4 yrs); MS; PhD

4. If specific salary

information is confidential or

if there is more than one

employee in job category please

use high or low salary

Example: General Manager

$15,000 (low)

$25,000 (high)

What is present annual salary for

each job category?

Chief Executive

#ficer/President/

General

Manager

Accountant/

Controller/

Office

Manager

Division

Managers

Field

Lepresentativel

Consultant

Sales

Representative
5. How is salary derived?

Circle the factors--

rate in order of importance,

1 to 6, with 1 being most

important, 6 being least

important.

Job responsibilities

Decision making capabilities

Performance (see question no. 13)

Experience

Education

Other agribusiness firms

in area (competitive

6. Does your cooperative give

commissions?

If yes, what are the

bonuses and commissions

based on ? (if no, go to question 7)

7. How are the following

benefits/perks paid? Enter

c - company

e - employee pays

s - if shared by both

Retirement’

Health insurance

Life insurance

Disability insurance

Profit-sharing

Stock options

Educational assistance

8. Are the following

benefits/perks offered?

(Circle (Y-Yes) and (N-No)

Paid vacations/holidays

Paid sick leave

Use of company car

Social club memberships

Health club memberships

First class travel

Mileage (private car)

Chief Executive Accountant/

Xficer/President/ Controller/

General Office

Manager Manager

123456 123456 123456 123456 123456

123456 123456 123456 123456 123456

123456 123456 123456 123456 123456

123456 123456 123456 123456 123456

123456 123456 123456 123456 123456

123456 123456 123456 123456 123456

(

I

(

I

(

Y

Y

Y

Y

Y

Y

Y

1

;

!

;

N

N

N

N

N

N

N

Y N

Y N

Y N

Y N

Y N

Y N

Y N

Division

Managers

( 1

I i

( )

I 1

( )

Y N

Y N

Y N

Y N

Y N

Y N

Y N

Field Sales

Lepresentative, RepresenConsultant tative

(

I

I

I

Y

Y

Y

Y

Y

Y

Y

!

;

i

N

N

N

N

N

N

N

Y N

Y N

Y N

Y N

Y N

Y N

Y N

’ If your organization has any written policies on pension/retirement plans/formulas, bonuses/commission, or related compensation/benefit packages you may wish

to send a copy of policies.
9. If retirement/pension is shared by employee and cooperative, what is formula for contribution? Example:

Cooperative matches employee’s contribution or cooperative pays 75 percent into retirement/pension plans,

cooperative pays percentage according to salary, years of service, etc.

10. What changes, if any, have occurred in your organization’s salary and benefit package in the LAST 5 years?

Please give a brief description.

11.

12.

13.

What is principal product sold or marketed?

What were your total sales for 1990?

If performance is a factor in question 5, how is it evaluated or measured by the board of directors and how does the

CEO, in turn, evaluate performance of key staff members?

Contact Person (Optional)

NAME PHONE
U.S. Department of Agriculture

Agricultural Cooperative Service

P.O. Box 96576

Washington, D.C. 20090-6576

Agricultural Cooperative Service (ACS) provides research, management, and

educational assistance to cooperatives to strengthen the economic position of

farmers and other rural residents. It works directly with cooperative leaders and

Federal and State agencies to improve organization, leadership, and operation

of cooperatives and to give guidance to further development.

The agency (1 ) helps farmers and other rural residents develop cooperatives to

obtain supplies and services at lower cost and to get better prices for products

they sell; (2) advises rural residents on developing existing resources through

cooperative action to enhance rural living; (3) helps cooperatives improve

services and operating efficiency; (4) informs members, directors, employees,

and the public on how cooperatives work and benefit their members and their

communities; and (5) encourages international cooperative programs.

ACS publishes research and educational materials and issues Farmer

Cooperatives magazine. All programs and activities are conducted on a

nondiscriminatory basis, without regard to race, creed, color, sex, age, marital

status, handicap, or national origin.