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I set up a business five years ago with three friends and it's gone from strength to strength. We now have 30 employees. However, I'm aware that while we pay ourselves very well, we pay our staff peanuts by comparison. Is it wrong for me to feel a little guilty about this? Should we share the profits a little more?

Anyone who is working for your organisation should feel valued, and I've always taken the approach that I pay well for a job done well. There is always a market rate for any job and as an employer you have a responsibility to know what the range for that job is. There's usually a spread from the low end of the spectrum to the higher end, and personally I like to reward people towards the upper end if they are doing a good job.

As long as a person is being paid well for the contribution they are making, then you should not feel guilty. Make sure you or your HR department keep an eye on the salaries that jobs are being advertised at so you are in tune with the market rates. You can even ask a recruitment agency to carry out a survey of pay rates and reward schemes or your trade association might have carried one out.

There is a big difference between working for an organisation and setting up an organisation — and actually taking all the risks that go with it. It's very easy when you get further down the line, when the company is doing well, to forget that part of your reward is because in the early stages you took the financial risks and worked harder and longer. You shouldn't feel guilty provided you are content that you are paying well and people are being rewarded for the job that they are doing. My whole philosophy in life is that if someone does a good job, you should reward them well. Money isn't everything but the pay has to match the words. If you say, "I value you," then the pay should reflect that. 

If a particular project is a success, then it's important that people understand the part they have played in that success. There might be 100 people involved and the input of 90 of them gets forgotten, while the one person at the top says, "Haven't I done well?" Performance related bonuses can be very useful, because if people do a good job, they get a bonus and if they do a poor job, they don't. You've got to be prepared to say, "I'm sorry, I'm not paying a bonus if the job isn't any good."

Deborah Meaden is author of Common Sense Rules (Random House, £7.99). Read more advice from Deborah Meaden.

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