Engage Employees Part 5: Pay fairly and engage employees
May 31, 2018
I wrote: Pay More and Disengage Pay More and Disengage Employees
. sometime back. Does this mean we should pay less or we should not pay more? NO,
please consider the following:
1. Pay Enough:
Dan Pink says that while money or monetary rewards did not result in engagement or in high performance, businesses should pay enough to get the pay discussion off the table and help people to focus on performance.
2. Pay More and Engage:
One of the largest companies in social media pays the highest salary in the industry. The employees are highly engaged. However, they do not want people to join them for money. They want people to join them for freedom to innovate, empowerment and freedom to perform. They take care of their employees by providing best of the facilities at work, to the extent that the employees do not miss their homes.
3. Pay as Per Promise:
Organizations need to set expectations and pay as per promise. If the organization does not keep its promise it will surely disengage its employees.
4. Pay Fairly:
Organizations must ensure fairness in compensation both internally and externally. Within the organization compensation should be fairly paid based on performance of an individual and her contribution to organization’s success. Both the performance management and the compensation management should be as transparent as possible. If we have a robust performance management system driven by business, it would be easy to be fair and transparent. In the absence of organizational transparency grapevine takes over.
In a socially connected world, the compensation should be benchmarked with companies from where the organization hires talent and with the companies to whom it loses talent. This should also be transparent to the extent possible. Transparency will ensure that people understand the fact that they are paid well and in line with the organizational promise, which will minimize the impact of misguidance by social network.
5. Take Recourse to Total Rewards: The software company that paid less and retained and engaged employees in the example above, ensured that they took good care of their employees and avoided retrenching them during down turn. That is not to say that the non performers were not asked to leave, after giving them a fair chance to change. The total perceived rewards, therefore, were higher than those due to higher salary paid by competitors.
Therefore, pay enough, pay fairly and migrate to total rewards. And yes, fulfil your promise. This will ensure that you do not disengage employees.