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Saturday, 07 September 2013 00:00

Your super-cool office and free snacks are nice, but money still talks loudest

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When it comes to keeping great employees, compensation is still the most important motivator.

Recently I read a couple of articles on Inc.com by Jeff Haden:  "8 Things Your Employees Need Most" and "4 Rewards That Are More Powerful Than Money".

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In them, Jeff talksabout how employees are motivated by things like 'freedom', 'mission' and 'rewards' than they are about straightforward compensation packages (i.e. salary and benefits).  He even says "Employees don't want to work for a paycheck; they want to work with and for people."

It's true that not everyone is motivated by the same things, and everyone likes to feel respected and valued in their workplace.  But the reality is that day-to-day intangibles like being asked for input or being recognized for a job well done are short-term motivators that only go so far.  Over the longer term, as your employees look to achieve things in other areas of their lives - taking vacations, buying homes, having children - money starts to assume more importance.

If people really preferred 'people' over 'paycheck', they'd be doing volunteer work instead of spending time in productivity analysis meetings.

The internet is filled with opinions.  The facts are often held within organizations.

Most large organizations, especially ones with turnover and attrition challenges, conduct 'exit interviews'.  When employees leave, they meet wtih someone from HR and discuss their experiences with the organization and their reasons for leaving.

These exit interviews aren't anonymous, so employees - especially the A-list ones, who know better than to burn their bridges - are circumspect.  When they're asked about why they're leaving, they talk about neutral, inoffensive things like "I was offered a terrific opportunity to grow my skills" or "I've always wanted tow ork in a startup environment" or even "The new job means I don't have to spend as much time communting".

However, when you ask recently-departed employees why they really left, and do it anonymously, they paint a very different picture:  The majority say that they left because they wanted to make more money (or a larger compensation package).  But this information is never made public, because what company wants to admit that 90% of their people leave simply to make more money?

(Now, it's worth noting that the second most common reason that top performers leave a job is that they could no longer stand an overbearing or incompetent manager - but this is a distant second to compensation.)

I definitely agree that the intangibles - consistent feedback, rewards and recognition, employee engagement, asking for input and ideas - all contribute to a positive work environment, and a positive work environment promotes productivity, builds the employment brand, and can compensate for things like an inconvenient office location or a high-stress industry.  But in the long-term, below-average compensation will cost you your top performers.

 

 

 

 

Read 6569 times Last modified on Sunday, 08 September 2013 03:56

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