Perhaps everyone has heard the story of the three bricklayers. When one was asked what he was doing, he said “laying bricks.” The second answered the same question with a different reply “building a wall.” The third had her turn, and she responded, “I am building a cathedral.” (Lola, 2012) We all know which of those three we would prefer to have on our staff, but the questions remains. How can compensation and performance management attract and retain top talent?
Many business leaders concur that people who will come to work for money will leave for money. It’s not that those people love their bosses less; it may be that they love money more. At least we can keep saying that to ourselves if it makes us feel better. If we follow the same logic, could similar conclusions be drawn about people who come to work for other things? Do people come to work for growth potential, working conditions, or perhaps, even, location and commute times? Would they also leave for an improved scenario elsewhere?
Most everyone would would like to make more money if they could, but increasing pay and benefits to employees to keep them - buying loyalty - can only be a great plan if it is sustainable for the budget. Buying loyalty is only good for mercenary-type productivity and creativity. Mercenaries didn’t work in the battle at Carthage, and most only see it work for a season in the workplace. Also keep in mind, in Carthage, the mercenaries not only failed, but rebelled against Carthage when the money ran out. (McKerrow, 2014)
Conversely, paying less-than-market rates could turn a business into a training farm for the competition, while incurring extreme recruiting and training costs in the process. The bottom line is people want to be paid correctly, and the perception of correct will vary from person to person. What is correct? Unless you have a money-printing machine or are part of a monopoly, paying at market rate within a specified period of time is the most sustainable business model.
Managing From “Have To” To “Want To”
Many use incentives and bonuses to give their company an edge in pay and performance. Others prefer to focus on pay only. Some may simply lack the tools required to accurately measure their compensation philosophy and how it pairs with their business culture. In any case, people change, and their motivation changes as well. If employees feel like they “have to” do something, a manager can expect just enough effort to get the job done. At that point, expect the bell curve of the business lifecycle to begin to plateau. A worker who “wants to” do something will yield a much higher return. That employee has a tendency to go beyond what is required, and to see themselves through the lens that enables them to be at their best.
While “what do you pay” may be the start of the discussion with a new employee, employees are won by following up with discussion of career training, company culture, and other non-financial perks. Management is the key to moving from employees acting out of necessity, and beginning to spur action out of desire. Compensation is just one piece, albeit an important one, of how you should manage your most important asset: your workforce.