We have experienced several years of cost cutting and a tight economy with no real relief in sight. Healthcare reform is introducing more economic uncertainty, and the bottom line is a multi-year freeze on salary increases for many companies. While this may be frustrating to many HR professionals and employers, they do themselves and their employees a disservice when they fail to look at the total picture. Where does salary fit into the employment equation?
First, let’s dispel the myth that money is the best motivator. If this were the case, the highest paid people would also be the best, most productive employees. While money may motivate in the short term, people’s budgets quickly adjust, the “raise” is soon forgotten, and any motivational aspect is gone. Even tying pay to performance on an ongoing basis may not produce the desired results. How many people have worked with the top salesperson who is rude to her co-workers, lacks integrity when it comes to dealing with customers, and dumps the mess on the implementation team while she waltzes off with the big bonus? If you need more proof, just consider the motivation that money provided to Bernie Madoff.
Employees rarely seek new employment because of money alone. Let’s explore the factors that allow us to attract, retain, and motivate the best employees. According to a recent study by David Rock and Jeffrey Schwartz, status, fairness, autonomy, and relatedness all play key roles in motivation. I’d throw in pride and relationships.
You may be thinking, “I don’t have the money or ability for promotions,” but there are other ways to elevate someone’s status. Consider giving your top-performing employees greater responsibility and sincere, frequent recognition for a goal achieved or a job well done. Don’t wait for performance appraisal—feedback should be immediate. Not every employee is comfortable with a big shout-out in front of the rest of the team, so allow for different types of recognition, from verbal recognition, to a “star” board, to a plum workspace, to a new title. Consider elevating the job title. Within a title, more experienced, high-performing employees could get the title of “Senior.” Senior employees could have additional authority or responsibility, assist with training, or take over the challenging customer who asks for the supervisor.
Studies have shown that as long as employees are fairly compensated, money is no longer part of the equation. Reread that sentence carefully. The key is a belief that they are fairly compensated. If the boss is taking raises or enjoying lavish “business trips,” you can bet that employees won’t feel they are fairly compensated. If the “high producer” that seems to make trouble for everyone else is being rewarded, employees won’t think that’s fair. So, make sure your wages are fair—so that even if lower than your competitors’, employees feel that everyone is making a fair share of the sacrifice for (hopefully) long-term gain.
A frequent complaint employees have about their bosses is micromanaging. By giving employees more autonomy, we tap into one of the great motivators: the desire to innovate and improve. Giving an employee the authority to make decisions allows the employee to excel and achieve. The employee is more engaged. My advice to new managers is to let go. When an employee completes a project, even if he or she didn’t do it exactly the same way you would have, if it is correct and meets the goals set for the project, resist the urge to make changes. This is especially true where there is more than one right way to do something; for example, writing a letter or solving a customer problem. For the letter: are the grammar and information correct? For the customer problem: is the customer happy with a solution that meets parameters for cost, safety, etc.? If so, resist the urge to improve and instead provide acknowledgement for a task completed.
During a visit to the NASA space center in 1962, President Kennedy noticed a janitor carrying a broom. He interrupted his tour, walked over to the man, and said, “Hi, I’m Jack Kennedy. What are you doing?”
The janitor responded, “I’m helping put a man on the moon, Mr. President.”
People like to have a greater purpose. It’s essential for a company to communicate a clear mission and is most effective when employees believe in the mission and understand where they fit in achieving it. “If you hire people just because they can do a job, they’ll work for your money. But, if you hire people who believe what you believe, they’ll work for you with blood and sweat and tears,” according to Simon Sinek. You certainly can’t make employees believe in the company mission. What you can do is to be sure your company clearly articulates the company mission before hiring people, screens out those who do not embrace it, has leaders who champion it, and rewards those who help achieve it every day.
I firmly believe that most employees go to work each day wanting to do the best job they can. My tagline as an HR professional is “empowering employees to achieve great results.” Strategic HR professionals should seek to remove roadblocks rather than to make rules. If given the opportunity, most employees will rise to the occasion—so give them that opportunity. They want to contribute and feel valued, so ask for their ideas and listen to them, implement them when you can, and give them credit. Not only will you have greater employee satisfaction, you will get some really great ideas on how to improve your product or processes.
Employees generally spend more time at their jobs than they do with their families. Companies are often perplexed when they pay well but still experience high turnover. They overlook the obvious: often, people don’t quit their company, they quit their boss. Use tools like 360-degree feedback and don’t assume that a top- performing [insert functional job title here] will make a good manager. Be sure your managers understand fundamental managerial skills and follow your company values.
In good economic times or bad, look for simple, inexpensive ways to help employees view work as their team. Recognize milestones in their lives (in alignment with their comfort level and religious beliefs). Another way to enhance the work environment is to provide inexpensive or free perks wherever possible. A box of cookies or doughnuts—perhaps ice pops in warm weather—goes a long way. Becoming a member of a local credit union is free to employers and offers employees some benefits banks may not provide. Offering pre-tax, employee-paid benefits can actually save the employer payroll taxes while offering employees the ability to purchase additional benefits with pre-tax premiums. Time is at a premium, so explore ways to create a concierge environment. Many local vendors, such as the dry cleaners and car washers, are willing to come to your office for service, pick- up, or delivery. In my town, an entrepreneur came by each week with roses for sale. Since she was getting the roses at wholesale, she was able to sell them for $10 per dozen, so employees could treat themselves or their spouses with minimal cost and effort. All of these little touches save employees money or give them back free time and create an environment where employees feel like their company cares about them.
Money isn’t everything when it comes to employee satisfaction and motivation. Instead of focusing on the lack of monetary resources, Human Resources professionals should view a tight budget and a salary freeze as an opportunity to provide expertise and value to their organization. By removing the temptation to use money as the primary motivation tool, the strategic HR professional will identify and implement changes to engage employees and direct their focus to achieving the core mission of the company. The overall results are higher engagement, higher productivity, greater creativity, and increased customer satisfaction, all of which have a positive effect on the bottom line. This is the value of an HR leader.
Maryellen Castellano, SPHR, has more than 20 years’ Human Resources and Management experience. She served as president of her local Chapter, HR Martin, in 2011, and is currently the Membership Retention Chair for HR Florida.