Are Raises Really Necessary?
Contributed by: Lynda Conrady Hess
The compensation plan known as Pay-for Performance has been widely used in organizations for the last several decades. It consists of tying individual wage increases to increases in company success. While it sounds good, I’d suggest that it no longer provides the best source of motivation. Here’s why.
A typical wage increase in the US over the past 5 years has averaged 2-3% across most industries. Is this really an amount that motivates anyone? Studies say no. Since wages are frequently an area where companies try to squeeze costs, the lack of significant funds for wage increases has been lacking for years.
Ironically, in survey after survey, employees identify things other than money as the top issues that contribute to their job satisfaction. It seems it’s time we start listening to this, recognize what is important to employees, and work on the items that provide better motivation.
Here are some practices that help employees be more motivated on the job:
- Adequate training and resources to do their job
- A culture that supports teamwork and collaboration
- Clearly understanding what their supervisor expects of them
- Knowing that their pay is competitive within the industry
- Opportunities to gain new skills that can further their careers
- A compensation policy that is clearly stated and executed
- Recognition for their accomplishments; this doesn’t have to be with money
- Regular feedback, not just an annual, painful performance review
- Allowances made for work/life balance issues
- A supervisor who regularly asks questions and listens to them
- A company that is consistent about its values and puts them to work every day
- Established, individual goals that they are part of setting, and are specific and attainable
- A work environment that’s not exceedingly stressful
If you find yourself with low funds for raises this year, look to these other ways to help boost on-the-job satisfaction.