You may have seen the recent headlines about some CEO’s making 800 times the average pay of the employees in their organization. If not, you can read it here.
The gap in pay between top management and the average employee is the issue. As the demographics in the workforce shift, the issue because larger with some employees.
Fairness and compensation are two key drivers of employee engagement. Employee engagement is all about employees who are passionate about their work, committed to the employer and will give you discretionary extra effort.
My leadership tip for you this week is to pay your people fairly, competitively and work towards closing any major gaps in compensation if they exist.
By ensuring you have fairness in compensation, will help you with employee engagement. Which will lead you to greater productivity, less turnover and higher levels of morale.
A word of caution: From my experience, a fair and competitive compensation program doesn’t mean everyone will think it is. The program has to be explained and practiced by the organizations leadership.
Performance expectations have to be set, communicated, reinforced and followed up on. Then you will still have someone who doesn’t think it’s fair. Fairness in compensation doesn’t mean everyone will be happy about compensation.
Fairness means competitive pay in the industry you serve and the gaps between those that perform by delivering greater results and / or with higher levels of accountability in your organization are reasonable and justifiable.
Most people don’t quit their employers over pay. They quit because their boss is intolerable.
Bonus tips: Don’t be, or have on your team, an intolerable boss. Treat your people fairly, compensate them competitively and watch the gaps. Do this and you will enjoy the benefits of engaged employees.