How much is enough? Have you been baited into paying team members more and more but not seeing any better performance? Do we think throwing more money at the situation will fix the problem? Will the money fix the problem for you or will it fix it for the employee? Or does the next “raise” serve as a temporary relief much like aspirin for a migraine headache?
What is the real solution to requests for raises? Money is not a replacement for proactive leadership and management, so don’t throw money at a problem thinking “it” will go away. Money is also not a replacement for the staff member’s ongoing development and improvement – which is their responsibility! Staff members are not compensated based on skill set alone. They are paid for other performance factors such as attitude, customer service, problem solving, willingness, their ability to acquire new skills, and more.
The Owner/Manager and Team Member Dilemma
What are some of the frustrating comments that employers tend to hear from their employees?
- “I need more money.”
- “I can’t.”
- “Jennifer is paid more….”
- They talk about Jesse (other team members) instead of focusing on themselves.
- They are not interested in fixing the problems, they only see a problem for every solution.
- Or, even better, how do you like it when they say nothing and quietly avoid the job description expectations? The direct requests??
I speak with employers weekly that state that they can’t find good, much less, find great employees. You may luck into a few good employees falling into your lap, however the rest will materialize from your commitment to the investment in your employees. Great marriages are work and so are great employees. You must be willing to sift through the chatter and then look internally at ways they can change or improve the quality of work performed for fair compensation.
The Balancing Act
Being underpaid materializes as numerous problems for your team: lack of motivation, not feeling valued, high turnover, and general dissatisfaction. Being underpaid is often a perception… or even misinformation. Team members talk with others trying to triangulate into what they should be paid. The problem is people rarely compare apples to apples. Some look at their net pay while the other is quoting their gross pay. Some get tons of other direct and indirect benefits like retirement funding, contributions to health insurance, uniform allowance, endless supplies of drinks and snacks, training, team parties, etc., etc. Those requests for more money are even really the embodiment of one of my favorite quotes: “Your lack of planning does not constitute an emergency on my part.” Some just don’t plan well at home and want to make their problem, yours. With a lack of facts people will make up their own facts.
Don’t Let the Confusion Overwhelm You or the Situation
It is completely understandable to be frustrated with all the excuses about performance, details leading to a lack of result and……. let’s not forget the drama! The reality is, this all comes down to one basic factor; fair compensation for effort and output. Effort and output are tied to results. It’s that simple. If we don’t see the results, a merit increase to pay is not warranted. There are similar problems to being overpaid: it stifles employee development, spreads resources too thin, and can lead to talent “bottlenecks.” You can’t afford that.
And let me address one factor that is used and abused for raises far too often. Length of service on its own is not a reason for a raise. Period. That point might raise a few eyebrows. And that’s ok. Length of service could be an indication for a merit increase if the team member’s skills have grown over that time period. We want team members to mature like wine, not stagnate like still water or mature like milk left on the counter.
What Are You Supposed to Do?
The best way to fix this opportunity is to address it head on, and in a timely manner. Here are a few action items that you can employ to stay out in front of the issues, manage perceptions and put the proverbial ball in the team member’s lap.
- Annual compensation review – Yes, this should be a separate meeting from the performance Compensation reviews play a large role in communicating and managing perceptions. They also help you maintain valued staff by communicating the career path to follow. It also gives the employees an incentive to stay and grow with the company. Don’t leave this to their imagination. As said above, with an absence of facts people will make up their own facts.
- Annual performance review – Carve out 30-60 minutes to discuss their performance, set goals, discuss professional development, establish objectives for contributing to the company/department’s objectives as well as discuss expectations and accomplishments. Employees who feel valued will do more than what is expected.
- Explain position expectations and responsibilities – Positions have a tendency or need to evolve and change as a company grows and expands. It is important that as this happens, position expectations and responsibilities are being evaluated, discussed and readdressed. This will help with team structure, health and overall productivity as a company.
- Hire for attitude and trainability – Although a candidate may have all the right qualifications on paper, desirable character and attitude do not always follow. It is far more important to look at a candidate’s attitude and character through the interview as well as throughout their employment. You can train a person on how to do the job but you cannot train a person on attitude and work ethic. It’s funny how so many employers hire solely for technical skills yet ultimately value employees for work ethic, ability to learn, being trainable/coachable and being adaptable.
- Train for the job – Though a simple idea, many employers overlook the importance of training their employees on how to master their job. Better training leads to better outcomes and more efficient work. Employees who have been trained on their job, gain the skills and confidence to enhance employee satisfaction, which reduces job turnover.
- Observe performance weekly/monthly – Paired with training, a few hours out of a week to observe your team’s performance will help with their professional development…as well as yours! It is an opportunity to address weaknesses, acknowledge strengths, and help employees exceed expectations.
Take charge of your team and the future of your team. Many employers will spend an excess of $10,000,000 on staffing over the lifetime of their business. Make the most of your investment.