Crystal Spraggins, SPHR
Quick—what’s the one topic many job seekers are advised to avoid during the interview process?
You guessed it. Money. When job seekers are focused on money during the interview stage, it shows a lack of real interest and commitment to the work—or so the thinking goes.
I think all of this is kind of silly. Employers care very much about money—why shouldn’t workers? And wanting to earn a good salary is not about having a poor work ethic. It’s about freedom and value. When you have money, you have greater flexibility, and when your employer pays you well, you know your services are valued. As they say, money talks and the rest walks.
Here are five other truths about pay your employees probably won’t share with you.
- You can’t buy employee engagement, but your “spending habits” can cause it to wane
There have been plenty of studies to show that money doesn’t motivate, at least not in the long term.
Still, when an employee isn’t earning enough to comfortably meet living expenses, performance can suffer. Whether the worker blames the employer for being cheap and exploitative or simply is distracted by money issues or a job search, the point is that a focus on the work at hand may be lacking.
As an employer, you aren’t responsible for ensuring that your employees can sustain whatever standard of living they’ve chosen. However, you can certainly make a practice of benchmarking wages to be sure pay is fair and in line with the market.
- Some of your employees would work for less pay
Even in this sloooooowly recovering economy, some of your employees would work for less money if it meant more time to spend with family or to indulge outside interests or less stress.
- Employees talk to each other about pay
Despite whatever (potentially illegal) prohibitions you may have included in your company handbook, employees do talk about pay when it suits them. Your best defense about a nasty fallout? Consistent adherence to a fair wage administration program.
- Your compensation philosophy has priced some of your employees out of the market
Some of your employees are overpaid, and they know it. They’re fully aware their skills and abilities aren’t in alignment with the job responsibilities, and a new job (which they’d kind of like) would mean a pay cut. Contrary to what you might expect, however, these employees aren’t grateful. In fact, some are actually resentful that they’re “stuck.”
(By the way, your other employees also know that something is out of whack. They may not know the exact numbers in question, but they know that X has the job title of Y, which means he has to be making at least ABC, and he’s not worth it. They’re resentful, too.)
- No matter what you pay some employees, it won’t be enough, because they’re terrible money managers
People grow up, get jobs, start earning a paycheck, and start spending a paycheck, and rare is the individual who’s taught much about money management between the earning and the spending.
Yet, people who make a mess of their finances are generally regarded poorly. That’s why your employees are suffering in silence, when they could really use some help.
And you’d be wise to help them. A 2012 article from Time Magazine quotes the Financial Education and Literacy Advisers (FELA) as saying: “American workers spend an average of 28 hours a month researching personal financial issues. This lost productivity across an organization can be translated into real dollars—as much as $5,000 per employee per year. The collective loss across an organization can quickly have a significant negative impact on the financial performance of the company.”
Money is, by and large, a taboo topic in our society. Of course, that doesn’t mean we aren’t all spending (no pun intended) plenty of time thinking about it.
As you develop your compensation policies, be sure and consider some of the “pay truths” that occupy your employees’ thinking—and drive their performance.