Employees are the engine of a business. If you don’t properly oil it and fuel it, you are not going to be successful.
In today’s challenging economic times from the company janitor and interns, to the CXO’s, everybody knows that for U.S. and European Companies it is being increasingly difficult to compete in the new global marketplace. With growth rates that range from negative to 1-2% the CXO’s of U.S. and European governments and companies are scrambling to meet the needs of their stakeholders and on that way continue to receive their votes in order to keep their own jobs and perks. With the good old network (we can pretty much call it grey old network by now) in full function, executives are trying every single new and old technique to manipulate the public opinion (and company share value can be considered a direct consequence of the public opinion about a company), and many are blatantly picking and choosing sentences out of multiple studies in order to justify their short term decisions.
Money is not the primary motivator!
One of the most interesting and shortsighted phrases used to justify the continuous salaries and benefits cuts that CXO’s are implementing on their companies is the famous “employees do not need more money, they just need a pad on the back”. Every single time I have hear a CXO, VP, Director, or HR person saying this phrase, and developing employee engagement and recognition initiatives instead of salary increases, I ask myself why is it always about the employees salaries, and not the CXO´s compensation packages?. The worst part is when some very smart executives decide to publicly cut their salaries to $1 as one company did about 10 years ago, but they always forget to cut their executive perks including stock options and bonuses (which in the case of that particular executive normally exceed 10 million a year). I guess that if I was an employee making 10 million a year in stock and bonuses, I will also work for $1 salary any time.
To put it on perspective one of the actual studies of employee satisfaction from McKinsey, stated that:
“Numerous studies1have concluded that for people with satisfactory salaries, some non-financial motivators are more effective than extra cash in building long-term employee engagement in most sectors, job functions, and business contexts” (Dewhurst, Guthridge, Mohr, 2009).
It seems that the executives forget that for regular employees not making $10 million a year in bonuses and stock options, non financial rewards are great after they already have satisfactory salaries. On their quest to manage their quarterly bonuses and stock prices, CXOs are potentially shortchanging the long term viability of their companies, while at the same time substantially helping themselves in the process.
It is about money!
Jut by looking at Maslow’s pyramid, we can easily recognize that it is about money. Emotional, Esteem, and Self-Actualization needs, are much higher on the pyramid, than the basic, Food, Shelter, and Safety needs that are solved with yes you guess it “money”. When CXO’s talk say that it is not about money, they mean it is not about the employees money (theirs is on a different class so they actually need the money. They like to mention multiple hypothetical studies, and forget that in the majority of the cases the primary reason employees actually show up for work is because of money (their salary). I have been in meetings where I have been told directly to be sure my employees give the company a good grade on the employee satisfaction surveys, right after it has been announced that there will be no salary adjustments and bonuses that year (while we all can look in yahoo finance and see executives selling millions in stock options to make up for those disappearing salary increases and bonuses). When employees look at that, they have to say that it is about money, their money and not that of the CXO’s, since they have their own financial obligations to meet, and don’t count with their bosses ability to sell stock options to make up for the difference.
It has been proved that by paying more company profitability increases
In today’s globalized economic environment, small entrepreneurial firms have a competitive advantage against their established counterparts. By being more agile, focusing on a specific set of goals, and properly rewarding their employees they are improving their employee satisfaction and by extension their productivity. On a small company employees cannot hide behind the corporate speak of being engaged, and they actually have to work for a living. By paying more, small companies can attract and retain those highly productive individuals direct from their competition, and by doing so increasing their own resource pool, while reducing their competitors ability to respond in the market.
Time to regain your financial independence
In today’s globalized economy, U.S. high performance employees could use the services of places like Elance, and similar others to outsource their services on a global basis, and free themselves from having to work for a specific employer. We all know that job security is gone, and the next step is to gain our financial independence by learning to offer our services directly to our customers, which we could potentially do at a discount without the necessary expenses of a bloated company bureaucracy. It’s up to you to decide what do you want to do with your life everyday, and the examples of doctors, lawyers, actors, and even mechanics and lawn care entrepreneurs is one that should be considered by every single highly skilled employee of today.
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- HR+Survey Solutions Releases Study: Clinical Research Organizations Face High Levels of Employee Turnover (prweb.com)
- The Tale of the Oft-Forgotten Voice-of-the-Employee (business2community.com)
- How to Make More Money? Pay Your Employees More | Inc.com.