Workers’ Wages Rise, But Will Their Spirits Follow?
By: Jon Picoult
Some prominent companies are surprising their employees with hourly raises.
In recent months, firms such as WalMart, TJ Maxx, Target, Aetna and McDonalds have all announced wage increases for their lowest-paid employees.
Why? According to news reports, these companies are looking to better engage and motivate their workforce -- creating a team of happy, satisfied employees who are more likely to delight customers, and less likely to quit.
Any company that elevates its pay to offer a livable wage should be commended. But these firms -- and those that follow their lead -- might be headed for a letdown.
That’s because the moves by these companies, while fitting nicely into the national conversation about income inequality, are nonetheless driven by very real competitive pressures -- market dynamics that are making it more difficult to attract and retain talent, to control employee turnover and boost worker productivity.
More Pay Does Not Equal…
According to the Labor Department, the number of people quitting their jobs has risen to the highest level in over six years. Those who don’t quit, apparently aren’t very happy. A recent Gallup study found that less than one-third of U.S. employees consider themselves “engaged” at work. The rest are eyeing the clock, if not the exit.
So businesses large and small have good reason to be worried as the economy improves and the balance of power shifts in favor of workers. But can you buy employee engagement? As wages rise, will workers’ spirits really follow?
There are studies that suggests otherwise. One of the more comprehensive analyses looked at data from over 18,000 workers in an effort to quantify the relationship between compensation and job satisfaction.
The researchers found very little correlation between the two, summarizing their findings with the provocative conclusion: “Pay has little to do with job satisfaction.”
A Climate of Dissatisfaction
Raises alone won’t boost employee morale and resolve all workplace ills. The reality is far more complicated, with a livable wage serving as a necessary -- but not sufficient -- ingredient for a high-performing workplace.
Factors other than pay play a critical role, from how well-equipped employees are to do their jobs, to how personally supportive their boss is (nobody enjoys working for a narcissist, at any wage).
When less attention is paid to these other factors (which often happens, since they’re more difficult to influence than wages), it can create a work environment where it’s difficult for employees to succeed, let alone be happy doing it.
Instead, workers become increasingly dissatisfied -- consumed with the stresses brought on by inadequate training, inflexible scheduling, antiquated systems, confusing procedures, unclear communication and inept supervisors. These issues can overshadow the goodwill created by a wage increase, resulting in a workplace that is downright depressing.
The Power of Engagement
To avoid such an outcome, corporate executives and business owners would be well-served to venture out of their offices more frequently and spend time with their lowest paid employees. That would help them see how these workplace impediments weigh on morale and motivation. It would help them see that worker satisfaction is earned, not bought.
And once managers feel they’ve addressed their staff’s most basic needs, by offering a livable wage, they should then ask them a simple question: “What do you need in order to do your job better?”
When managers solicit this feedback, and then make it their personal crusade to remove whatever obstacles are revealed (or at least explain why those obstacles exist), employees take notice. Few things are more engaging to workers than having a manager who advocates for their best interests and genuinely helps them be more effective in their role.
I’ve worked with companies that have institutionalized this approach through coaching and development programs for their management personnel. The benefits they’ve reaped have been impressive, from posting double-digit gains in employee engagement, to earning coveted industry awards for the customer experience those workers then delivered.
When managers are as accountable to their staff as they are to their own boss, great things happen.
A Struggle for Satisfaction
As the largest corporations and the smallest businesses struggle with worker satisfaction, they’d be wise to recognize that there’s a decidedly Maslowian dimension to employee engagement. Workers have a hierarchy of needs, and a livable wage is paramount among them.
But once that hurdle is passed, other, higher-level considerations come to the forefront for workers: Am I being treated with respect and dignity? Do I have the resources needed to effectively do my job? Is the company, and my manager, truly vested in my success?
Organizations that raise wages to motivate employees, but don’t address these other considerations, might be dismayed by what they end up with: a slightly better paid, but still disengaged workforce.
Jon Picoult is Founder & Principal of Watermark Consulting, a management advisory firm that helps businesses impress their customers and inspire their employees. Contact Jon at http://www.watermarkconsult.net or follow him on Twitter @JonPicoult.