Never Mess With An Employee’s Pay

Mike Harden | | Building Relationships, Resolving Employee Problems, Thinking Strategically

Why do people wake up in the morning, fix their coffee, and go to their jobs? Maybe they’re passionate about their work; maybe they believe in what they’re doing; maybe they’re learning and developing before moving on to new opportunities. But likely, they have to pay their mortgage, put their kids through college, and save for retirement. While work is about so much more than pay, compensation is the foundation. Like Maslow’s Hierarchy of Needs, we need sufficient pay before we can start to think about other “benefits” – like fulfillment and purpose.

Pay Is In The Fabric Of Your Team’s Life

Never, ever mess with your people’s compensation. While not an exact apples-to-apples comparison, hundreds of thousands of federal workers were placed on furlough in 2013. They waited anxiously for over two weeks for the shutdown to end – and for their paychecks to resume. Some 800,000 employees eventually did receive back pay, but this particular employer broke a cardinal rule: don’t screw around with the timing of your employee’s pay.

People have direct deposits; they have automatically scheduled payments; they need to make their rent. As the furloughed workers know, a late paycheck is never as good as one that is on time, even if the amount is exactly the same.

Respect For Employees

Compensation is a promise between employer and employee, and often included in that agreement are bonuses, salary reviews, raises, and benefits. Employers need to commit to and deliver on those promises. I once held a position as a salesman and worked on commission for a CEO who didn’t think that sales were particularly important. It physically pained him to write my commission check. It was as if he were doing me a favor by paying me – a favor he didn’t particularly want to grant.

This brings me to something my friends and colleagues have come to call the “Old Mike Harden Rule.” You should never have trouble writing a check to someone who puts money in your pocket. Dickens fans might call my old CEO a “Scrooge.” I have a few other terms, myself. Spending money on your key people is an investment, not an expense, and payment should never be grudging.

People have a variety of reasons why they wake up in the morning and go to work but compensation, in its many forms, is always a factor. When you renege on the fundamental promise to compensate your people fairly for their work, they are going to leave. And that’s the best case scenario. The worst-case scenario is them staying – and becoming more and more demoralized, disengaged, and unproductive.

Mike Harden

Mike Harden has developed exceptional depth and breadth of knowledge over his 40+ year career as an entrepreneur, executive, teacher, mentor, and coach. Today, as one of DC’s premier Executive Coaches, Mike helps good executives become great leaders. Find Mike on Google+

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