Your employees are the most important part of your company and should be paid what they're worth. If you don't make them feel valued, they'll find someone else who will.
Unfortunately, a new study reveals workers feel their pay doesn't match their performance. The study, commissioned by CSMA Club, examined responses from 1,200 public and private sector workers and found 25 percent of private sector workers feel their pay doesn't adequately reflect their performance. In the public sector, that number of undervalued workers jumps to 75 percent.
So, strictly in terms of compensation, what might your employees be worth? Let's take a few minutes to investigate.
How to Calculate Salary
John Sullivan, professor of management at San Francisco State University, recommends using the following method to calculate employee value in an interview with Bloomberg BNA:
Take the annual average revenue each employee creates and divide it by the number of employees working that job. Then calculate the difference between what average workers produce and what top performers produce.
Of course, if what an employee does directly correlates to sales, this will be easier to factor. That's clearly not the case with everyone. If the employee generates ideas, you'll have to place a dollar value on those and any other intangible work done.
Admittedly, that only gets us so far. Apart from the numbers, here are a few other things to consider when deciding your employees' salary level:
1. Innovation and ambition
High performers set the bar for the rest of your team. They motivate other employees to do their best and keep moving toward achieving their goals. They're not afraid to take risks and offer out-of-the-box suggestions to problems no one has yet been able to solve. It's important to recognize these high performers for going above and beyond the call of duty.
Reward your high performers for their productivity and the value their ideas bring to your organization. Provide them with the praise and recognition they deserve, so they feel validated in their work. They'll be less likely to burn out quickly when their efforts are noticed on a regular basis.
2. Niche skills
Think about the employees you can't replace -- whether it's because of the way they can manage a difficult task seamlessly or a rare skill they have. Maybe you've never seen anyone who can keep the whole audience engaged during a presentation like Teresa can. Maybe Bill can troubleshoot computer problems, saving you from expensive service calls.
These employees should be paid more than your average worker because they're saving you money every day -- even while you might not realize it. Factor these savings into what they're being paid.
Additionally, work with these employees to help them further develop their skills. Offer stipends for any trainings or certifications to which they aspire. Support their quest for knowledge and mastery -- it will only benefit you in the long-run.
An employee's attitude not only affects their own productivity, but the entire team's morale. Negative behaviors are contagious. In fact, a recent study from the University of Florida, published in June, reveals low-intensity negative behaviors, such as rudeness, spread throughout the workplace the same way an illness does. One employee with a poor outlook can unleash a virus that infects the entire company culture.
Reward your employees who are positive and uplifting. They're the ones who are most likely to lift the team out of a productivity slump and reinstill optimism when the team needs it most. Consider providing them with a monthly bonus to show them how much you appreciate the life they breathe into your organization.
4. Loyalty and integrity
Though your most loyal and honest employees aren't always your top performers, they help you combat a very expensive problem: turnover. An organization plagued by employees who constantly jump ship struggles with keeping up morale and a cohesive company culture.
Thank your loyal employees for helping you maintain a cohesive environment. Provide regular raises to reward their loyalty. Their choice to stay saves you the cost of recruiting, onboarding, and training a new employee.
Employees won't stay long at an organization that doesn't meet their needs or treat them like highly valued members of the team. Pay is a big part of that because it directly affects the employee's lifestyle. Support your employees in a way that matches their value, and they'll help drive your business to success.
What are some other ways you can show employees how much you value them? Share in the comments below!