Cash. Dough. Cabbage. Greenbacks. No matter what you call it, money gets our attention. Money is a complex and contradictory topic. Many of us were raised with the notion that talking about money, specifically salaries and personal wealth, was rude. At the same time, the most gifted minds in history have devoted significant thought to the subject. And as a business owner or manager, money and salaries are always top of mind as you work to compensate and incentivize employees. Of course, any eight-year-old with a lemonade stand can tell you that money can be a great motivator, but in today's workplace, there's more to the story."He that is of the opinion money will do everything may well be suspected of doing everything for money."
This quote from Benjamin Franklin sums up the complicated relationship between money and motivation, specifically what happens when money is the sole motivator. The cable networks, business sites, and social media are saturated with cautionary tales of individuals and corporations led astray by outsized focus on profit. Alternatively, without proper compensation your employees, your business, and your reputation can all suffer.
If you're tight with the purse strings, you'll likely experience high turnover. Studies consistently show that one of the top reasons U.S. workers quit jobs is minimal wage growth. And losing employees to turnover can actually cost you a significant amount of money, both in lost productivity along with the costs of recruiting, hiring, and training a new employee. You may also experience lower productivity when your employees don't feel properly compensated. Finally, you can damage your reputation. In today's networked business environment, it won't take long for word to get out that your company pays poorly.
Of course, simply handing out raises won't keep your bottom line in check, so you must proceed carefully. The following are three strategies for motivating employees with money:
Finally, remember that money is only a piece of the puzzle. If an employee is unhappy with his or her position, or is a poor fit, it is unlikely that any amount of money will change those circumstances. Conversely, there are things that employers can do to motivate and encourage employees outside of salary such as flexible work arrangements, additional holiday or vacation days, or the opportunity to take on special projects or responsibilities. Each manager must find the appropriate balance for his or her employees and budget. In the meantime, for more information on employee motivation, and to access the salary benchmarking tool and total rewards statement generator, visit us online at HR360.com.