One large company finds that many of their top performers are absconding:
It’s like clockwork. Every year a portion of our top talent decides it’s time to move on. Once those bonus or holiday checks are cashed, the flood gates open and the resignation letters start flowing in.
They’ve done an exit survey among the top performing employees leaving the company:
Of the 178 files, 83 people listed money as a reason for leaving. 62 listed it as the only reason.
Their conclusion: They must adjust salaries and compensation. My conclusion: They’re wrong. Here’s why.
They’ve been asking employees who have already taken new jobs, and the reason they took those jobs may well be a higher salary. But there’s a more pressing question: Why were these top performers looking for a new job in the first place? Take a closer look at that, and I bet you’ll find that money doesn’t matter much.
Many of the truly great workplaces who enjoy extremely low employee turnover rates, set salaries at about market-average. Most of their top employees could switch jobs tomorrow and get 25% more at a different company. They don’t because they really, really like their jobs.
When I asked the readers of this blog what makes them happy or unhappy at work, salary only cropped up once, and that was a too low salary making someone unhappy.
My alternative conclusion: This company needs to focus less on salaries and more on making people happy at work.
There’s more here:
I’m not so sure. You seem to be driving the same point quite a lot lately.
Personally I find that I’m getting bored with my job, but I still enjoy parts of it.
I’m also overworked. if my workload concerns were alleviated, I would feel better about the boring parts.
But I think by far the most annoying parts of my job is the office politics that my boss turns a blind eye to and my salary.
In fact everyone in our department has felt underpaid for the last several years. This knowledge has created grudges between employees who feel they deserve more than a fellow coworker. They work harder, why should the next guy make more just because they have a nicer title?
I’ve long felt underpaid and put up with the politics and boredom because at heart I still like the essentials of my job and some of my coworkers. Unfortunately I’ve found the salary issue has continues to dog my morale more so than any other issue.
The money does help.
I think you’re right, Alexander. What’s more, if this “exit survey” was the typical exit interview HR gives, I doubt they got honest feedback. In the exit interview, I have a very strong motivation not to burn bridges. “Money” is a pretty safe response to “Why are you leaving?” The real reasons are usually much more complex, and money is probably only a minor factor. But I have little to gain by being honest. If I’m leaving, I’ve probably already said everything I’m going to say about the real reasons. And I probably believe nothing I could say would make any difference, anyhow. And even if I could make a difference, I wouldn’t benefit from things getting better. So stick with what’s safe.
-TimK
James: I DO write about money a lot these days, don’t I? Thanks for calling me on it :o)
And of course feeling underpaid or unfairly paid will make you and your co-workers frustrated – I totally agree.
When a company gets salaries wrong it makes people unhappy. When the company gets them right, it makes it possible for people to be happy – but it’s not the salaries that make them happy. That’s something else.
Does that make sense?
Tim: That makes a lot of sense. As people leave the old job, their minds may already be on the new one, making it tempting to take the road of least resistance at that point.
The Motivation-Hygiene theory by Herzberg (http://en.wikipedia.org/wiki/Two_factor_theory) says just this: salary is an hygiene factor, and does not give satisfaction. It only gives dissatisfaction when it is not high enough.
hi alex. your blog posts have been so topical to my current situation that it’s a little freaky. :) yes, money is a factor, but it is certainly not the only factor. for me, as long as my needs are met financially, happiness in the work place is far more important. basically one can just tick off everything in your article “What makes people happy or unhappy at work” – i am unhappy because of the items listed under “What makes people unhappy at work” and i would be (and have been) far happier if more of “What makes people happy at work” happened!
Thanks Gabriel, I’d completely forgotten that theory, and it’s exactly what I’m trying to say! I needed that for the book also!
Victoire: Yes! This must mean that the mail order telepathy kit that I bought last year is finally working :o)
I’m glad you liked the post – the great thing is that none of those things are new and none of them are very difficult. Just about any workplace anywhere could make it’s people happy – if they chose to.
For those companies which try to insist that salary is not important I would like to see the ten highest paid (including bonuses) individuals swap paychecks with the ten lowest paid for one year. Then, and only then, will I buy this nonsense. This is a common ploy by people who write and talk about leadership, team building and other such topics. It makes the higher-ups feel good about not paying their employees well enough which makes them more likely to higer the aforementioned consultant.
I work for one reason. Money. If I had enough money, I wouldn’t be working.
In fact, AD, I would like to see the highest paid and the lowest paid swap too :o)
The point is not that salary doesn’t matter – the point is that salaries don’t make people happy. This can not be used by management as an excuse to pay people unfairly, because too low or unfair salaries still make employees unhappy.
Working only for the money is a perfectly viable motivation, and the good thing is that you KNOW your motivation. Many people don’t.
But what if you could work in a place where you got the money AND it was fun to work? That would surely beat working ONLY for the money.
For me, it was because I needed more time to invest on my personal project…
I have to say that money isn’t the only thing. I’ve found that the more you get paid, the more people expect of you. The more they expect, the higher the stress and the lower the happiness. At least that’s how things work here. Some of the simple things that make people happy are being taken away here in the name of “security” and it has an effect. A few months ago, I mentioned we started an initiative for the supervisors to walk around and speak to employees more. In the end, I was the only one doing it and I was basically told not to because if I didn’t say hello to every single employee, it may appear to be discrimination or preferential treatment. It was even suggested that talking to one or two people of the opposite gender could appear to be an inter-office affair. There are so many biases there that I can’t even begin to comment. End result, employees are now upset that I never come by to check on them, I was the only one that did and they want to know why I stopped. No good deed goes unpunished.
Ben: What a stupid response from the company to a great, great practice. I gotta wonder what school of management states that contact between employees and managers is such a minefield that it can only happen under strictly controlled circumstances and must be held at a minimum.
The school of litigous fear. The company has a detrimental fear of being sued for sexual harassment and discrimination in particular.
Hi, just a quick comment on this article. I think that the reasons people leave companies in general a lot of times boils down to mazlow’s hierarcy of needs. People need money to survive, if that need is met, we can move on towards self actualization. Great companies foster this drive. Bad companies actively work to impair someone’s drive to self-actualization. As you move up the hierarchy your satisfation and performance increases, everyone wins. But if you are inhibited from improvement, or actually degraded, then your focus adjusts until it finally becomes a money issue. At this point, most people will leave teh company. If they can line up a company that now satisfies their current need (money), they jump ship and can start down the road to self-actualization again.
Let me offer an anology between the two types of companies. A good company would offer the Buddha the most nurturing environment possible so that the Buddha could obtain nirvana. A bad company would expect this at a rock concert.
hi ben… i just received an article from the GIBS Review, which has relevance to your post about visiting employees on the floor… here’s an excerpt, the rest can be found at http://tinyurl.com/zfjxr
“When it comes to receiving information and providing feedback, employees prefer hearing it from their direct managers or supervisors. They also prefer having their managers come to their desks to sit and chat about work.”
Ben: What’s interesting is that a litigious atmosphere comes from a lack of trust. A lack of trust comes from a lack of communication. So your policy would probably result in FEWER lawsuits.
Nathan: Nice Buddha analogy :o)
Victoire: Thanks for the link, that is an EXCELLENT article!
Hmmmm…money can’t buy happiness, but I think one thing that gets often overlooked is that job satisfaction doesn’t really extend to other members of your family. From your family’s perspective, the most important aspects of the job are money and time. More money and more convenient work times are the primary motivating factors for the other people that depend on you, and sometimes their happiness has a bigger effect on yours than anything that happens at the office. If I came home saying- wow, what a great day I had today. I took a 20% paycut, but now I get to do all of these fun, creative things…
It’s just not compatible with a consumption oriented culture, where people become happy in their lives by acquiring objects, which helps them set their status/feed their ego relative to others.
As the president of a small consulting company, I have seen radically different motivations from people whose goals in life have been set to provide for others, versus those who are free to “self-actualize” or whatever. While it doesn’t necessarily change what they want out of a daily work environment, that definitely becomes a secondary priority. If the work environment is bad, they may leave, but as long as it’s okay, it allows them to satisfy the other important decision makers in their life. One of the most important things I learned from “Hiring the Best” ( http://www.jrothman.com/books.html ) was to make sure that the compensation packages I offered to recruits addressed all of the stakeholders in the decision making process, whether that means the wife who is worried about the job stability of her husband working at smaller firm, or a single mother that needs lots of time flexibility, you have to look at the whole family…
I think the other aspect is that there are jobs that almost no one enjoys, but nonetheless have to be done. The way to get people to do these jobs is to attach money or status to them. For example, most of what a “manager” ends up doing in a lot of organizations is easier and more boring than what someone in a more purely creative role might do. However, the status and money that come with the job make it worthwhile.
matt m: Thanks for a great comment!
I see your point about taking that pay cut for increased happiness at work, but I think there’s one more issue here: If John leaves his frustrating, hellish and stressful but highly paid job for one that is much nicer but with a lower salary, this may affect the living standard of his family. Sure.
But now that John comes home fresh, happy and energized after an 8-hour work day (as opposed to angry, tired and stressed after a 10-hour one), his family may well find it a wonderful trade-off.
I think we invest way too much faith in the power of consumerism to make us happy, even though all pscychological studies show that, no, that 45″ flat-screen TV will not make us any happier. At all.
I agree with you completely on the necessity of motivating each person differently. What makes Ed happy will make Jane terribly unhappy and vice versa. I really like your point about “making sure that the compensation packages I offered to recruits addressed all of the stakeholders in the decision making process”.
As for the tasks that no one likes: They might be fewer than we think. When we allow people to choose for themselves the tasks they like to do, there will probably always be some left over, but often surprisingly few. I wrote about it here:
https://positivesharing.com/2006/08/lets-lose-the-job-descriptions