There’s a vicious cycle that happens in organizations across the globe. Each year, employees eagerly anticipate getting their performance reviews completed so that they can start benefitting from a much-deserved pay raise. But when the results come in, they are left wondering why they are being handed such a pathetic salary increase? It’s enough to make a good employee walk out the door. Sadly, many do just that.
Money is a Big Issue with Employees
According to a Harris Interactivec survey conducted on behalf of CareerBuilder, in which more than 3,000 employees were asked what makes them stick with their current employer and what would make them leave, inadequate salary is reported as being a large part of the problem. The survey results were:
- 58 percent of the employees said they planned to change jobs within a year
- 66 percent said they were unhappy due to concerns over salary rates
- 65 percent said they did not feel valued by their employer
- 37 percent had been passed over for a work promotion
- 39 percent indicated that they felt like they were underemployed
- 28 percent of them had not received a salary increase in the previous year
It’s clear from this survey that when an employee works hard and is committed to the success of the organization, they feel personally insulted over not receiving a salary increase that they believe to be fair. In fact, this is exactly what can put them over the edge and make them leave a job for greener pastures.
Boosting Employee Engagement and Retention
Maintaining a great workforce starts with giving all employees the opportunity to advance in whatever career path they desire. For some, just getting by is their goal. For others, flying higher and landing into positions of leadership is the objective. In either case, efforts should be made to engage all employees at their individual level.
How does this happen? Ongoing engagement and retention of employees take place through programs that direct supervisors have the greatest influence over. They have the ability to observe what employees are doing well and what they need support with. They also have the ability to boost morale among their teams, note performance that stands out from the norm, and issue feedback.
When it’s time to start performance reviews, the first line of defense is the floor management team who works with individuals to improve results. These are the people who can more accurately determine how performance bonuses and salary rates should be dolled out.
Managing Performance Better
There are several components of a successful performance management and salary review process that can help you engage and retain more employees. Include the following in these efforts:
- Use a consistent and fair performance management system
- Annual benchmarking reviews of market salaries for all job types
- Research the competition and offer something more
- Increase spending for incentives and benefits across the board
- Develop learning programs and career growth opportunities
- Capture employee exit interviews and learn from them
Fair Salary Increases are the Key to Retention
When it comes to retaining your best employees, it comes down to offering them salary and benefits that are worthy of their efforts. It’s true that salary increases should be directly linked to performance, which is an effort that must take place year-round through communication and performance management. Using your point of contact – your supervisory team, can help to make this happen.
Worried about how to afford adequate raises? This free whitepaper from PayScale might help: Compensation Budgeting.