The Salary Factor: Increasing Employee Engagement

Employee engagement is a buzzword in management circles. Creating and sustaining high levels of engagement is a result of a symbiotic relationship between employers and employees. Engaged employees are more likely to act in ways that are beneficial to the organization. In turn, employers who are committed to enhancing the well-being of their employees will foster employee engagement and successful organizations.

There are many engagement strategies and most of them focus on the softer issues of management. These include things such as leadership development programs, creating opportunities for staff to provide feedback, training and meaningful annual evaluation processes. Thus far, organizational engagement strategies have largely avoided the issue of salary. However, recent research indicates that we should add salary to our engagement strategy bucket.  “After all, a person’s primary reason for being employed is getting paid!” (Smith).

PayScale, a compensation software company surveyed 71,000 employees to study the relationship between pay and employee engagement. “The study results revealed that one of the top predictors of employee sentiment, including ‘satisfaction’ and ‘intent to leave,’ was a company’s ability to communicate clearly about compensation”. They discovered that salary has direct correlation to engagement levels (Smith).

However, the correlation wasn’t related to the amount of salary an employee received. Instead, the research revealed that the important factor is pay awareness – helping employees understand whether their pay is fair or not. In other words, the conventional wisdom of ‘pay more to keep them engaged’ was debunked. Here is a summary of what the research revealed:

What we believe about pay

This research clearly shows that most employees do not understand market salary norms. As a result, this misunderstanding becomes a means by which we become disillusioned about our work. “Pay is a crucial component of engagement because it’s not just a number; it’s an emotional measure reflecting how valued an employee feels by their employer. And it turns out, how people feel about their salary plays a huge role in how engaged they are in their work” (Smith). This study revealed that, “it is more effective for employers to compensate top talent at market value and discuss how pay was determined than to pay them more than market value and keep company compensation practices shrouded in secrecy” (Smith). Clear communication is critical!

This research teaches us that employers need to:

  1. Equip themselves (and their managers) with accurate data about the fair market price for their jobs
  2. Communicate this information to their employees. In the absence of communication, people will generally assume the worst.
  3. “Remember that how their employees feel about compensation matters just as much as what they’re actually being paid” (Smith).

I believe there is also a dark side to salary transparency for for some employers. While you may provide fair salaries to your middle or lower level staff, what about your C-Suite? If executive salaries are above market value then you have created an expectation that this should be true at all organizational levels.

“When it comes to having a more engaged workforce, you can’t assume that an employee’s perception about pay matches reality” (Smith). How effectively does your organization understand and communicate compensation?


Head ShotDr. Jeff Suderman is an underpaid professor, fairly paid consultant and overpaid pracademic who works in the field of organizational development. He partners with clients to improve culture, leadership, teamwork, organizational alignment, strategy and organizational future-readiness. He resides in Palm Desert, California. Twitter: @jlsuderman

Reference

Dave Smith (Oct. 5, 2015). Most People Have No Idea Whether They’re Paid Fairly. HBR online.

When Communication Causes Conflict: Understanding Styles

Conflict is a natural part of life. While many of us do not enjoy it, conflict can be healthy. Innovation expert David Burkus believes that a lack of conflict signals a lack of new ideas or a willingness to improve. When properly managed conflict can push us to higher levels of achievement.

The trick is facilitating healthy versus unhealthy conflict.

In his book, When Goliaths Clash: Managing Executive Conflict to Build a More Dynamic Organization, Howard Guttman teaches us about one common source of conflict – how we communicate. He cites research which shows that individuals naturally possess one of three communication styles – passive, assertive and aggressive. They can be mapped on a continuum as follows:

Communication Conflict 2

When we communicate with people who communicate with the same style as our own we usually do not experience conflict. As a Canadian, I believe that our nation generally has a passive communication style. In contrast, I recently observed a conversation by two Italians which sounded like a mild yelling match (it wasn’t!).

When we encounter people with who do not use our preferred communication style it can be a source of conflict. A former colleague and I used to have regular conflict. As I reflect on our communication styles, I believe that it was often a result of style differences. My style is somewhere between passive and assertive. Her style is aggressive. My communication breakthrough occurred one day when I began to speak loudly, brashly and interrupt her during a meeting. When I adopted her communication style she responded to me in positive ways I did not anticipate.

Adapting to this style was significantly outside of my comfort zone. However, when I understood and adapted, we were able to make progress.Here are three simple steps to help you minimize communication conflict:

  1. Understand your communication style. If you don’t know, ask other people for their input.
  2. Assess the communication style of the person you are conflicting with. Is it different than yours?
  3. Adapt. Develop a strategy for how you can adapt your style to that of the other person.

There are many sources of conflict and this model will not solve every problem you encounter. However, I believe that communication style conflict is one which is not often discussed. As you understand, assess and adapt, you will likely solve a few of those daily headaches caused by unhealthy conflict!


 

Head ShotJeff Suderman is a professor and consultant in the field of organizational development. He partners with clients to improve leadership, teamwork, organizational alignment, strategy and their Future-Readiness. He resides in Palm Desert, California. Twitter: @jlsuderman

References

David Burkus (2012). Managing Conflict Through Innovation.

Howard Guttman (2003) When Goliaths Clash. Mt. Arlington Business Press.

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