SALARY IS IMPORTANT TO EMPLOYEES BUT IT IS NOT ALL
SALARY IS IMPORTANT TO EMPLOYEES BUT IT IS NOT ALL
Published on May 21, 2021
Management and Leadership Advisor
It is not uncommon to hear job seekers and employees saying that all they look forward to is to get a great job that will pay them a lot of money.
Equally, some employers say that they pay a lot of money compared to that and that other employer, therefore, there is nothing more that they need to concern themselves with.
Consider the following:
#1. SALARY IS IMPORTANT
When employees work, the bottom line is that they should be remunerated.
(a). Minimum Wages & Terms of Service
Salaries paid to employees should be in line with or above the Minimum Wages of the country as anything below that is contrary to the law.
Further, employees should be given all terms and conditions of service that are they are entitled to under the applicable employment laws of the country as doing anything less than that is contrary to the law.
(b). Salary Benchmarking
It is important to ensure that the salaries being paid to employees are competitive when compared to what other companies within the same sector or industry in the country are paying.
Undertaking or participating in Salary Surveys, therefore, becomes important otherwise you find a situation where the company experiences high Staff Turnover as employees leave to go and join the well-paying employers at the earliest chance they get.
(c). Company's Ability to Pay
While it is important to benchmark the salaries and conditions of services of the company, it is important to understand the company's ability to pay.
The company's labour cost ratio should be calculated against the revenue the company. That is to say, the company cannot be spending all its revenue on salaries and other labour related costs.
A labour cost ratio of about 20% to 35% would be ideal but this varies per industry and could also depend on the labour cost ratio targets that management of the company may be given to work with or towards.
#2. MANAGEMENT PRACTICES ARE IMPORTANT
The way employees are managed affects everything in the end despite the salaries that may be paid to them.
(a). Create a High-Performance Culture
When leaders create a high-performance culture, it helps all employees to work well.
Employees should be given specific performance targets that meet the SMART criteria.
High-performance culture helps to eliminate the culture of having employees who sit around chatting all day doing very little yet expecting to be paid salaries at the end of the month and sometimes demanding salary increments.
(b). Give Resources and Support
While performance targets are given, employees should also be given the necessary resources like equipment, people, and finances that they might need to deliver on the targets.
When employees feel supported, they perform well despite the pressure they may be experiencing or lack of all necessary resources as the case may be.
(c). Reward Employees and Take Corrective Action
Rewarding employees in whichever way monetary or otherwise helps employees know that their hard work is valued.
For those that are not performing well after appraisals, taking them for training or putting them on some sort of Performance Improvement Plan helps.
It is also not a crime for an employer to let go of employees who cannot perform even after training and warning them. Keeping non-performers is actually counterproductive as it eventually leads to a company embracing and promoting a culture of poor performance.
#3. WORK ENVIRONMENT IS IMPORTANT
Giving employees nice targets without giving them a good environment and tools to work with defeats the whole purpose.
(a). Give Work Tools
Employees should be given appropriate chairs and tables, computers, phones, toolboxes, and such other things as may be required for the employee to undertake their specific job well.
(b). Conducive Work Environment
Making employees work in a dangerous and unsafe environment is not the best of ideas as it leads to employees not being very productive, accidents, and death. Before the employers know it, they start dealing with compensation and court cases.
The employer should ensure that there is in place employment injury benefits or workers' compensation to cover accident-at-work or employment-related diseases.
Employees should be made to work in a safe environment free from hazards. Remember that no job is so important and no service is so urgent that it cannot be performed safely.
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Management and Leadership Advisor
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