Can Money Buy Retention, Engagement, and Productivity?
Salary only goes so far for motivating employees
Kendall Barndollar
, Fri 25 August 2023
Can money buy happiness?
The overall happiness ranking for people making $40,000 a year was 3.5 out of 5, for those making over $300,000, the happiness ranking was 3.89 out of 5 (Forbes).
If a 7.5x increase in salary from $40,000 to $300,000 only increases happiness by 11%, what will increase happiness? How can executives increase employee retention by focusing on job satisfaction?
Many companies face high turnover rates that are both counterproductive and costly. High turnover rates are commonly attributed to compensation compared to other roles but, more goes into job satisfaction than salary and benefits. Happiness is determined by more than a paycheck, after a certain sense of financial security, happiness can no longer be derived from income. Employees will search for engaging jobs with future opportunities and a sense of belonging in the workplace in their new roles if they feel unfulfilled. To reduce turnover, leaders should hone in on employee engagement and organizational support to increase both job satisfaction and job performance.
Job satisfaction is how fulfilled someone feels within the scope of their professional and personal roles. The challenge of this metric is that each person may be seeking different goals toward feeling gratified at work. Some may seek high compensation or benefits, work-life balance, recognition, future opportunities, workplace culture, or job-specific content. With increased job satisfaction, job involvement, and motivation are improved, leading to better job performance, once the performance is high, most feel a better sense of achievement and happiness.
Job satisfaction and job performance are codependent and directly related. When an employee feels that they are doing well or have high performance, they feel more satisfied and fulfilled by their role. On the other hand, if an employee has poor performance, they will feel burdened and disconnected from their job and company which can lead to counterproductive work behavior. To better increase direct reports’ feeling of contentment, focus on employee engagement and organizational support.
Employee Engagement
It is a good leader's responsibility to be involved and engaged not only in their work but with their team members. To help employees find workplace purpose, begin by focusing on employee engagement. Although seemingly simple, there are a plethora of factors that contribute to employee engagement. Being able to pinpoint direct reports’ points of engagement will allow for increased job satisfaction and motivation. Engaged employees should show enthusiasm, initiative, collaboration, adaptability, innovation, and continuous learning.
Executive leaders should focus on the role of diversity, equity, and inclusion in employee engagement. Many employees who feel underrepresented or unvalued are apt to leave a company. Be conscious and genuine in the inclusion of employees and throughout the hiring process to embrace all backgrounds where employees feel respected. Overall focus on employee engagement will allow leaders to spot those engaged and focus on including those who aren’t to avoid turnover. Being able to improve employee engagement will unlock a new ability to increase job satisfaction and therefore job performance, thus reducing turnover.
Finally, prioritize company culture to reflect the values of employees. Work towards building an environment where professionals can embrace their mistakes, learn as they go and collaborate with others in their team. Between an encouraged growth mindset and a supportive environment, turnover will decrease and employees' happiness and comfort in the workplace will increase and lead to increased productivity.
Organizational Support
Organizational support is what an organization does to demonstrate its support for employees’ well-being, development, and success holistically. Executives should find innovative ways to help communicate this to employees, through actions and initiatives. For example, a company may consider a mentorship initiative where employees and executives or leaders can connect and discuss topics outside of job performance, such as career progression or work-life balance to exhibit the genuine care an organization has for its people.
Other forms of organizational support for a company to consider would be creating focus or interest groups for certain topics, such as a working parents group, a veterans support group, or even trivial topics like fantasy football or a book club. These initiatives serve several important purposes in communicating organizational support and working to reduce turnover. First, they bring members of a company together to build a community and increase employee engagement. Additionally, groups based on a commonality allow people to develop friendships and relationships that will improve loyalty to the organization. Finally, these initiatives allow a company to show their employees that they are more than just an employee and that they are valued for more than just the work they produce.
Additionally, firms may consider health and wellness programs and rewards or recognition programs. These programs would allow employees to feel seen and valued beyond their contributions in work tasks and potentially exhibit those who are leaders within the organization, and those who exhibit outstanding citizenship behavior, going outside of their job role and taking initiative to improve a process or colleague’s job. Organizational support does not need to come from a direct supervisor or boss, but from the organization as a whole, in different channels.
As in all business processes, feedback is crucial for growth. Executives and leaders should utilize quantitative feedback through retention and employee turnover rates. Consider the use of retention data or employee surveys to understand how team leaders may find more impactful methods to focus on employee engagement and organizational support for increased job satisfaction and contentment for employees. Additionally, consider the use of two-way feedback so leaders and direct reports can have open communication about opportunities for growth and strengths that enable a more personal and genuine connection with a company and its leaders.
As mentioned above, a mentorship program will strongly increase an employee's perception of organizational support; however, each employee's goals and expectations for fulfillment in their job differ. Have patience throughout this process of bettering the workplace environment both for the sake of the employees and the company. These initiatives will allow leaders to gain insight into their employees to find better methods of increasing comprehensive engagement specific to the members of their teams.
