Managing Low-Wage Employees - 8 January 2008
If you'íre not paying your employees 20% more than your competitors, you'íve got a problem. Thankfully, the 20% doesn'ít need to be made up of cold hard cash.
People happily give up a bit of money, and sometimes a lot, so long as they'íre getting something extra. In the workplace, the magic number is 20%. If your company'ís salaries are lower than your competitors' and you'íre unable to increase them, you need to provide extra intangible value thatí's 20% more than what your staff could get elsewhere.
The world of luxury shopping is one example where consumers happily make a financial sacrifice in the hope they'íll get more out of it. In many cases, people happily hand over $1000 for a $50 handbag just because it contains a logo which signifies enhanced quality, a finer buying experience, or quite simply, status. Whatever it is, they'íre sacrificing money for extra intangible value.
On the other end of the scale, convenience stores are flourishing even though their prices are often two or three times as much as what you'íd pay in a supermarket for the same products. That'ís because theyí're also offering extra intangible value such as 24-hour shopping and the handiness of being a short walk away from your home or office.
The 20% extra intangible value that you provide can consist of more opportunities, greater flexibility, increased responsibilities, challenging work, more autonomy, career development, unparalleled training, involvement in decision-making, fabulous team-mates, and of course, unbeatable management.
The options you choose would vary from person to person. One employee may have no interest in challenging work whatsoever but be intensely motivated by the thought of having total autonomy. Your task is to find out what rocks their boat, and ramp it up to a level where they'íre getting 20% or more than they would anywhere else.
If your company is the financial equivalent of a $2 bargain basement store, it doesn'ít mean that it can'ít be a Gucci at heart.
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