“I want the business to make money, to be profitable. But I want to keep my people happy too.”
It is the age old equation.
To maximise profits, you need to maximise revenue and minimise costs. And if the majority of those costs are labour related, it can be a difficult equation.
Add to that that if you don’t keep your employees happy, you the end up paying for hidden costs such as reduced motivation, reduced productivity, and then possibly somewhat inevitably, the cost of additional recruitment costs, including the downtime around training a new employee.
So, it can be a hard one to balance. You don’t want to be held to ransom by your employees, but there is so much research around how engaged, motivated employees can make all the difference to a business and its productivity.
So, what to do?
To my way of thinking — it’s useful to think about money in Herzberg terms. It is not a satisfier -that is, you don’t generally feel satisfied/engaged with more of it, but you do most certainly feel dissatisfied if you don’t have enough of it. So, employees need to feel that they are not being hard done by. Once you’ve reached a fair amount -one that appropriately and adequately compensates for skills, experience and the actual job being performed, it can be useful to then think about other issues that go to engagement — career development, training, leadership, communication. Time and time again, these are the areas that are linked with a highly engaged workforce.
But there is one other useful thing to consider when thinking about this, and that is although the above is the theory and stands true for the majority of employees, there will always be individuals who are under particular stress or for whom money means something in terms of acknowledgement and recognition. Knowing your employees (really knowing them), knowing what makes them tick and what motivates them, means that you can make decisions around where to put your labour related dollars in a way that provides for maximum bang for your buck.
Until next week, happy reading,