Using Pay to Manage Employees – A Huge Mistake

There are far too many managers who believe in the power
of salary, benefits, and incentive plans to manage their

Let’s face it, managing is tough work not because of all
the actual To Dos of the job, but because it requires
interpersonal and other soft-skills to develop positive
relationships with employees.

It is these positive relationships that create the
engagement that companies desire in their workforces.

Yes, there are those “lone wolf” salespeople who are
internally driven by those external pay plans and just
want to be left alone to do what they do best, but they
are the exception, not the rule.

The “2018 Global Talent Trends” by Mercer revealed that
there are 3 major trends driving employees today:
#1 Flexibility in schedules.
#2 Workplace wellness – physical and financial.
#3 Working with a purpose.

Additionally in May 2018, MoneyTalksNews identified 14
items, not prioritized, that employees look for in a
#1 Flexible hours.
#2 Clear communication.
#3 Common sense.
#4 Fair treatment.
#5 Loyalty and support.
#6 Advancement ability.
#7 Telecommuting options.

#8 Parental leave policy.
#9 Paid sick time.
#10 Up-to-date technology.
#11 Good health insurance and benefits.
#12 Vacation and paid days off.
#13 Retirement plan.
#14 Competitive compensation.

The lists above identify the need for some level of basic
financial security from a company, but it is not these
external items that drive retention. Research has proven
that the single biggest retention factor is the
relationship that an employee has with his/her immediate

As such, managers have to stop relying on salary and
variable pay plans to create engagement and realize
that the vast majority of employees value the social
rewards (i.e., recognition, a thank you note, special
projects, etc.) of a job more than the tangible rewards.


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