Are both employees and managers “on the same page” when they discuss employee retention? Some studies say, “Yes, the two groups are closely correlated.” Others say, “No, employees and managers are not aligned in their views on the factors that retain workers.”
Find the truth for your organization. And why is this important? If you act on leadership myths or isolated reports and research, you might aggravate the problem rather than solve it.
One of the most common myths is that money will cure all employee dissatisfaction. To illustrate, several study reports state that more than 75 percent of the managers queried thought their employees left organizations because of money issues (i.e., better compensation elsewhere). Managers often state, “Of course our employees want more money. If we give them an increase in hourly wage, then we can surely satisfy them. Let’s increase their bonuses as well and then we don’t have to worry at all about losing them.”
While research shows that low compensation is an important dissatisfier, you really don’t know whether it is true in your organization until you look at your current compensation structure and ask your employees. Money may not satisfy your employees; but if it is lacking, they will certainly be dissatisfied. The extent to which you should focus on money will depend on your situation. Is your pay scale competitive? Has the job role of the employee changed without commensurate change in compensation? If yes, then it is likely that you have an issue to correct.
If you intend to reward with cash, keep this in mind. According to the American Productivity & Quality Center in Houston and the American Compensation Association, it generally takes five to eight percent of an employee’s salary to change behavior. (If your reward isn’t cash, then budget about four percent.)
