Why Pay Is ALWAYS Too Low And Why It Doesn’t Matter

Date: July 31, 2012 | Shawn Herbig | News | Comments Off on Why Pay Is ALWAYS Too Low And Why It Doesn’t Matter

Your employee engagement surveys have been completed, and the research shows that your employees are dissatisfied with their compensation levels. Should you be worried?

The good news: You’re not alone. Employees are never satisfied with what they’re paid.

The better news: It (typically) doesn’t matter.

If your company compensates its workforce at a rate that’s competitive within both your industry and region, research consistently shows that increasing compensation does little to improve employee satisfaction or performance.

While responses vary from position to position (for example, finance personnel tend to be more realistic when gauging relative compensation levels than line workers), employees usually think they should be paid more than they actually are. Thus, the majority respond negatively when surveyed about their salaries or hourly wages.

Obviously, if an employer chooses to pay below market rates, it risks increased turnover. Good workers will leave, while poor workers stay on. Plus, the talented job candidates needed to spur company growth will likely accept offers from competitors who pay better.

There are companies who choose to pay at the low end of industry pay ranges. These firms typically invest very little in employee training which offsets the cost of high turnover rates. The long-term effectiveness of this approach is debatable.

The goal is to accurately identify industry pay ranges, and set compensation levels within that range. The recommended approach is to research trade association data, instead of web-based data which often doesn’t consider regional and positional factors (such as the cost-of-living and shortages of qualified candidates), or to work with a research company like IQS Research, which often performs this type of industry research for its clients.

An exception to this approach is if your company demands a higher level of commitment from its salaried employees. For example, if your staff is expected to work a minimum of 60 hours per week while staff in comparable firms work 45 hours, salaries should be adjusted upward to reflect the increased workload.

The bottom line is that your compensation packages should be commensurate with the performance you require of each position, and competitive within your industry and region. In short, it should be at a level that attracts and retains the talent your firm needs (no less and no more). But that still doesn’t mean that your employees will give you high marks when they complete your employee engagement survey.

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Recognition Can Replace Raises Sometimes

Date: July 24, 2012 | Shawn Herbig | News | Comments Off on Recognition Can Replace Raises Sometimes
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As employers ponder ways to reduce employee turnover and improve employee performance, the question of compensation versus recognition always comes up.

Upper management is rarely receptive to raising salary levels but also questions whether an “Employee of the Month” program would truly be effective. Surely, recognition can’t replace pay raises, can it?

Yes, sometimes..or at least they can be complementary.

Employees — like all complex human beings — are motivated by both extrinsic and intrinsic factors. Among the external, tangible factors, compensation levels are certainly important. But, we humans also have a strong internal need to have our efforts recognized by both our superiors and our peers.

Social beings don’t live on bread alone.

Companies who excel in employee engagement understand this dynamic, and strive for a 50/50 balance between these extrinsic and intrinsic factors. Salaries and wages should be set at levels that are competitive within the industry and region, and commensurate with the effort being required. If this is not done attrition is likely to ensue and it will make talent attraction very difficult.

In addition, a variety of programs should be established that not only recognize, but honor the innovation and effectiveness of individual employees. These can include awards given at monthly meetings and annual conferences, and publicized throughout the organization via newsletters and emails.

The key is not to have these honors bestowed in a vacuum. The more widely these achievements are recognized, the deeper the satisfaction is felt (and the more the company benefits from the resulting motivation — from both the honoree and his or her peers who crave similar recognition).

A wonderful example is a CPA firm which regularly awards beautifully crafted lapel pins in attractive jewelry boxes to employees who go “above and beyond” their individual responsibilities. The pins are rarely worn by the recipients, but are proudly displayed in their boxes in the employees’ cubicles.

Such tangible badges of honor continually stroke the achievers’ egos, reinforce the benefits derived from a job well done, and improve employee motivation and retention.

So, while recognition programs may not replace pay raises, they augment compensation packages in a way that addresses both the extrinsic and intrinsic needs of the workforce.

That’s a small price to pay for improved morale, increased productivity and reduced turnover.

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The Role IQS Research Played in Louisville’s 55,000 Degrees Program

Date: June 7, 2012 | Shawn Herbig | News | Comments Off on The Role IQS Research Played in Louisville’s 55,000 Degrees Program

Assumption…we all know the old saying about that. And as experts in our respective businesses fields, we often think we know why people behave the way they do. But as professional research unfolds and brings the hidden facts to the light of day, more often that not, people find that their assumptions are incorrect or at least skewed.

Louisville Skyline

Recently IQS Research worked with the 55,000 Degrees initiative in Louisville to find out why people who had the capability to achieve a college degree ended up not attending or completing college.

The goal of this program was to increase the number of degree holding individuals in the Louisville area by 55,000, its primary challenge to discover why people don’t place a higher value on having a degree. One previously-held assumption was that people just don’t realize how important going to college is and that all that was needed was targeting marketing that stresses the financial benefit to obtaining a degree. That is, everyone thought they knew what the problem was, and leaped to a solution.

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A Market Segmentation Case Study?

Date: June 5, 2012 | Shawn Herbig | News | Comments Off on A Market Segmentation Case Study?

Figure 1

Market segmentation says that customers of a single business, whether retail or B2B, are not all created equally. When you separate your customers into different groups, you find out that their needs, expectations, and experiences can be completely different, and this can often bring to light gaps or cobwebs in your customer service that you can improve upon to increase customer satisfaction and sales.

Recently, a high end automotive repair shop with multiple locations here in the Louisville area needed some professional research done. The owner was frustrated and perplexed as to why the company’s profits were down, even though he was being told by his customers how great everything was.

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City Research: Beyond the Political Polls, What Does Your Community Really Think?

Date: May 29, 2012 | Shawn Herbig | News | Comments Off on City Research: Beyond the Political Polls, What Does Your Community Really Think?

Professional, targeted research is in a different league than political polling. The kind of institutional research that IQS Research does is not the same kind of research that a pollster does.

Polls can play an important role in city governments understanding their constituents, but the polls are often surrounded by political messages that can be misleading. To really get a tactical pulse on your community and the opinions of constituents, it’s vital to talk to the silent majority who will not hastily and loudly volunteer their needs and views.

From town hall meetings to city and county message boards, often the people who participate — the squeaky wheels — do not represent the majority opinion of the community. It can be too easy to take these participants’ input and run with it because it’s so accessible, but that’s a mistake.

You need to get the opinions of the silent majority, the ones who are sitting in their living rooms or are out working, or are in their neighborhoods volunteering, but are not showing up at meetings. Targeted professional research does just that, and it can reap tremendous benefits for your city or community, as a politician or community manager. Polling cannot.

A good example of this misunderstanding can be the perceptions of the downtown area of a community. Most people think they know what suburbanites think of downtown…it’s dirty, parking is hard to find, it’s dangerous, confusing to maneuver, etc.

But what we typically find is that most people don’t actually think these things at all. Most people who aren’t engaging with your city’s downtown don’t hate anything—they’re just apathetic. There’s a lot competing for people’s attention these days, and most of the time your downtown or the causes you’re focused on just don’t make the cut. It’s not about problems to be fixed; it’s about giving people a reason to care because apathy is the enemy, not negativity.

This insight only comes with a higher level of research, not with political polling. With this higher level research, you can make the changes in your community that will motivate people to make the trek downtown — or whatever large-scale community issue you’re dealing with — and not be distracted by the hidden agendas of a vocal few..

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