– By Bob Cooper of Elite Worldwide
Before you start giving out raises for tenure alone, consider this: outside of raises that are based on an increase in the cost of living, all raises should be commensurate to the productivity of the employee. If you decide to give pay-raises as a way to reward loyalty, then be aware that you’re heading down a dangerous road. The employee will continue to get their raises for the same level of productivity, and before you know it you are paying them far more than what you would be paying someone else to do the same job (Airlines and many major US companies have fallen into this trap over the years). I’m not suggesting an employee shouldn’t be able to earn more money, because they should! The operative word is “earn.” So when an employee is up for their performance review, if it is clear that they are bringing a greater value to your company and if they have met your predetermined performance standards, then they should get the raise you agreed on because they’ve earned it. So sit down with each of your employees and discuss your expectations and what they will need to do to earn a higher income. Tenure alone should never cut it. Reward tenure with paid get-a-ways, tool credit, etc. Not raises.
For more tips on effective employee management, visit the Elite Worldwide website at www.EliteWorldwideStore.com.
Kim Reilly says
November 22, 2010 at 11:42 pmIt used to be that in the “Old days” you would give that “Loyal” employee a monetary pat on the back at least once a year, even if it wasn’t a big one, at least something to show appreciation. Well, now days that is not the “norm”. Companies are scared of giving any type of a raise due to the economy and unfortunately they also know that there is a number of people out there without a job that would work for the rate the employee is working for now. So, who says the economy is bouncing back? No raises=no stimulating the economy!
Bob Cooper says
November 24, 2010 at 4:41 amHi Kim. Thanks for your comments on the article. It is kind of you to take the time to share your thoughts. I agree the economy needs to be stimulated, and I believe the best way we can accomplish that goal is by believing in this great nation, having confidence in the economy, and treating the people that work with us in the most professional and ethical way. I have discovered over the decades that the greatest key to building any company is by having clearly defined goals, and then hiring people that have the right attitude, aptitude and ethics. If we do the right things for the right reasons, and if we never put money ahead of people, we can have a really great life, and help a lot of people along the way. Thanks again for your thoughts Kim. There is no question the industry is a better place because of people like you.
Bob Cooper