I was recently doing listening sessions for a client of mine when the topic of the pay gap came up. They described how bonuses and commission payouts drove division between their team members, which, in turn, broke down the foundation of their teamwork instead of building it up. For companies that strive for teamwork strategies, this division will ultimately decrease overall morale. You’ll have a higher turnover if you have several employees who feel like they aren’t being set up for success. A part of that success is recognizing when there is a pay equity issue and determining a solution that doesn’t compromise any of your employees or brings obvious focus on just those in homogenous groups.
Take it Personally
Think about it. If you felt that your salary was unfair, wouldn’t you speak up? I hope your answer is: ABSOLUTELY. Because when employees earn well, they perform well. When they perform well, great leaders will acknowledge that. When employees are acknowledged for a job well done, they’re happy. And you guessed it, when they’re happy, they stay! Having a higher average employee tenure within your company builds integrity. Isn’t that what we strive for? Those are the types of strong legs you want your organization to stand on.
A few months ago, Craig Jelinek, Costco CEO, stated that they had raised the minimum wage to $17 an hour. Additionally, more than half of their hourly workers in the U.S., about 180,000 employees, are paid above $25 an hour. This dedication to fair pay has turned their employee tenure average to about nine years. Yes, nine years! Nearly a full decade. All because their company understands that when an employee earns what they’re worth, they live a better life. As a result, they can balance their work and personal lives better, keeping them present and motivated.
From Chaos to Clarity
So, that leads us here. How can you provide a solution amongst the division? The answer is simple. Listen. If your company’s core values include teamwork or diversity, equity, and inclusion (DEI), but your commission policy is mostly geared towards those who have been with the company the longest, it leaves no room for success. Job longevity doesn’t necessarily correlate with experience, and therefore, the team will remain divided. There’s a lot to be said in the saying, ‘give credit where credit is due’. Make sure that you listen and respond to your entire workforce to ensure they feel heard not just by your ears but also in your pay practices.