Many enterprises today are finding it difficult to hire and keep good employees. There are a variety of factors playing into this, but all boil down to the fact that people aren’t satisfied with their workplace. While there’s an inherent expectation for employees to perform at work, more and more, people are demanding the same from their employers. Here’s what organizations need to know about aligning purpose, pay, and performance to maintain good relationships with their employee base.
Employees Expect More from Employers Today
The employee-employer relationship is a complex one. For both parties, the other is necessary for its own success. It’s in the employer’s best interest to do what it can to attract not just the best talent, but also those who will be most engaged with and loyal to the organization’s mission and goals. This is becoming an increasingly difficult task in recent years.
According to Peter Cappelli, writing in Harvard Business Review, there are a few reasons why hiring has become tougher over the past few decades as many enterprises have nixed internal advancement and hiring individuals right out of school, and instead exclusively seek out those with previous experience who are looking to get to a higher wrung of the corporate ladder. With so much competition between firms to keep the best talent, offering employees what seems to be adequate compensation isn’t all it takes anymore.
Reimagine Workplace Incentives
There are many reasons why individuals choose to stay at or leave a company. Interestingly, according to a LinkedIn survey cited by Cappelli in his article, there’s a stark difference in motivations between those who are “passive” candidates—those who are employed and not really looking for a new job, who can head-hunted for a specific role—versus “active” candidates who may or may not currently have a job, but are looking for a new one. The LinkedIn survey showed that passive candidates were mostly swayed by better pay, while active candidates were looking to improve themselves and their careers.
While it seems obvious which of these will ultimately be better for the enterprise, Cappelli notes “Employers spend a vastly disproportionate amount of their budgets on recruiters who chase passive candidates, but on average they fill only 11 percent of their positions with individually targeted people, according to research by Gerry Crispin and Chris Hoyt, of CareerXroads. I know of no evidence that passive candidates become better employees, let alone that the process is cost-effective.”
This is why organizations need to start thinking about how they can do better aligning purpose, pay, and performance—both when hiring candidates and retaining top performers. Only catering to one or two of these aspects will lead to imbalances in how employees approach their work, and can potentially activate negative feelings about the employer.
Instead of focusing so much on finding someone who seems to be the perfect candidate, and enticing them by just offering a bigger paycheck, employers can benefit from taking a more holistic approach to hiring. Furthermore, it’s time for organizations to starting thinking more about total rewards, not just salary, when thinking about compensation.
By using various tools such as data and surveys, while also providing employees with more robust offerings and greater communication around reward possibilities, enterprises can do a much better job of appealing to—and keeping—top talent.
Purpose and Integrity Are Key
Any efforts made by employers to fulfill their employees’ total rewards and company culture expectations are ultimately going to come down to the authenticity of the organization. If it’s all an act just to try to get people to keep focused at work, without any element of true integrity, employees will see through it. An article from the Greater Good Magazine of UC Berkeley identifies four main elements that make people happier at work: purpose, engagement, resilience, and kindness. You’ll notice that none of these have anything to do with salary or status.
By using the right tools and strategies to access a deeper level of the employee psyche, it’s possible for organizations to do a better job in meeting these requirements. Simply offering more and more money isn’t going to work if someone is fundamentally unhappy with their job. To truly attract and retain the best talent, aligning purpose, pay, and performance is essential.