Rethinking the salary incentive at tax time

With tax season upon us, employees are more acutely aware of how their salaries match their career and lifestyle objectives. It’s a rare person who feels overpaid; quite the opposite. This perpetual tension results from measuring employee worth by salary, and it serves neither the staff nor management. Reliance upon a workplace culture based on pay-for-performance can do nothing more than perpetuate employee dissatisfaction. Despite how we all act sometimes, employees are not spoiled children, and management are not rich parents. It’s time to have adult-to-adult conversations about money, discuss where raises really come from, and why that makes sense. Fortunately there is an alternative approach to human capital management that has been tested in hundreds of companies of all sizes and one that has vastly improved the workplace culture in each. The way those organizations now define jobs, assign tasks and ask people to work together enables them to celebrate more successes and more swiftly navigate around failures. The simple fact is that companies don’t base salary on performance. They can’t afford to. And they shouldn’t even want to. Regardless of state or federal legislation, written company policy or any other verbal posturing, an individual’s raise has and always will be derived from four basic factors: budget, salary ranges, performance and potential. So, yes, performance is important, but the problem is propagandizing that base pay is directly tied to that one factor. While the average employee isn’t privy to budgeting information, managers are quick to proclaim the B-word when discussing raises based on real market factors and business drivers. Also, many managers decry the fact that salary ranges are now widely published on the internet. However, I believe this is actually a great tool that can be used to have transformational discussion. How? By having respectful, reality-based conversations with employees, and by creating new goalposts that have nothing to do with base salary. Simply stated, talk about total compensation, and throw out those wretched employee evaluation programs. Many employees only seek a bigger title because it means more base pay, when they neither desire nor are equipped for the expanded responsibilities. However, if total compensation is re-framed and personalized to their unique family or career goals, then items like medical benefits, savings plans, flexible work hours, telecommuting, educational opportunities and unpaid leave give them a greater sense of worth and satisfaction. All of this only works if you institute an authentic communications program so employees and managers can have adult-to-adult conversations. Communicate while the budget realities are obvious. Straightforward conversation will produce greater dividends. Gary Markle is a senior vice president at Energage, a Philadelphia-based research and consulting firm that surveyed more than 2.5 million employees at more than 7,000 organizations in 2018. Energage is The Denver Post’s research partner for Top Workplaces.