“You shouldn’t discuss your payrate.”
I was told this when I was younger. What I was getting paid was nobody else’s business. I cling to this as a rule to live by in many of my jobs, until I was older. I was raised in a family with little income, both parents working hard to put food on the table and keep the heat and lights on. If there was something we wanted, we earned the money and purchased it. Every job I had, besides those I worked with my dad or did on my own, were in a group of several people my age with a similar skillset.
Most of these efforts were grunt labor during the summer when school was not in session. My jobs were a combination of effort-based labor where my stocky and athletic frame were put to the test. I loaded and unloaded vehicles, I stacked items in a storage facility, and I pushed a lawn mower most of my youth. I was soaked in sweat most days with bruises under the bruises with my muscles angry at the effort. I woke up every day knowing that money comes from the effort and pushed through it.
This summer, I started working for a gravel yard. For large purchases, they used heavy equipment to load and unload. For the smaller purchases, a team of us shoveled and stacked bags. It was long and monotonous but did not require a lot of skill. I thought through everything all day long debating myself in my head, not always winning the argument.
I sat on the tailgate of a truck eating a bologna and cheese sandwich on white bread with mustard the chosen condiment. The bread stuck to the roof on my mouth as I chewed, the mustard overwhelming the flavors in my mouth. Bologna is a guilty pleasure to this day, but now I am refined and grill it. My coworkers, all similar to myself, shuffled through their lunch boxes like children looking for a sticker from their moms. Mine was a loosely packed grocery sack from King Soopers, with two sandwiches, an orange and a Coke. The soda bit my throat as the ice-cold bubbles popped in defiance of the summer heat. I wiped the sweat from my forehead and wished I had brought a hat.
The guys chatted about girls, sports, and cars. We all came from similar backgrounds and wished for more. The idea that we were working hard was not something we resented, but we opined in the effort to pay ratio. We were all very grateful for the opportunity to work, but we all knew we could be worth more. Our supervisor joined the conversation with interjection of the home he owned and the boat he just recently bought.
Our day about to continue, I jumped down from the tailgate, the gravel hissing under my feet as I make contact with the gravel covered ground. I walk toward the warehouse to unload the next truck, my feet kicking up dust with every step. The guys around me still horsing around, as I have already begun to imagine what owning my own boat would feel like. Like a video game, I start in my mind with a small fishing boat and by the time I reach the warehouse my head had me owning a yacht with a pool. It’s silly how these thoughts progress in my head, but I know that I am not owning anything of substance in my current position.
I take a moment to grab my supervisor in conversation about his boat again. It is a nice 21ft fishing boat; not too small but room to move around for him and his brother. He saved a few years for it, and his raise to supervisor helped him make the purchase. When I asked how much he made, he became defensive. I didn’t quite understand it, but I quickly apologize and went back to work. I asked another laborer what he thought he made.
“Way more than us, bro,” he responded.
“What do you make?” I asked.
“Same as you,” he said. “$7.” I was not making the same as him. I asked someone else and they also were making more than I, but different from the other kid. Annoyed and mistrusting, I created conspiracy theories in my head as to why the salaries were different. I take my gloves off and stick them in my back pocket and walk to the main building.
“Where are you going?” my supervisor shouts.
“To see the boss,” I return, as I angrily continue. He turns to the group and makes some statement that gets a laugh out them as they continue in their endeavor.
The main building was dirty and battered from the dust that was a continual barrage on the exterior. The main office overlooked the yard from the second story with a large white metal staircase that led up to the office. The expanded metal grate that made up the stairs and platform rattled as I made my way up to the door. I open the door to the office, a musty cool air hit me in the face from the swamp cooler that powered the air conditioner. Their attempt to keep a clean office was obvious but the dust found its way onto every surface.
The office phone was ringing on an unattended desk when I entered. A paper sign sat next to a metal ringer that states Ring for Help which I did. The sound is drowned out by the continual ringing of the phone. Two doors sit closed to my right with no indication as to whether they are a closet or the boss’s office. I ring the bell again and the door closest to myself opens to a large gentleman leaning back in his chair to reach the handle. The door opens large enough for me to see he is straining to hold the door open and remain seated. He looks at me from my feet to my head grunts out “yeah”.
I asked to see the boss.
He laughs gleefully, as if I was supposed to understand the joke I just told. He pushes the door shut as he makes his way to his feet; I can hear his boots against the floor as he walks to the door. It opens again, this time with more force. The phone still ringing, he walks around the desk and answers the phone. He bellows his message across the phone, chastising his possible customer for his hours of operation and slams the phone down. He turns to me and I am intimidated immediately. The smell of the swamp cooler is overwhelmed by the stale cigarette smoke he had soaked his laundry in. I walk to the desk he sits behind and ask him why I am not making as much as everybody else. He looks at me with question in his furrowed eyebrows, unsure if he wants to answer.
“What are you getting paid now?” he asks. I respond that I was making over a dollar less than the other two people I had spoken to.
“Why are you talking about your payrate with other people?” he asks, his face tightens as he leans forward. Before I can respond he quickly says, “fine, I’ll pay you more. What are they making”? I am young, so I immediately tell him what the other was making. He wrote down on a notepad that I will now make the higher rate. I am elated in my victory and turn to walk out.
“Don’t tell anyone what you make,” he bellows as I exit the building.
I walk down to the warehouse with a bounce in my step and eagerness to get back to work. I can’t believe that worked I think to myself. I walk into the warehouse where the dust had kicked up and make my way into the fray, grabbing bags and tossing them into the back of a pickup truck. My supervisor looks at me with a questioning eye and says “what’s up” with a nob of the head. I told him I asked for a raise. He scoffed a rebuttal and asks if I got it. I nod to confirm and then am standing alone as the entire crew was walking across the yard.
I grabbed my grocery sack out of the truck and started walking to the gate. I was leaving this property at my own hand, as I was certain it would be forced shortly. This was one of the shortest and most confusing jobs I can recall working.
Years later, I oversaw a large office in Crowd Management. Managers came and went in my life and I battled many of the same misconceptions that I interacted with at that short summer job. I had the opportunity to work with some great managers that operated a service with a reasonable wage for effort.
I also worked with some autocrats that felt our manipulation of staff began with pay. These managers held salaries as a closely guarded secret, which I believe is a control method to drive wages down. If everyone is aware of their market value, they would expect more.
In preparing for a retention strategy, I wrote down on a white board “Compensation”. This story danced around in my head as I thought through the many different jobs that I had and the people that I employed. To which all surrounded themselves with this notion that employees all can be limited in wage by making it secret. They operated with a production-based incentive process that ultimately became advancement based on personality and likeability. There was little defined in upward mobility or a defined strategy to receive an increase.
Looking at my jobs throughout my life, as a staff member and as a leader, I developed the basis for a pay structure as a variable to encourage the retention of staff:
- Transparent
- Comparable to the market
- Reasonable for the effort
- Increase strategy
- Upward mobility
Transparency
We are transparent in the provision of the rate structure to ensure that team members have the understanding of what the rate is. Opening the dialog creates a full understanding of the expectations. The rate structures should be easily accessible for everyone. I address transparency with two of the values that I believe are of the utmost importance: integrity and honesty.
Employees who are fully aware of the rate structure in a transparent environment are more likely to believe they have an impact in achieving more.
Comparable to the market
In every market I have been a leader, I look to the jobs that are similar in effort and look for the rates that will pull employees away from the positions we are hiring. If the market is seeing an increase in available jobs, there will be an inflation in the wages, and it is important to see and understand the trends.
Retention is more likely when the value in compensation is greater than the benefit to leave.
Reasonable for the effort
Often times employers get stuck in the belief that people will do the job at a wage because there are plenty of people to fill the request. Just because someone is willing to do the job does not mean that the rate is correct. People will get frustrated in the delivery of services if there is not a balance between effort and compensation. When the job is more difficult than others being offered in the area, then wage inflation occurs to compensate for the gap. The positions that compensate reasonably to effort necessary will pull the employee base toward them, even if the rate is lower than more difficult jobs.
Retention is more likely when the effort to provide services is balanced with the wage being offered.
Increase strategy
Employees are always looking for the opportunity to make more. They look for their edge in what makes their performance of services better than those that surround them. If the upward strategy is not clearly defined, then the employees will look to define it. This is often seen in the internal conflict that occurs between employees as they jockey for the increase.
It is imperative to give people a measurable calculation of how to accomplish a higher rate. Ultimately, an employee is going to receive a higher rate structure because they are adding a higher value to the company.
This can be accomplished through several methods.
- Tenure – Achieving years of service increases give the employees milestones to accomplish their tasks. The value of long-term commitment is valuable to the company.
- Trainings – Accomplishing trainings that fulfill requirements for the company give the employee tasks that when accomplished elevate their value.
- Skills – additional skills that require time and training for an employee to provide a specific job function. These can be skills developed over time prior to becoming an employee can help to elevate both the company and employee.
- Time commitments – Offering overtime and bonuses for hours above the expectation allow to see where additional participation can receive the benefits.
- Licensing – Many different fields require licensing to provide services. People that are willing to get or retain a license provide a higher value to the company.
Retention is more likely when the increase strategy is measurable and achievable.
Upward mobility
When an employee believes they are capable of reaching that next step, they will elevate their performance. It is important to have a direction for how their continued participation, training, and skills development will elevate their position. Creating an elevation structure that leads to position advancement from within will give people a sense of empowerment.
Retention is more likely when the people performing the job believe that they have upward mobility.
The problem that most leaders find themselves in, is that they are stuck on how people “feel” rather than how they can impact performance. Rate structure is complicated when looked at the point of how people feel. The pay rate of an employee should never be based on feeling, personality or likeability. The employee “feels” strategy has no bottom on the cup when we try to fill it up. The fact is that anyone who receives a raise will only see the incentive side of this the first time they receive it. Once the feeling is gone from the happiness that recognition has occurred, they earn their next check.
Creating a structure for pay rate that employees can earn through strategies empowers their involvement in the provision of services. Retention is more likely when an employer addresses all the components to developing an employee rate structure. The goal is to find the balance in each of these, where the employee will be empowered to provide the best service and the wage is a result.