Do the people who work for you love their jobs? If so, it may not be for the reason you think. For years, some management experts have argued that employees care more about the nonmonetary aspects of their jobs than they do about compensation. A new survey by Korn Ferry demonstrates just how true that is.
When 350 executive-level employees from across the globe were asked why they loved their jobs, only 6 percent said that pay was the reason. And when employees who were unhappy in their jobs were asked what would make things better, only 10 percent picked "more equitable compensation." In other words, if you're designing incentive programs to give employees financial rewards for meeting or exceeding objectives, you may be partly on the wrong track. Yes, you must compensate people fairly and make sure they share in your company's financial successes. But that won't make the difference between happy and unhappy employees. And it won't inspire the best of them to stick around for the long term.
What else do you need to do? Consider these items, which employees told Korn Ferry were more important to them than money--especially since you can offer them all at little or no cost:
1. An employer they can be proud of
When asked what factor would most improve their feelings about their jobs, 47 percent of employees said they wanted to work for a company "whose culture is aligned with my values." While it may be surprising that this was the No. 1 factor for nearly half of respondents, it's not news that culture matters, and that it matters a lot. It's human nature to want our efforts to be serving a purpose that we can believe in, beyond just supporting ourselves and our families.
In a small or startup company, it can be easy to set cultural issues on the back burner while you focus on getting established, making payroll, and paying off loans or securing that next round of funding. But every company, no matter its size, should have a mission statement. You should be able to articulate in a sentence or two what makes your company special and worth supporting. And most important, your decisions and actions have to live up to those principles, or you'll do yourself more harm than good. "For example, if their organization gives lip service to a participative culture, but in reality decisions are made from the top down, they'll feel undervalued and may leave," according to Korn Ferry senior partner Dave Eaton.
2. A clear path to advancement
You knew this was important, but you may not have known how important. When asked what was their greatest frustration with their jobs, 55 percent of respondents answered, "Lack of growth opportunities."
But providing a clear career path can be a challenge for a small business, where you may have limited opportunities to promote employees into higher positions, at least within your company. What to do? You can beat this seeming conundrum with a healthy dose of honesty. At least once a year, either you or a direct supervisor should sit down with each of your employees for a career assessment. Find out what they hope for in the future and how you can support those goals. This may mean providing development opportunities by creating training programs within your company, mentoring employees yourself, or sending people for external training. It may mean scouting out appropriate jobs in other companies and helping employees move on and up when the time is right. It may mean offering your support to employees who want to start their own companies.
Whatever you do, make sure to address the question of advancement in an open conversation, even if you can't offer much of a career path within your company. Whether or not they say so out loud, your employees are always thinking about their futures.
Working with people they enjoy is surprisingly important for most employees. In fact, it may be what they care about most. When asked why they loved their jobs, 43 percent of respondents chose "Relationship with co-workers/clients."
As a business leader, you should take that statistic to heart. It means that both when hiring and when taking on new clients you should pause to consider the social and emotional aspects of bringing a new person or team into the fold. You should also make sure to provide plenty of opportunities for employees to socialize during and after work, with things like a communal area for taking breaks, in-office meals, Ping-Pong, outings, and whatever else the people who work for you most enjoy.
Perhaps most of all, you should consider the negative effect a difficult, unpleasant, or underperforming employee can have on the whole team. Address those issues promptly because the fun people have at work is a big part of what keeps them there.
4. A good relationship with you
Yes, that's right. Having a good relationship with the boss is a key component of job satisfaction. Nineteen percent of employees said their "Relationship with management/employer" was their greatest frustration at their jobs. And 13 percent of those who loved their jobs said that relationship was the reason why.
Of all the things you can do to create greater employee satisfaction, this is the easiest to address. It's also the most important, because improving on issues of culture, advancement, and camaraderie in the workplace begins with honest dialogue between you and the people who work for you. You need a good relationship and a sense of mutual trust for that dialogue to happen.
So if you've been too caught up in the day-to-day pressures of managing your business to spend time bonding with your team, it's time to change those habits. Make time to talk with each of them, either informally or formally. Find out what they care about most and what would most bring them satisfaction on the job. It may seem like a big investment, but it will pay off in happier, more engaged employees--who are more likely to stick around.