Hello Roop. There are two parts to my answer about your problem in retaining existing workers. Firstly, what are the facts? How do you know that people are leaving for higher salaries elsewhere? Do you conduct exit interviews? Or employee satisfaction/engagement surveys? They may be leaving for any number of reasons related or unrelated to salary? So, first ensure that you are “fixing” the right problem.
Secondly, once you determine for a fact that they are leaving for higher salaries, review your work culture. Money is just one retainer. Other job factors that lead to job satisfaction and retention are:
-meaningful work
-challenging goals
-treated respectfully
-involvement in decision-making
-having friends at work
-honest and helpful performance feedback
People do not just work for money. Beyond a salary that is not too far below market expectations, these are the factors that keep people turning up for work each day. Find out from your existing employees what they like about their jobs (and do more of it) and what they don’t like. Conduct individual interviews or run a survey. Look up the work of Towers Perrin. They have done a lot of work in the area of employee retention. You can also find our more about how to
motivate employees at our HR web site at
http://www.businessperform.com/html/...anagement.html
To finish off, some level of turnover is unavoidable and is in fact a good thing as it introduces new ways of thinking and doing to the organization. Find out what level of turnover is typical for your industry. Is yours higher or lower? If it turns out that your level of turnover is detrimental and is caused predominantly by poor salary relativities, then have a strategy for moving salaries in the right direction. First tie salary to performance with a well designed and implemented performance management system that rewards teamwork and high performance. There is no point in trying to keep existing workers that are not performing.
Secondly, have a strategy for moving existing workers incrementally to market rates (redlining) and communicate this well to all workers. With large salary discrepancies, keeping salary levels confidential takes a lot of work and only breeds an atmosphere of suspicion and distrust. By tying salaries to performance, you will be able to pay for the increasing salaries through greater efficiencies and output. The two systems (redlining and pay for performance) will need to be well-integrated. For example, pay for performance will need to be less lucrative for new employees until the salaries of existing employees catch up.
I hope this is of some help to you.
Les Allan
Business Performance P/L -
HR Resources http://www.businessperform.com
