The Power of Fair Compensation: Attracting High-Performers Increases Quality and Reduces Supervision Costs
We have written in the past about the importance of constantly recruiting and hiring for integrity. However, I was reminded recently about the many “costs” that our competitors incur when they under-compensate associates and why those under-compensated associates require much higher levels of supervision.
When you are willing to pay everyone a fair and competitive wage/salary along with a performance-based bonus, you are able to hire and retain great people, you will get good project results, and you will have very few (project-related as well as behavioral/personnel) problems that require significantly more supervisory energy. And because good people enjoy working with equally good people, your good people act as constant peer supervisors of each other. In these “self-policing” environments, low-level performers will quickly be “washed out” of the company by your high-performers. The same goes for associates in the office and with management.
However, if you are not willing to pay everyone a fair and competitive wage/salary and do not have an incentive program such as a performance-based bonus, it will be difficult to hire and retain great people, and the associates you are able to hire will require significantly more attention from your project supervisors because of the lack of peer-supervision. These additional supervision expenses added to what can be significant financial and reputational costs due to poor project results that are directly related to poor performers, will end up costing you more financially over the longer term than maintaining a fair compensation program with incentives.
At Standard, we pay fairly and we have a performance-based compensation plan in place that every Standard employee can benefit from. We have found this strategy pays dividends in a number of ways including quality workmanship and higher levels of customer satisfaction during interactions with on-site associates as well as office staff. The final product and the customer support that is provided leads directly to our ability to earn the trust of our customers. And when a customer trusts your organization to always do the right thing, they will recommend your company to others and are happy to serve as a reference. When the opposite is true, and customers don’t trust your organization to do the right thing, it is highly likely that they will not be comfortable recommending you or be willing to provide a positive reference.
So, it’s simple — EMPLOY THE BEST, AND LET THEM DO THEIR JOBS.
If you have any questions or comments, please email me, Pete Taylor, Chairman of the Board and CEO of Standard, at: firstname.lastname@example.org.