John Stancavage: Study shows pay keeps balance
BY JOHN STANCAVAGE World Business Editor
Sunday, November 11, 2012
11/11/12 at 6:20 AM
Now that the Great Recession has eased, many employees are enjoying pay raises again.
Compensation, including benefits and perks, remains a sensitive issue, however - one that many companies still struggle with.
The goal is not just keeping your best talent but keeping them happy.
An employee who is satisfied in his or her job - who doesn't see it as a chore or sacrifice - most likely will be more productive and valuable. They also will probably be happier at home.
Pay, a new study says, is the key element that closes the loop and brings everything into balance.
The report, written by a University of Illinois labor and employment relations professor, found that employees who are more satisfied with their salary also have lower levels of work-family conflict.
Amit Kramer says that employers need to realize that it's not only the amount employees make, but also how that total compares with their peers.
"Pay, as you might expect, is a relative thing," Kramer said in a University of Illinois News Bureau interview.
"I think most people would agree that a certain level of pay that allows you to meet your needs is critical. However, beyond that level, relative pay becomes an issue."
Kramer, who co-wrote the study with Devasheesh P. Bhave of Concordia University and Theresa M. Glomb of the University of Minnesota, says this is the reason pay raises don't always satisfy or motivate employees.
"I'm not sure that the effect of a pay raise lasts very long," he said. "It might have a short-term effect on pay satisfaction, but .... the way individuals evaluate their pay is by comparing (it) relative to their co-workers' pay, relative to the effort they put in and relative to what they sacrifice in order to work."
Even highly compensated employees can suffer from serious work-family conflicts if they perceive pay inequity among colleagues, the study found.
Employers can address the problem in a number of ways, including:
Since new technologies allow many employees to be available anywhere, anytime, offering more flexibility along with competitive pay can help retain employees.
- Obtain independent surveys to make sure salaries are as good or better than the rest of the industry.
- Increase paid vacation days. Time off can be as sought after as a raise.
- Try compressed workweeks. For example, see if a 10-hour-a-day, four-days-a-week schedule would work for certain employees.
- Offer flexible work arrangements.
"(It) would allow all employees - not just those with families - to better balance work, family and life demands as they see fit," Kramer said.
Original Print Headline: Study: Pay keeps life in balance