Tuesday, April 21, 2015

It has been said, "People don't leave companies; they leave managers." There is a lot of truth to this. However, it may lead to overlooking a key element of employment: PAY.

A psychological study of why people, especially top performers,  leave a company concluded that "high job satisfaction" is a strong determinant of whether someone leaves a company or not, and job satisfaction often reflects one's relationship with a manager.

However, independent of job satisfaction is the impact of pay growth. In other words, even if someone says he/she is happy in the job, stunted or perceived lack of pay growth can lead that person to leave a job. This is especially true of top performers. This is why top performers will take the call from a recruiter and may leave a job that was quite satisfying and challenging. If pay is not seen as increasing, a better offer will entice the person to leave.

The lesson: do not ignore your top performers. Look at your compensation policies and make sure they are not equal and fair. Reward your top performers better than others. As the author of this study (Nyberg) wrote: "Managerial overconfidence could lead to situations in which employees the company most desires to retain are instead more likely to leave." Better performance...and better performers...need to get better pay. Not only will this help you keep top performers, it might also inspire some others to strive to perform better.