The importance of an appropriate income

Having a job that has meaning is the most important aspect of work today.

Have you heard this phrase before? It became common in the recent past that money is not the most crucial reason anymore to decide in favor or against an organization, a workplace, a job. Still, in most cases, these statements come from well-qualified people who are well qualified, hold good and well-paid positions. These people will always be in demand.

How important is the aspect of income for the majority of employees?

How can your organizations avoid mistakes and make the right choices for this critical aspect of the business?

Transparency

Do you remember when someone told you that it is not common to talk about your income inside or outside the organization? If no, good. If yes, welcome to the reality we still see in today’s world. This attempt of silencing people never succeeds. When an organization tries to sanction an open discussion about income, it will face more problems than those organizations which openly practice full transparency.

First, you cannot tell people not to talk about their income.

Second, they have the right to do so, and telling them not to makes the situation worse, not better.

Third, when you start a job at an organization and they, from the very beginning, tell you that it is not allowed to discuss your income with others, which impression do you get? You most likely will think that income inequality is common practice in this organization.

Practice transparency in your organization. The more, the better. Otherwise, rumors will spread and create an issue with your organization’s productivity.

Career

When talking about career progress, avoid the phrase “You can work your way up” or “in the future, you may have my job”. These statements are too general, not specific enough, and also not credible at all. In hardly any organization in today’s working world, you find a C-level leader who started as an apprentice. Some exceptions may apply. However, the general skill in developing the right people from the bottom to the top of the hierarchical pyramid is poorly designed, so you will hardly find it in real-world practice.

Talk about specific steps and career paths to which people can stick. Tell them how to qualify for these steps, which expectations should be met, and show in detail all the benefits of career progression in your organization.

Refrain from sticking to old-fashioned formal requirements, which often tell you more about the social upbringing of a person than about their skill. Of course, formal qualifications may be good guidelines for a first impression. Still, only in very few jobs, legal requirements tell an organization only to hire people with a specific qualification. In even fewer cases, you can determine that an excellent formal mark on a degree means that candidates can interact with your customers or internally. Hire for skills, promote for attitude (meaning: promote people slightly earlier than they expect it, so you can prevent them from starting a job market comparison once they realized that promotion is overdue).

Structure & Culture

Your payments, income, and salaries must reflect the organizational culture you want to implement. You can offer a fixed flat salary, a base salary plus bonus, or a commission-only payment per job done for the same position. The decision will have a severe impact on your organization. Communication, conflict management, team building, and teamwork, how people deal with each other, and how to lead and manage them — all these aspects, to name a few, will be affected by your decision.

To avoid injustice, always be transparent and offer any salary or payment with a structure that explains how you conclude the amount you offer.

Structure and culture will then determine how successful your approach will be.

More about salaries and income
in this week’s podcast: click here to listen and learn.