Excellent question. Using money as an incentive to stay is actually quite complex and situational.
Ever been in a job where you just wouldn’t stay with that employer regardless of how much you were paid. I certainly have. What this tells us is that there are factors beyond pay increases that determine if we will stay or leave our jobs.
We know from research and it’s been backed up by my experience that, the number one factor that matters to employees is: the conditions in which they work. This also impacts on the motivation level of the employees in that workplace.
What do I mean by conditions
Namely how staff feel treated by their employer and how that is evidenced by the workplace practices.
For example, employees that feel a sense of respect and loyalty by their employer to them will happily accept less pay because they feel valued in other ways.
In a great environment employees are more accepting the highs and low of business and will actively want keep their jobs by doing a good job. They know that not all employers provide this great care and support for them.
Now on to the pay question
Aside from the great environment, which really means the sort of place you’d want to work if you were them, I would encourage you to chat with the employee about 2 things.
What more value can bring the employee bring to the business to support a pay increase?
This isn’t about loading the employee up with more tasks to get more from them. It’s about encouraging them to step up to a higher level of performance that will benefit the business and you.
If I was coaching you as the manager in this situation I’d start by asking you what lower level work you or others currently do that you could pass on to this person.
This way we can make you more efficient, free you up and ensure the business is paying the right sort of dollar for the work being undertaken.
For example, if you said “I do the rostering and it takes me a few hours a week”, I’d ask you to put an hourly rate on your time and then work out the right wage increase to pass this responsibility on to the employee.
What’s most important and valuable to the employee, than cash
The second thing I’d encourage you to do is to get to know what the employee really values.
Nearly every employee I’ve come across will answer this question with time away from work, not money.
The only exception is sales people – they are intrinsically motivated by money, which is what we want from sales people and that is the best reward for them.
If you are unable to provide the pay rise, then think about giving the employee some paid time off. A great starting place would be a monthly day off (a rostered day off). Scheduled days off can also reduce absenteeism because staff can plan ahead with appointments / events.
There are plenty of ways to meet the needs of both the business and the employee in this situation. I hope these examples have given you some food for thought.
Have a great week and next week’s question is: How do I get the promotion and the pay rise?
All the best,
Human Resources & Leadership Strategist
I solve workplace issues quickly and positively and I coach leaders to do the same