Page 92 - Retaining Top Employees

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80 Retaining Top Employees

Why Compensation (Almost) Doesn’t Matter

Why doesn’t simply paying well solve the retention problem?
For two reasons.
As any good salesperson will tell you, a sale on the basis of
price alone is the worst kind of sale—it establishes no buyer-
seller relationship, beyond that of price, and as soon as some-
one offers a better price, your customer is gone. It’s the same
with the employer-employee relationship. Establishing that rela-
tionship on the basis of compensation alone turns your employ-
ee into a mercenary for hire: the next organization to come
along with a better offer will prove a more attractive proposition.
Compensation is essentially a satisfier, not a motivator.
Adjusting it has a one-time, temporary effect on the employ-
ee—not a long-term, sustained effect.

Satisfiers Versus Motivators
Frederick Herzberg’s satisfier or hygiene theory states that there
are certain things that make employees unhappy by their
absence, but that, once present, lose their motivational effect.
Here’s a simple example. It’s a sweltering afternoon; the
employees are hot. The boss decides to go out and buy every-
one an ice cream. Production rises. Thrilled with the result, the
next afternoon, he buys two ice creams apiece. Will production
double again? What if he buys three ice creams for each
employee? 10? 100? The ice cream is a satisfier. It has a one-

Satisfier Factor that is necessary to prevent job dissatis-
faction.Also called hygiene factor.
Motivator Factor that causes job satisfaction.
These terms come from Frederick Herzberg,the researcher men-
tioned in Chapter 1. Herzberg showed that satisfaction and dissatisfac-
tion at work nearly always were the result of different factors,not sim-
ply opposite reactions to the same factors.
In the Herzberg model,satisfaction is the result of motivators like
opportunity for advancement,recognition,responsibility,advancement,
etc.,and dissatisfaction resulted from satisfiers or hygiene factors such
as physical work environment,company policies,and salary.