As the economy continues to improve, and labor gets tighter, wages start to rise. It’s inevitable, and that reality sends shock waves of fear through the small business community. After all, they can’t hope to compete with the big players in their industries, and let’s face it, the lure of a significantly bigger paycheck can be all but irresistible. How then, do smaller companies compete, if they want to keep their best talent?
Small and medium-sized companies are cauldrons of innovation. They have to be in order to survive. Of course, big businesses co-opt the best ideas generated in the ever-churning small business laboratory, but the fact remains that much of the innovation we see in this country comes directly from small to medium sized businesses, and that includes non-monetary compensation strategies.
One of the very best methods you can use to keep your people is autonomy. It’s actually amazing, the disconnect between what we know about motivation, and how we apply it in the real world. You’ve probably heard, and perhaps even structured your entire business around the idea that more pay = better performance.
Actually, that isn’t true at all.
In fact, the only time it is true is for purely mechanical tasks. Assembly line tasks. In that specific case, better compensation delivers superior performance, but the moment that a task requires even rudimentary cognitive skills, it either has no impact at all, or in many cases, actually decreases performance.
The key is to pay enough to take money off the table. A salary good enough to live on. After that, you make up the difference by giving your people autonomy. Control over their schedules and their work day. In its most extreme form, some companies don’t have any rules for their employees at all, including no set schedule and optional meeting attendance. The only requirement is that the work get done and be completed on time. How that happens is left entirely to the employees themselves.
Obviously you don’t have to go to that extreme, but the bottom line is, the more autonomy you give your employees, the better they’ll perform for you, and the more likely they’ll be to stay, even if offered a higher salary. That’s heartening news.