digital divide network - article database

As costs are increasing, it has become a common strategy for businesses to cut down on labor costs to compensate for the potential losses of their profits. However, regardless of the economic situation of your business, lowering wages is a choice and not a necessity. There are businesses which have benefited from paying their employees more because it has resulted to increased sales and productivity. The reason behind their success is because employees who are paid well are more encouraged to work and perform better. Therefore, while other competitors suffer immensely from the economic meltdown, businesses which pay well are still continuously growing. Listed below are the reasons why well-paid workers are good for businesses.

1. Provides encouragement- When you pay your employees well, they are more encouraged to work and they work harder and perform better to make themselves feel deserving of their pay. On the other hand, if you decide to lower your employees’ salary, it may result to operational problems and decrease in sales due to the lack of enthusiasm and support from employers. Aside from those, it is important that you not only focus on your high-level employees but on your entry-level employees as well. Giving them a solid living wage will increase productivity and improve the business’ bottom line.

2. They attract, motivate and help retain employees- Having a good compensation philosophy will help your business attract, retain and further motivate employees which will result to excellent job performances. To accomplish these goals it is important that you provide different forms of compensation. One is the base pay or the employees’ salaries, second is the incentive pay whether in the form of cash, products or gift checks, rewarded to employees who perform well or to those who manage to increase their sales and third are the benefits which include medical and dental services and retirement savings plans.

3. Maximizes employee productivity- When businesses decide to lower employee wages, employee turnover will most probably be at a fast rate. And when employee turnovers are moving at a fast pace, employees will never be encouraged or will never decide to stay long enough with the business mainly due to their low wages. A practice such as this will negatively affect productivity which in turn will not be beneficial for the business. On the other hand, if businesses decide to pay their employees well, employees would be more likely to stay with and would be happier to be working for the company. In general, it is more profitable for a business to maximize their employees’ potential and productivity to minimize employee turnover.

4. They take care of the business- Taking good care of your employees translates to how well you pay them. If you pay them well and provide them benefits they are more likely to take care of the business making sure that all obligations are fulfilled and responsibilities are tended to.

5. They socialize more- Well-paid employees are more probably to have a positive disposition because they worry less. As a result, they form a solid bond among other employees and their positive disposition makes them friendlier and supportive towards clients or customers. They become more approachable which can increase sales as well as profit.

6. To have a motivated workforce- Employees will find it hard to feel good about their jobs if they cannot see the effort of their employer to take care of them and to motivate them. Of course, compensating them well is a form of motivating them; however, if you do not recognize their excellent performances as a result of being paid-well, then they could backslide and lack the enthusiasm they once had for their jobs.

7. They feel rewarded and appreciated- Retaining employees instead of hiring new ones is beneficial to a business. Therefore, when you decide to pay your higher-level employees more instead of paying entry-level employees lower salaries, they feel rewarded and appreciated and they will more likely make an extra effort to perform better on the job and they are encouraged to stay with your business.

8. They help create a positive environment- Taking good care of your employees whether in the form of compensation or benefits will help create a positive work environment. The more positive your work place is the more productive and the more motivated your staff will be.

Contrary to the common practice of lowering wages of businesses these days, paying your employees more is a much more beneficial move to minimize employee turnover and maximize their productivity instead. You can even do a credit score check to track your business’ improvement and progress. Just make sure that you become a supportive employer yourself so that you can exude positivity for the good of your entire workforce.