Saturday, March 30, 2013

Organizations, Leaders Should Pay to Retain

     Justin Verlander signed a 5 year extension worth $80 million to continue to play for the Detroit Tigers. The first thing that ran through my mind was wow that's a lot of money to pay one individual. That total is staggering to pay a person to stay with the organization to deliver the usual, high quality work that has been always delivered.

     This led me to a second thought which was the Detroit Tigers paid a current employee more money so they could continue to be successful rather than sign another player to replace him or to scout new talent they could groom for the future. This organization retained an employee by paying more now to save costs in the future. What an interesting concept.

     Thought number three for me was then why aren't more organizations following this model? I'm not saying that millions of dollars should be paid out to current employees. The dollar amount should be generous but realistic to the position and business revenues being brought in. The point is that leaders and organizations should look at paying current employees more money than what is usually doled out at year end evaluations or through performance bonuses. Spoiling current talent on your roster would be a pleasant surprise that would help decrease attrition, and increasing retention for those higher quality individuals. Am I wrong for feeling this way?

     As I thought about this more I realized that organizations expect more from their employees. More work needs to be completed using fewer resources to accomplish this. This may come in the form of receiving more work with an increase to responsibilities because of attrition, mergers, or more work coming into the company. These expectations of more work may come in the form of being on the clock outside of the usual, traditional work space. Being on call or working additional time outside of the usual 8am-5pm, Monday through Friday workday. More work expectations exist yet more dollars doesn't seem to flow the employee's way.

     I think organizations and leaders, at times, falls into gladly paying more for prospective, new individuals outside of the organization than paying to retain their own talent. Leaders, when interviewing, for open positions looks for candidates that offer everything they ever needed and pay more to bring aboard this "new toy", pardon my expression. People that tell leaders they can offer more of the skills they are searching for will be paid handsomely while current employees are at times taken for granted and paid modestly. This is my "new toy" theory. Leaders fall in love with the new toy out in the stores, pay an exorbitant amount of money for this toy, and cast away current toys to the corner of their rooms.

     I challenge leaders and organizations to break this model and line of thinking. Do what the Detroit Tigers have done. Identify irreplaceable, talented, current employees and pay them a little more money than business traditions dictates to simply retain them. The extra money being offered can be saved in recruiting, hiring, and training costs. Realize that a known commodity can be more valuable to revenues than a prospect can. Known talent can relieve leaders minds compared to wondering if that new prospect will pan out based on an interviewing process. Is it so wrong to want, expect more money if you're a tenured employee to deliver great work? I don't think so.


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