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Pay Changes Perception

In the midst of the Great Resignation, one of the things we will see is different pay scales. For example, a minimum wage retail location may feel the need to raise the starting wage to $15/hour (or more) to compete for scarce talent.

This leads to further repercussions that we often don't consider and that will impact managers. The first is that everyone's wages will go up (after all, if the new person is making $15, you can't have someone who has been there 2 years only making $14). The second is that the manager will start to treat people differently, if she isn't careful.

I worked for one company that dealt with this issue due to government regulations. The city where the stores were had passed a law that raised the minimum wage. Some people were making over the minimum wage, but some weren't and it was higher than our current starting wage. It forced us to update our wage rates so that essentially everyone got a raise. From an administrative aspect, it was a pain, but not an insurmountable obstacle.

What we didn't plan was how managers would react. Whenever they would have a small conflict with an employee, they would say something like "I expect you to do more, you are getting paid more". We were positioning it to the employee as properly realigning our pay scale, managers were acting like we gave everyone a bonus and they should work harder for it.

The result was that increased wages actually hurt retention and engagement because of how the employees were treated. No manager consciously meant to hurt morale, but they all did.

You've been warned.

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