SMEs : The Importance of Fair Remuneration in Creating an Engaged Workforce

Money is an essential aspect of our lives, despite its negative reputation. It takes care of our basic needs, allows for future planning, and provides security. In the context of employment, the amount a person is paid can influence their decision to apply for a job and their level of engagement.

Key Points:

1. Remuneration and Engagement: While money alone cannot buy engagement, it plays a crucial role in creating a workplace environment that fosters engagement and competitive advantage.
2. Value and Trust: Employees assess their self-worth based on their remuneration. Underpaid employees may feel undervalued, leading to decreased engagement and trust in the employer.
3. Market Rates and Trust: Employers who do not pay competitive salaries may lose the trust of their employees, who may question their ability to make other important business decisions.
4. Critical Two: Remuneration, along with wellbeing, is essential for achieving healthy levels of engagement in SMEs.
5. Complex Topic: Developing a good payment strategy requires knowledge of market rates, understanding internal relationships, and monitoring cash flows and profit projections.
6. Risk and Running a Business: Sometimes, making the right appointment requires paying a salary that relies on accurate profit projections, which can be risky for a business.
7. Lessons Learned: The founders of a company realized the importance of clearly communicating their employees' financial expectations and not expecting them to make the same sacrifices as the founders.

In summary, fair remuneration is crucial for creating an engaged workforce. Employers must understand the relationship between pay, value, and trust and develop effective payment strategies to ensure employee satisfaction and performance.

The above content is from "Mastering Small Business Employee Engagement: 30 Quick Wins & HR Hacks from an IIP Platinum Employer" by Barry Phillips and Jayne Gallagher which is available from Amazon:

https://bit.ly/3rm4CGV