Corporate Finance Insider

What do employees want?

Finance leaders should take steps to provide more than just a decent salary to develop and retain staff.
By Jim Lindell, CPA, CGMA

To increase productivity, profit, and employee satisfaction, a business must understand and meet the needs and wants of the employee. If organizations have not gone out of their way to inspire, comfort, and educate employees during this time of difficulty, employees may be ready to bolt for the first reasonable employment offer that comes their way.

What do employees want? Here’s a list of five things, with details on each one:

Meaning

  1. Belief in purpose. Employees who believe in the mission of the business already have a strong affinity to purpose. The reason not-for-profits can attract employees is that the not-for-profit is perceived as “doing good” for a specific community.
  2. Belief in vision. Regardless of the organization, employees must believe that management is leading them somewhere. As we exit the recession, employees are looking for management to “paint a picture” of how the business will flourish and how employees can reclaim lost wages and benefits.
  3. Contributing to the benefit of mankind. This concept is strongly tied to the belief in purpose. However, there must also be evidence that the product achieves a greater good than just serving the customer.

Control

  1. Responsibility is the act of completing the assigned tasks or project—for example, the manager charged with delivering the service or product in three months. Responsibility will involve achieving milestones or goals.
  2. Authority is the ability to initiate or change the project.
  3. Employees get frustrated when they do not have the authority or responsibility to affect the product or service. If we want employees to act like owners, they must receive the correct level of responsibility or authority to accomplish what is expected of them. Great confusion is created when an employee is charged with the responsibility to achieve the target but does not have commensurate authority to see that the target can be met.

Reward

Pay and bonus alone will not suffice in the long run without the other items listed.

  1. Pay—an employee must believe that he or she is receiving fair compensation. If a business claims to be its industry leader, but its competitors are paying higher wages, employees will begin to mistrust the employer.
  2. Bonus—bonuses need to meet the same standard of perceived fairness. Inexperienced managers will wrongly believe that a significant bonus can offset mistreatment incurred during the year. The bonus effect does not last very long.

There are many ways a business can reward employees. Rewards can be:

  • formal
  • informal
  • special achievement
  • team achievement

Recognition

There is no better way for management to show gratitude than sincere public appreciation for work well done. The effect can be prolonged if the remembered event can be woven into the culture of the business and become routinely shared.

If the reinforcement of an employee’s act or service can be tied to the overall purpose, the event takes on greater importance to the organization, person, and other employees.

Handwritten thank-you notes show that management took the time to recognize the significance of an employee. Consider sending a handwritten note to the family acknowledging a job well done. Employees are less apt to leave a business when encouraged and complimented on their success.

Balance

If an employee is having difficulties at home, he or she will bring the problem into work. Therefore, the business should do its best to balance work needs so that it is not creating strife at home that will eventually bounce back in the work setting.

A burned-out person is not helpful. Employees must have outside activities to reenergize. An employee who never vacations is similar to a car that does not have its oil changed: an engine “seize up” is in the future.

Editor’s note: Excerpted from Controller as Business Manager, copyright 2014, AICPA.

Jim Lindell

Jim Lindell, CPA, CGMA, is president of Thorsten Consulting Group, and is a former CFO and controller.

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