Paychecks are great. Really great. And raises are even better, especially in inflationary times. But are monetary benefits like wages and salaries, or fringe benefits like medical insurance and paid vacation, the only things that can contribute to the experience team members have by serving one organization and not another?
Stated another way, is it worth it for employers and managers to ensure employees have great experiences at work? We focus a lot on making sure customers have excellent experiences. We rely on their loyalty and hope they share their good experiences with potential consumers and clients. We want to be celebrated on social media, not scorched. And perhaps, ironically, customers who start with a bad experience can prove more loyal than those who have good ones. That is, if the bad experience is handled well.
Of course, customer service has limits—and so do customer service budgets. But successful companies tend to do well with customer service when they discern which activities have high return on investment: It’s usually worth going the extra mile for a client if she returns the favor with something worth more to you than the mile you invested. You may have heard of restaurateur Bob Farrell’s goofy yet memorable advice that, when a customer in his restaurant asks for an extra pickle, his response is to always “Give ’em the pickle!” Pickles don’t cost much, and it’s not worth refusing an extra pickle when someone asks nicely.
Maybe firms need to think about the employee experience along the same lines: If there’s an opportunity to give one of your team members something that doesn’t cost much but makes them feel valued, then maybe such efforts are worth the investment. To be sure, raises make workers feel valued. But raises are expensive, especially once you add everything it costs to pay one of your team members one more dollar—in terms of Social Security contributions, unemployment insurance contributions or other any other costs related to that dollar.
But money isn’t the only thing keeping great workers on your team. Every year, Fortune magazine and Great Place to Work collaborate to identify the 100 Best Companies to Work For. Rankings are based on surveys of 870,000 employees and employee data that includes over 6 million workers. And the main criteria driving the list are, in most cases, things money simply cannot buy, such as high levels of trust, respect, credibility, fairness, pride and camaraderie.
Of course, Fortune’s annual 100 Best Companies list isn’t the only game in town when it comes to assessing quality workplaces. In fact, Gulfshore Business is now partnering with the Best Companies Group (of Harrisburg, Pennsylvania) to launch its own annual list of “Best Places to Work in SWFL.” In either case, the assessments agree on this: Money is great, but it’s not the only thing that makes a good place to work a great one.
In economics, we assume all decisions are made at the margin. This is a fancy way to say that when a candidate is weighing two offers, or when a member of your team is being recruited to go elsewhere, what ultimately matters at the moment of decision is how well one opportunity compares overall to the other. And sometimes little differences make a big difference.
Consider this simple thought experiment: You have two competing job offers paying equally, but one firm is widely known to have a culture providing high levels of trust, respect, credibility, fairness, pride and camaraderie, while the scuttlebutt is that turnover is high at the other because it doesn’t take such cultural issues seriously. Which would you choose?
Paying workers well is one way to make them more productive and to attract other great talent. And they will love you for it. But sometimes, we forget money isn’t the only thing driving the eventual decision at the margin. And in our post-Ian economy, what workers might really appreciate is an honest effort to understand the particular challenges they each face right now, and being accordingly flexible when possible.
Treating your people with dignity and respect, and hearing what they say when they talk with you, is valuable to them. And it doesn’t cost a lot of money.
Victor V. Claar is an associate professor of economics in the Lutgert College of Business at Florida Gulf Coast University. He also serves on the research advisory council of the James Madison Institute and the board of the Freedom & Virtue Institute.
