I’ve been in management for 20 years and nothing demoralized good employees more than them seeing other employees, who didn’t contribute as much as they, getting more or less equal compensation. Even worse, when you bring in new employees that start out making about as much as those who have been loyal to the company for years. You try to keep compensation confidential but somehow, word always gets out.
You try to keep compensation confidential but somehow, —
And that makes it worse!!!!
I worked for large family owned grain company years ago. Employees were eligible for two different salary increases on their anniversary date. One was a standard increase based simply on completing another year and was a small percentage increase. The other was a merit increased based on completing certain agreed upon goals and overall contributions. Then five years in the older family members retired and the younger ones took over. Everyone got the same increase after that once a year, often as low as 1 percent. Productivity went in the dumper, error rates increased and lots of hardworking, knowledgeable people left. Took me a couple of years but I also left and started my own company in a totally different line of business.
I decided to go with merit increases only but gave them in a lump sum once a year. Employees really liked it because it gave them a chunk of money to spend at one time. Had employees leave over time but it was never because of money or responsibility level.
Compensation is never confidential. to keep your rate of pay confidential screws other workers.