How much do your employees make? Not enough, so they think! According to a survey by Salary.com, 57% of workers who are planning to look for a new job are leaving because they feel that they are underpaid. However, only 19% of these workers are actually underpaid according to the survey. In fact, 17% of those employees are overpaid.

Generally people don’t understand how their pay is connected to their industry or personal performance. Communication is the key to combating the illusion of being underpaid and the discontent that it creates. In a 2002 Mercer study, 74% of employees were satisfied with their jobs when they understood how pay was determined. Of those who didn’t understand their compensation plan, only 42% were satisfied with their job.

Suggestions:
Create a compensation plan based on measurable goals and industry standards.

Explain the plan to your employees.

Refer to your plan when awarding raises and making offers.