Does it demoralize high-achievers?
How much should people earn in their job? Even if resources are unlimited?
Conventional wisdom says higher pay produces better results because of greater job satisfaction. You’ve heard that, right? Surprisingly, the data indicates otherwise.
An article published in the Journal of Vocational Behavior, where the authors reviewed 120 years of research from 92 quantitative studies with a combined dataset of 15,000 individuals, indicates the association between pay and job satisfaction is very weak (not just weak, but very weak).
The researchers found that money does not buy engagement because, according to a Gallup study of 1.4 million employees in 34 countries in 49 different industries, there was no significant difference in employee engagement by pay level. So, if we want employees to be happy in their jobs, more money is not necessarily the answer.
And yet, we’re told by our elected officials, time and time again, that across-the-board pay raises and onetime bonuses to federal, state and local government employees are needed to improve morale and ensure quality services for our communities – even though the link is very weak, according to the data.
Government pay raises are being instituted all over, nonetheless. Arkansas Gov. Asa Hutchinson approved pay raises of as much as 3% for state employees. Alabama Gov. Kay Ivey proposed a 2% pay increase for Alabama state employees. The Tennessee state legislature just passed a budget that includes 4% raises for state employees.
And President Biden has formally proposed an average 2.7% pay increase for federal civilian employees in 2022, not to mention he signed an executive order directing federal contractors to pay a $15 minimum wage for their workers starting next year.
Biden said, “This executive order will promote economy and efficiency in federal contracting, providing value for taxpayers by enhancing worker productivity and generating higher-quality work by boosting workers’ health, morale and effort,” said a fact sheet from the White House.
But there is absolutely no evidence of such.
Even the city of Shreveport is looking to raise the minimum wage for employees to $13 an hour. Mayor Perkins said this is the “first step in a comprehensive effort to improve the earning wage for city employees and to deliver better service to all of Shreveport.”
But again, where is the evidence that better service will result?
You see, what’s missing in all of these calls for blanket pay raises across the country in government is not just the taxpayer money to do so, but the lack of any real progress – or interest – to develop an effective performance appraisal system of government employees that gives honest feedback, and provides meaningful differentiation between the high-achievers and those who work just hard enough not to get fired and get paid just enough money not to quit.
Why is it that some folks just don’t get it? Because if any organization (not just the government) doesn’t have an objective employee evaluation system to get rid of low performers and reward high achievers, we’re just rewarding mediocrity – plain and simple.
Yes, you can hire better people with pay raises, attract better job candidates, etc., but you still have to deal with those whom you already employ and who simply are not doing the job that needs to be done.
And not only that but study after study shows retention of an organization’s best and brightest decreases in the long run whenever blanket pay raises occur. This is because there’s a demoralizing effect on the high achievers in any organization because they feel their efforts to go above and beyond aren’t recognized when those who didn’t make the effort were rewarded, nevertheless.
To add insult to injury, not only does your most loyal and best employees feel unappreciated, but a blanket pay raise makes it even more unlikely that these best and brightest will have any chance of receiving a pay raise themselves anytime soon, based on their merit (because now there’s even less money available in the budget to do so after the blanket pay raises to everyone else).
Maybe this is why President Trump had called for a federal hiring freeze and an end to automatic raises and to make it easier for our federal government to fire poor performers. As Trump’s White House press secretary expanded on this subject at the time, “Some people are working two, three jobs just to get by. To see money get wasted in Washington on a job that is duplicative is insulting to the hard work that they do to pay their taxes.”
And he’s right. If we are going to continue talking about blanket pay raises, shouldn’t we be talking about the effects of doing so, other than to one’s own bottom line?
As Winston Churchill put it, “We make a living by what we get, but we make a life by what we give.” We’d all make this world a better place if we remembered that more often – even without a pay raise.
Louis R. Avallone is a Shreveport businessman, attorney and author of “Bright Spots, Big Country, What Makes America Great.” He is also a former aide to U.S. Representative Jim McCrery and editor of The Caddo Republican. His columns have appeared regularly in 318 Forum since 2007. Follow him on Facebook, on Twitter @louisravallone or by e-mail at email@example.com, and on American Ground Radio at 101.7FM and 710 AM, weeknights from 6 - 7 p.m., and streaming live on keelnews.com.