Paying Employees Fairly

Let me ask you a difficult question.

Let’s say you are paying an employee fairly for their position compared to what others are paying. But let’s say that employee is still struggling to make it financially. Should the employer pay more?

I have really struggled with this question. I want to be the kind of employer that supports the needs of employees. I know if an employee is worried about their finances, it will be hard for them to concentrate.

So, we have done a number of things to help our staff out from financial coaching to actually finding and furnishing a home for an employee who became homeless. That’s the kind of employer that I want to be.

On the other hand, we still have to run a business. If our costs become higher than our competitors, it will become hard to be profitable to ensure the long run stability of the business. It doesn’t help any employee if we go out of business.

So, where is the balance?

It’s a question I have often lost sleep over.

Here is the principle I’ve been using to guide my thinking. If every employee saw everyone’s pay, including my own, would I be embarrassed? Would I be able to reasonably defend what everyone is making?

If I would pay one person more because they need it more, how would others feel? How would a top-performer feel if they made less than a low-performer? I would have a hard time defending that.

So, I’ve slowly moved to the position that everyone needs to be paid fairly for their position. This means that people won’t get paid more because of need, they will only get paid more if they produce more.

But how do we then help those who need the help? I’ve been trying to do it in more creative ways. For example, I have been offering to help manage finances. So often people aren’t taught how to manage money well. If they learn a few tricks, it’s amazing how much their expenses can be reduced. I’ve also been helping in personal ways outside of the business.

What do you think? How would you handle this?

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