Hygiene Factors

Do you remember your first pay rise? Three months into my first job I went through a probationary review. My thoughts were pragmatic; would they keep me?! My starting salary was the then typical graduate entry level package. I passed the review and to my astonishment was immediately given a pay rise of £1,000; 25%!
Over the next two and a half years I doubled my salary as I was promoted, gained extra responsibility and tripled the sales and profits of my product ranges. But none of the subsequent promotion or merit awards ever matched what I gained at the end of that first probationary review.
Pay, as students of HR will tell you, is the top “Hygiene factor” on one’s journey to self-actualisation

The famous Maslov and Herzberg theories were first published in 1943 and 1959, respectively. By the time of my first job these theories were “main stream”. And yet my then employer made absolutely no connection between my job performance and that first pay rise. It was a huge award for merely being assessed “competent to stay”.
That £1,000 could have been split up into tranches and awarded over 12 months as I gained experience, confidence and demonstrated specific competences. Such a linking of pay to individual performance would have been “revolutionary” in an era of regular annual pay awards and % salary based profit share schemes.
Today I am constantly amazed at how companies manage to “turn off” their young recruits through pay policies. Firms take on starters, particularly in London, on salaries that leave them very little to live on after rent, travel costs and standard household bills.
Enlightened employers do offer performance rewards, often vouchers, but what our young starters need is cash to have a basic quality of life, to save for that elusive first step on the property ladder and be motivated. After all, there is a limit to what you can buy with yet another tranche of John Lewis vouchers….
Perhaps there is no longer a premium in the job market for being a graduate; particularly outside the traditional professions. And those of us at the top of firms able to influence our company’s pay policies probably only see this as a “problem” when our own children enter the job market. The bank of Mum and Dad is needed frequently to subsidize deposits and provide “loans”.
Employers today expect 24 x 7 commitment from their recruits. It is a pity that many seem unwilling to recognise that along with extra responsibility, their entry level recruits need meaningful cash merit awards as they deliver on the tasks assigned to them, strive to develop their careers and contribute to the business’s future.
It is in no one’s interest to “turn off” generation rent. Take a look at your starter level pay policies and make sure they are aligned towards motivating and rewarding performance. Regular performance reviews linked to salary increments will pay back through improved performance outcomes.