Why Valued Employees Make You More Money

If you value your employees — really value them, as individual human beings and not as mere things or numbers — they will respond by making you more money. They will make you more money even if you give them higher pay, although higher pay might not necessarily translate into greater employee productivity.


You see, if you’re like the vast majority of employers and business executives, you’re convinced that what makes employees happy is higher pay, or at least better benefits. Your thinking pattern goes something like this: If you work your employees to the bone, eventually their hard work will make you bigger profits. And, once your business has those bigger profits, you will then be able to afford to pay your employees more money, provide them with better benefits. And then, they will be happy, as you, too, will be.

Consequently, you drive your employees as hard as you can, drive them to the edge, convinced that they will be hungry and eager to do whatever it takes to earn that bigger and better pay, maybe with a couple of “perks” thrown in.

The problem here is not that you are a mean-spirited curmudgeon who doesn’t give a dead bat’s butt if their employees are happy. The problem is that you aren’t listening to what really makes them happy. It seems to make all the sense in the world that higher pay equals a happier employee, doesn’t it? However, here’s a situation where you have to see through seeming, and engage in some “contrarian” thinking.

In Business, Money Doesn’t Buy Happiness

What makes employees happy is feeling valued. And when employees are already happy, they are going to work longer hours and with more intense focus — not because it’s demanded of them by you and your management, but because they desire to. They don’t even necessarily need to earn a raise from this extra effort. They want to feel like they matter, personally, to the company.

According to research firm Twenty Four 7, 90% of unhappy (that is, undervalued) employees are looking for an opportunity to change jobs (some more actively than others), and unhappy employees are 11 times more likely to be in a different job with a different company one year from now than happy (valued) employees are.

You know all about the high expense of finding and hiring new qualified employees. And, think about this: if an employee feels more like a slave than an independent, highly valued human being, is he really putting in all that he has to offer when he’s on the job?

Be a Company that People Love Working for and Rake In the Big Money

According to clinical psychologist, business trial consultant, and best-selling business author Dr. Noelle Nelson, what’s proven is that “companies that effectively appreciate employee value enjoy a return on equity and assets more than triple that experienced by firms that don’t. When looking at Fortune’s ’100 Best Companies to Work For’ stock prices rose an average of 14% per year from 1998-2005, compared to 6% for the overall market.”

Dr. Nelson loves the story of Paul O’Neill, who became the CEO of Alcoa, the world’s leading aluminum processing company, in 1987. O’Neill shocked and awed his board of trustees by immediately declaring that the only thing he cared about as CEO was making the working conditions safer for Alcoa’s employees. Why did he say this? Because he knew that safety was the number one overall concern of the company’s employees.

When O’Neill left Alcoa a decade later, the company’s annual income (adjusted for inflation) was over 500% greater than it was when he took over in 1987.

Doing things like making working conditions safer or more comfortable; giving extra paid time off as a reward for big productivity; helping customer reps to have better tools for dealing with rude, ignorant customers; and having executives personally recognize a highly productive employee, and actions like these, are what make employees feel valued.

And as Dr. Nelson puts it: “If you’re doing well, share.”

Karl Camm is an avid supply chain solutions enthusiast. Karl focusses on the Asset Management Services industry primarily in Australia, New Zealand and across the Asia Pacific