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The Importance of Paying People Properly

Best Practices

The principle of Equivalent Exchange essentially talks about the reciprocal exchange in value between what a person gives and receives. Such equivalency is relative to the context of such exchange. For instance, students grappling with online learning may complain about how their tuition fee pays more than the quality of learning they receive from their institution. In this situation, the principle is compromised, leaving students at the unfortunate end of this exchange imbalance.

The same goes for employment. Employees have a set of responsibilities they accomplish that, in return, provide them financial compensation, among other rewards, that is supposedly of the same value. Sadly, this expectation pursuant to such principle is sometimes unmet, and negotiations to fix this problem become sensitive points of discussion between a complaining, underpaid employee to an employer. The question here is, when a person is capable of doing work even more than what is asked for, what’s the harm in asking for the same value in return? Is such negotiation worth frowning upon? Perhaps we deserve a quick refresher on why paying employees properly is of the essence.

Firstly, it is important to further understand what salaries mean to employees. Indeed, money is just one of the factors that come into play in employment decisions. But this factor, simply stated, is a huge one. For employees, salaries are not only monetary figures, but also quantitative measures of how their companies value them. Consequently, it can make or break an aspiring job candidate’s decision on continuing her career pursuits, or even a current employee’s decision to stay in or leave a company. This then leads to another important effect of paying employees: sustaining engagement. 

Given this perceived value beneath mere numbers, the lack of it may lead to difficulties in making employees more engaged. This is evident in both aspiring and current employees. For the former, good pay is an effective way of attracting the best and most talented candidates. For the latter, employees might end up getting discouraged in contributing to the company due to the little reward they receive despite the hard work they give. Such traces back to the principle of Equivalent Exchange; since the employee is given little compared to what she gives, chances are they might give less to go down the level of what is given to her. This may be a deliberate decision made by the employee, but it can also stem from general lack of motivation that naturally leads to less contribution. A worse case of this is manifested in how pay directly correlates with the tendency of people to file leaves and departures from their company.

As a final note, it is important to remember the obvious fact that in this pandemic: people are struggling in different ways. They may be finding the remote setup hard to deal with, or some of them might be struggling to land a job. Despite these struggles and setbacks, however, they have the drive to make use of their competencies in their prospective companies they are qualified for. Paying them lower than the potential and capabilities they can offer would be a disservice to current workforce realities

In cases wherein the same employees ask for more than what is being offered, it is important to consider these few reminders. Taking offense and finding “entitlement” in a candidate’s request for higher pay is more of a reflection of the employer’s character more than the candidate’s. Moreover, having such, frankly, traditional mindset on what kind of salaries people deserve amidst modern economic conditions just goes to show how talents may still be susceptible to exploitation, to the point of shame expressed towards simple requests and inquiries of people who might just really know what they’re worth. Again, this all traces back to the principle of Equivalent Exchange; asking for what you think you deserve is harmless  — in fact, you are in the position to decline a value much less than your own. 

So, to the employers/recruiters reading this, when the time does come that a quality and highly proficient candidate comes knocking in your virtual office door and negotiates for a certain value, would your response be to take offense, simply decline and be open about your company’s budget, and/or consider all of these factors first in making your final decision?