“But we pay well, have free food, and a company arcade. This is a great job” Those were the words of the leader of a fast-growing startup (we’ll call him Simon) who was hemorrhaging team members. As fast as he could hire one person, it seemed like two were out the door.

Creating a happy staff
Underpaying is a problem in business, but so is overpaying. It leads to three problems. Find them out here. (Tweet That)

OK, it wasn’t that bad. He has more than one hundred team members and is forecasted for nearly $200 Million in revenue this year. The seven-member executive team seems happy and all but one of them have been in place for the past three years. Sales are up, costs are down, and yet…he can’t seem to keep any mid-level talent.

The average tenure of his managers and VPs is less than eighteen months. Three positions are currently unfilled. His past two hires quit before they reached six months. Simon was at his wit’s end. The good news is that he recognized that if he didn’t address the problems, they would be his downfall. He had a strong desire to fix them.

What he didn’t know are the eight things his team really wants. They are the same eight things most professionals want. So whether you are leading a company, growing a non-profit, or leading a team of salespeople, keep these things in mind.

The eight things your team really wants – numbers one and two

1. Fair pay.

Surprise, money is important. Simon’s company really does pay well…often too well. Underpaying team members is a surefire way to build resentment. For some people, it causes problems at home, which leads to poor performance at work.

One of the reasons Simon’s warehouse team is so loyal and productive is because he pays them well. He takes care of his people. In turn, many of them are making in excess of $60,000 in exchange for their incredibly hard work. His turnover rate in an area that typically experiences 30%+ annual turnover is less than 8%. Not one of his first ten warehouse team members has left the company. Four of them are managers now.

As he gets into upper management and the executive team, the same is true. They are paid a fair amount and thus, are happy. But his VPs…they are a different beast. Simply put, he was overpaying them.

How, exactly, did this cause problems?

Overpaying leads to three problems that tend to happen in this order:

  • Entitlement
  • Ego (looking down on lower-waged team members)
  • Resentment from below

The VPs were developing serious ego problems. Most of them were making rash decisions, buying fancy cars, and living a lifestyle that was causing big problems with their direct reports. Resentment built, respect was lost, and performance declined. Ironically, Simon’s biggest problem (lack of leadership for some teams) was helping the company. Without the egotistical leaders in place, the teams performed very well.

There is a delicate balance in determining pay rates. You want to pay well enough to help team members avoid financial problems and be better focused at work. But overpaying can be just as bad.

2. The right resources

This is another money-related one, so I wanted to get it out of the way.

Does your team have the right:

  • Tools
  • Training
  • Budget
  • Personnel

Again, in this arena, Simon’s company seemed to have a three-tiered system.

Frontline workers (warehouse, customer service, and sales) had the tools they needed. They received frequent training, received consistent upgrades to equipment, and were adequately staffed. Each team member knew his or her role.

The executives also had the right tools. They participated in quarterly leadership training and read books together. They controlled their budgets so that was never a problem. And each of them had an assistant to help them.

But the VPs…they seemed to be constantly short of resources. They received little or no training on how to lead. They had almost no discretionary budget and no assistants.

It never ceases to amaze me how something small (in the scheme of a $200 Million company) like a new chair, an updated computer, or a shared assistant can change an entire culture.

In order to be happy, your team needs the right resources. No amount of pay or power will replace the need for them.

The rest of the story

So, we’ve covered two things that your team really wants. Six more to go. And we’ll cover those in the next three days. If you haven’t already, make sure to subscribe to my RSS feed or get posts via email (and get my free book as a bonus) so you don’t miss any installments in this series.

I told Simon two things to start with. First, he needed a new compensation plan for his VPs. He developed a much lower starting salary with better bonuses. His fear of being unable to attract top talent was quickly alleviated when I reminded him that he was investing a lot more in bringing them on and then losing them quickly. Plus, he’d find driven, loyal prospects, not just those in it for the money.

The second thing was that they mirrored the executive training plan for the VPs. And they started right away with the current team. As more came on board, they were instantly made a part of this new culture.

But Simon struggled in six more areas, so stay tuned for more and learn from his mistakes.

In tomorrow’s installment, we’ll discuss the next two things your team really wants: A clear vision and realistic expectations.

What would you tell Simon about providing fair pay and the right resources?


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13 thoughts on “The 8 Things Your Team REALLY Wants: A Primer on Creating Happy Staffs

  1. Jon Stolpe says:

    I think these are great tips so far. I look forward to the posts in the coming days.

    Fair pay is an interesting topic especially at this time when we are making decisions related to merit increases, promotions, and discretionary bonuses. We continue to maintain extremely low turnover, so I think our pay is at least fair, but there is definitely a plague of poor attitude. There may be many factors related to this, but I have to wonder if overpayment is one of the issues. Thanks for giving me something to ponder.

    1. Matt McWilliams says:

      Could be, but turnover is often one of the biggest indicators of correct pay rates. It’s hard to run a company in America and have low turnover without being very close to spot on.

      1. Jon Stolpe says:

        Good point. The poor attitude may very well be related to other factors – failure of management to deal with problem people, the general increase of processes and procedures, the tough construction working environment, etc. This is the challenge of someone in my position – to improve attitude and working condition and to maintain high levels of business profitability and success.

      2. Geoff Franklin says:

        True. No matter how happy people are with the perks, we all have a number in our heads of how much we are worth. If that number isn’t close to being hit, people leave. If it’s too high for their own sense of worth, sometimes the fear of losing it gets dangerous.

  2. Katherine Leicester says:

    Could low morale and a bad attitude be the result of one story being told to the external customer, and one story being told–in the form of pay, etc.–to the team?

    1. Matt McWilliams says:

      Absolutely. In fact, I’ll hit this in an indirect way in one of the next three in this series.

      It’s also critical to message the same thing across the levels. Not one thing to the warehouse and another to customer service etc.

  3. Zech Newman says:

    I look forward to all the points Matt. Pay does matter. Especially recognition…bring the company more money and you get a part of the action. As a business owner I have to continually look at the situation from the other side. Do onto others as you would have them do onto you.

  4. Steve Pate says:

    Number one is a big one for me right now. I currently work for a non-for profit, and this question hit me last year, why is it okay to work this hard, and be payed so little. Why is it okay to pay pastors pennies?

    What would I tell Simon? Don’t assume a VP knows it all and they always needs to be learning. It looks like Simon just figured this thought, “ah the’re smart people they’ll figure it out, I better focus on the those on the front lines” Second, maybe to set up a mentor system so the VPs can get a human perspective with those on the “front” line.

    Your post goes great with the book Decisive by the Heath brothers.

    1. Matt McWilliams says:

      Great ideas all around Steve! I especially like the mentor system.

  5. Joe Lalonde says:

    I can see how fair pay plays into the equation. I’d tell Simon to remember that the people under him are just as valuable as the executive team. Sometimes more-so as they’re the ones who are seen on a daily basis. When your team members are interacting with the customer, they’re the face (and value) of your company.

    1. Matt McWilliams says:

      I think so many leaders forget that…the CEO is irrelevant with the daily customers. It’s the single mom in the checkout line.

  6. Nicolas Goldsmith says:

    Matt – it is excellent that you are covering this topic. A very common practice that
    turns team members away is to promote someone because of their
    connections/relations rather than because of their ability. This gives everyone
    else the message that no matter how hard they try, they won’t necessarily
    be treated the same or be rewarded proportionately. On the other hand, if
    someone with no relationship or personal connections with the existing leaders
    displays great ability and is promoted as a result, that sends an equally clear
    message down the ranks: “There are no glass ceilings here: anyone can make
    it to the top – let’s all do our utmost!”

    1. Matt McWilliams says:

      Good point Nicolas.

      I would argue that there are certain rules to the game though and it’s a person’s duty to make the right connections. (see: https://www.mattmcwilliams.com/life-is-a-good-ol-boys-club-2/)

      But I totally get what you are saying. There is a fine line between promoting someone you like who is great at his or her job and promoting your nephew who doesn’t know the operations at all.

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