Talent Management

Building Better Engagement, or Why Millennials Hate Being Paid by the Hour

The recession has changed the attitude of many members of the Millennial generation when it comes to work.

Question: What’s the simplest way to pay an employee?

Answer: Wage per hour.

Simply multiply the number of hours worked by the agreed upon hourly wage, subtract taxes, and presto – a paycheck!

Hourly compensation has been a staple of the free enterprise system since Rosie fastened her first rivet. And like they always say, “If it ain’t broke, don’t fix it!”

Unfortunately, wage-per-hour employee compensation is broke. Has been for at least a decade.

Engaging a Millennial’s heart and soul

Ask any Millennial who gets paid by the hour. No matter what the hourly wage is, if you pay them based solely on the numbers of hours they work, then all you’ll ever get is their time.

If, on the other hand, you want to engage a Millennial’s heart, their soul, their ingenuity, their productivity, and their passion, an hourly wage — by itself — won’t cut it.

To better understand this mind shift, check out this short video clip from a recent presentation to a group of franchisee owners of one of the fastest growing restaurant chains in America.

Finding joint success

Okay, Eric, I get it. paying by the hour is easy, but it’s not very effective. How can I avoid the train wreck of having my people work against me?”

Find a way to make your success their success.

To be aligned instead of at odds with them, your Millennial employees must hold an active stake in your success. They’ve got to see how great effort leads to great results, and how great results pave the way to great rewards.

Conversely, when your profits wane, your people should feel the pinch just as you do.

Just because they are not owners of the business doesn’t mean they shouldn’t take ownership in whatever role they play in that business. Your culture should be one where employees own their jobs, as opposed to one where employees feel totally disconnected to bottom line results and are only exchanging units of their time for a predictable paycheck.

Thinking outside the hourly wage box

Putting a tip jar on your counter (or whatever the equivalent of that is in your industry) isn’t a viable solution, as it merely shifts the responsibility of rewarding employee performance onto your customer leaving neither party feeling inspired, appreciated, or motivated.

No employee compensation system you find or create is going to be as easy to administrate as multiplying hours by a predetermined wage. But if easy isn’t producing the employee engagement you desire, it’s time to think outside of the hourly wage box.

You’ll know you’ve found an effective pay plan when those on your front line are as happy as you are when your business is people-packed and as concerned as you are when it’s ‘chill’.

Don’t rest until you hit upon a pay plan that allows your people to experience the roller-coaster ride of your business with you.

This was originally published on Eric Chester’s Reviving Work Ethic blog. His new book is Reviving Work Ethic: A Leader’s Guide to Ending Entitlement and Restoring Pride in the Emerging Workforce. For copies, visit revivingworkethic.com.

Eric Chester is a leading voice in the global dialogue on employee engagement and building a world-class workplace culture. He's an in-the-trenches researcher on the topic of the emerging workforce and the dynamics of attracting, managing, motivating and retaining top talent. Chester is a Hall-of-Fame keynote speaker and the author of 3 leadership books including Reviving Work Ethic . His new book, On Fire at Work: How Legendary Leaders Ignite Passion in their People without Burning Them Out, will be released later this year. Learn more about Eric at EricChester.com.
  • Terri

    This 21st century of employee ownership that you are talking about will require a different company culture than found in 19th & 20th century-based companies. The previous century cultures were based on beliefs where employees felt loyal and worked hard for their company, but expected the company to provide security and in some cases to show they cared for their employees. Engagement was not much in the equation. Yes, a first step is to understand the importance of engagement and to tinker with employee systems such as pay plans, but leaders will need to dig deeper into their own personal and organizational assumptions for success to engender more natural and long-term engagement among its employees.