Executive Compensation

Contemporary Issues in Compensation

Develop your compensation program carefully, and your bank may get more than it paid for.

By Raleigh F. Seay Jr.

THE SALARY SCENARIO

lathew O'Connellv, branch manager, was sitting in his office when I one of his tellers, Mary Knudson, knocked on his door. "May I come in?" she asked. "Sure," Mathew said, "I was just reading this article on compensation and job satisfaction, and I'd like to talk with you about it." "Good," Mary said, "Because I was just wondering if I were going to get that raise we talked about a couple weeks ago." "Well, let's taik about that," Mathew smiled. "Mv boss gave me this article that I've just been reading, which says that job satistaction is more important than compensation to employees. So I thought maybe we'd do something to increase employee job satisfaction at work. For example, we're going to begin having smali group meetings once a month to give employees an opportunity to express their opinions to management." Mary swallowed hard. "Well," she said, "that's very important, but what about that raise?" "Just think for a minute. Wouldn't it be good if we were to create a working environment with a free flow of communication so that employees feel that their opinions were important to management?" "Of course," Mary said, "but I was really looking forward to that raise." Mathew harrumphed. "You don't understand, Mary. Here, take this article home and read it. Then let's talk about it tomorrow. You'll more fully understand how a satisfying working environment is more important than wages." "Ail right," Mary said, as she took the article from Mathew and started to leave. Then, as she reached the office door, she turned to Mathew and said, "If I read this article, will I get that raise we talked about?"

Satisfying vs. Motivating Employees

This kind of interaction between Mathew and Mary is not uncommon in today s workplace. Two of the fundamental questions management must answer are (1) what...