Boise State on Business

Gundars Kaupins: How to help your low-paid workers if you can’t give raises

GUNDARS KAUPINS, professor of management, College of Business and Economics at Boise State UniversityOctober 22, 2013 

Jennifer has worked a minimum-wage job in the company for four years and is not familiar with an innovative concept called a “pay raise.” While inflation continues, her pay continues to fall behind the marketplace. She always does an outstanding job, but her boss only gives her an obligatory handshake each year.

Jennifer’s case is a major issue within Idaho. This state is No. 1 in the nation in the percentage of hourly workers who hold minimum-wage jobs. The state rate is around 8 percent, whereas the national rate is around 4.7 percent.

If pay raises are somehow not an option, isn’t there something companies can do to support outstanding minimum-wage employees such as Jennifer?

Profits are important, but people are, too. Jobs at Idaho’s federal minimum of $7.25 an hour are hard to survive on and no place to stay in. Companies can show they care about such workers by helping them leave minimum-wage jobs through enhancing their educational opportunities. This sounds counterintuitive, but it may boost employee loyalty and productivity because companies show interest in the employees’ well-being.

Minimum-wage employees can receive help for college, take online classes or obtain certifications by posting a variety of scholarships on bulletin boards or the company website. Companies can provide their own scholarships or tuition reimbursement programs that have various tax benefits. Flexible work hours can help some employees take required classes. Employees might be given some time off during work hours to attend work-related classes that could add to their resumes.

A minimum-wage worker such as Jennifer who gets an engineering, business or other degree with the company’s help may have acquired the skills to move up in the company ranks.

Jennifer happens to be No. 1 in the company when it comes to on-time customer service. That is the company’s top priority. If that is what the company wants, then it should reward that performance appropriately.

Some inexpensive ideas for the best on-time customer service are to have plaques for the top employee of the month or year, recognition luncheons, gift cards or chocolates. Those ideas might not be the most effective, especially if the recipients don’t care about plaques, food or gift cards to a store they will never see.

Employers should know the employees’ special interests. Employees can be asked about how they would want to be rewarded for being the top online customer-service representatives. Private personal discussions, direct interviews, small group sessions or questionnaires can be used. If an employee likes fishing and kittens, there are places online where fishing kittens can be found in pictures and porcelain. A personalized surprise gift to an employee might boost the employee’s morale and the morale of co-workers.

The company website can feature the top employees. A story about what they accomplished and a little bit about their lives can be featured. Past honorees should be accessible with one easy click.

In summary, minimum-wage employees need the company’s help to go on to better career opportunities through educational support. Rewards linked to what the company wants to accomplish and the employee’s needs are the most beneficial for employees and the company. Ultimately, employees who feel appreciated by their employers will be more loyal and productive.

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gkaupins@boisestate.edu

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