In Creating High Performers, I devote a chapter to “Relationship and the Underlying Principle of Fairness.
” In it, I state, “You cannot achieve employee engagement unless fairness is maintained.”
Why is this important? Gallup reports that companies with engaged employees are 21% more profitable,
experience 41% less turnover, and have 10% higher customer ratings. In short, if you can
deploy a workable engagement strategy, the investment is worth it.
A prerequisite to engagement is a relationship, and a relationship’s requirement is fairness.
First, some definitions:
Engaged employee: one who is fully absorbed by and enthusiastic about their work an so
takes positive action to further the organization’s reputation and interests. An engaged
employee has a positive attitude toward the organization and its values.
Fair: being in accordance with relative merit and significance.
Putting these together, engaged employees must be in a relationship with the organization
and to maintain that relationship, the employment “deal” must be fair. Relationships dissolve
when fairness dissolves. They don’t survive one party being taken advantage of.
We are now seeing this play out in the re-emergence of unions and the recent Great Resignation.
A November 2022 survey of 3,500 workers found that only 32% felt that they were paid “fairly.
” You simply can’t get to engagement from there and without engagement,
you can’t get employees to their full potential.
A major issue in the recent UAW strike was the fact that CEO’s of auto companies had been given
raises up to 40% over four years, and the employees were only offered 6%. Union leaders were
quoted as saying they “got left behind”. The union struck and held out for 30% over three years.
Less senior and temporary workers are due to receive higher raises (yet to be ratified).
The average multiple of CEO to front-line workers in this country as of January 2022 was 320
to 1. At GM it was 362 to 1 (meaning that factory worker annual compensation was the equivalent
to that of 1.01 days of the CEO). At Ford the numbers were 281 to 1. That’s a lot for
workers to swallow and feel good about.
Alternatively, in Japan in 2010, CEO’s were making one-sixth of what U.S. CEO’s were making
and only “16 times more than the average Japanese worker”
Corporations cite the bidding war for CEO talent and other factors to justify multi-million dollar salaries.
The push from Wall Street for ever higher profits (and the link of
profitability to CEO compensation) plays a big part.
One highly successful company, Costco, understands these dynamics and has consistently pushed back
against Wall Street pressure to bring their employee compensation/benefits in line with similar retailers
and thus raise profits. Costco pays its workforce 2.6 times what Walmart pays. Well, it shows, doesn’t it?
Don’t know about you, but I have seen the same workers in my local store for decades. Costco keeps
growing sales and profits by retaining a quality/engaged workforce.
Moral of the story: if you want successful growth, profitability, and customer loyalty, build a foundation
of engaged employees striving to do better because you treat them fairly and believe in/develop their
potential. That foundation must stand on people managers who build relationships, skills, and performance. The Question Method® lays out a pathway for managers \to get there.
Contact me at email@example.com
 Think Progress.org,”Average Japanese CEO Earns One-Sixth As Much As American CEOs”, July 8, 2010
1 Dann, W., Creating High Performers, Growth Press, 2021. Available at Amazon, Barnes & Noble, Bookshop