Wednesday, November 28, 2012

How businesses can profit from raising compensation at the bottom

From the Ivey Business Journal:

It has long been assumed that companies stand to increase profits by cutting wages and benefits for employees at the bottom of the corporate ladder. While companies use diverse incentives such as high wages, performance rewards, and stock options to recruit, retain and motivate highly skilled professionals, they assume that employees at the bottom of the corporate ladder can be replaced easily — and don’t need incentives.

We conducted a six-year study of companies around the world that had tried investing in their employees at the bottom of the ladder. We sought to answer: 1) How successful were these companies in improving conditions at the bottom of the ladder and 2) What impact did the improvements have on the firms’ productivity, financial costs, and economic returns.

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