Unreasonable

Bigger Paychecks, Better Impact: A Case for Paying People More

Photo from Creative Commons

“There’s no such thing as a small act of kindness. Every act creates a ripple with no logical end.” — Scott Adams

It is accepted wisdom that there are valuable benefits to paying employees more. Paying people more than market rate has been shown to increase employee engagement and productivity, reduce turnover and its associated costs, mediate the need for expensive supervision, and improve brands.

Some of these benefits are measurable and concrete, some are subjective, but the overall result of increasing pay has been found to be more profitable businesses. And while boosting profits is a great reason to pay employees more, there’s another reason that may be exponentially more gratifying: creating real, tangible, and personal impact.

Paying people more than market rate has been shown to increase employee engagement and productivity. Tweet This Quote

A business’s purpose, culture, and operations can all contribute to cultivating a positive impact. That impact can be amplified and diversified by paying employees more. Transferring more of the wealth of a business to its employees can have a positive impact in unpredictable and manifold ways.

Bigger paychecks allow businesses to make greater impact by investing in the most impactful sector of the philanthropic economy: individuals. Paying employees more supports those most likely to be generous philanthropists to give even more (the largest source of charitable giving comes from individuals at 71 percent of total giving, verses the 5 percent of total giving offered by corporations).

On top of supporting active philanthropy, paying more also creates the conditions and freedoms for people to create impact outside of the constructs of their jobs. When people have more than they need, they are more likely to contribute in their communities and in ways that a business cannot. It allows them to spend their time, energy, and money on activities that directly affect lives for the better.

The largest source of charitable giving comes from individuals at 71 percent of total giving, verses the 5 percent of total giving offered by corporations. Tweet This Quote

For instance, a raise recently offered at my company is now being used to offer more affordable, holistic birth-services support. Our part-time director of operations is also a doula, and her reaction to that increase in her paycheck was to make her services available to more clients without financial resources. In this way, my business was able to indirectly contribute to safer and more healthful births and more positive birth experiences for more people in our community.

Paying employees enough so that they don’t have to work overtime or multiple jobs might allow them time to volunteer, which would benefit individuals, communities, or environments. It may allow them to pay for an education or activity for their children that could have life-long effects. It may allow their partners to do important unpaid work such as parenting, eldercare, art, or writing.

Paying more allows people to create impact outside of the constructs of their jobs. Tweet This Quote

Paying more makes a real impact in people’s personal lives and in ways that we can’t necessarily predict or measure. It is a concrete way to support the good that people already do and to amplify the powerful ripple effect of personal intentions and actions. Not only does it allow our businesses to flourish, it also allows the individuals that make up our businesses to spread impact and do good in a way that a business itself never can.


This post originally published on DOJO4.