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The first thing I always consider when a manager comes storming in the office saying "I'm losing all my people we have to pay them more" is.....The Manager. 90% of the time we don't have a pay problem. We have a people problem.

Bingo! You got it in one, Katherine.

This prior post focused on that common problem: http://www.compensationcafe.com/2014/04/excessive-overpayment-vs-the-real-solution.html.

I know underpaid people who stays because they:

1. Like their boss
2. Like their work and what they do currently
3. Like their team

Salary is great, we all have bills to pay but sanity is priceless. How much is your sanity worth?

Pay competitiveness is overrated and loosely defined. Statistically speaking, if the company pays the median competitive rate and has a standard distribution, half their employees are paid "below the norm." Most are also probably "below average," since the average typically exceeds the median.

Cash is only a small part of overall compensation (the total reward proposition) but counts most when it fails to meet the worker's minimally acceptable standards. That lowest threshold number varies according to the other reward elements that engage and bind the worker. Starvation can trump sanity as a motive, but when insanity creeps into the current job, other (usually higher paid positions) gain attractiveness. Then you can safely cite cash as the reason for leaving.

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