Fortune's Most Admired Companies Pay Less - But Execute Better

Fortune magazine and Hay Group just released their eleventh annual Most Admired Companies list.  In an interesting side note to the annual rankings, Hay Group, based on supplemental research conducted by the firm, tells us that the Most Admired Companies tend to pay less - about 5% less - for talent than their peers.

The details of how they arrived at this conclusion have not been revealed, but it is an interesting finding.  How can this be?  Are people just willing to earn less in exchange for the chance to work for an "Admired" company?  Not necessarily, according to Hay Group; their research suggests that these companies are simply able to get a better return on their investment in reward dollars - a "better bang for the buck".

In particular, the "Admired" companies do a better job of:

• Retaining and growing people internally, so they have less need to hire expensive outside talent
• Rewarding top performers, so that they are delivering higher pay increases to those truly deserving and holding the line on pay for marginal performers
• Utilizing their managers to help employees understand and appreciate the total value of the rewards provided by the organization, both tangible and intangible

I love the way that Hay Group senior consultant Mark Royal sums it up:

Our research found that companies who make the lists haven't stumbled on a silver bullet for making employee reward programs work more effectively.  They are simply able to executive more successfully on a number of basic HR best practices.

Hear that everyone?  It comes down to executing well on the basics.  Too many organizations and management teams want to leapfrog over the basics (Why?  Because they require hard work and discipline, I suppose) and glom onto the latest, greatest, trend-du-jour in the hopes of a quick fix. 

Thank you Fortune and the Hay Group for showing us, once again, that the basics - if done well - will "pay off".

Comments

[almostgotit]

Pay less, execute better, and become a highly desirable employer. Fascinating findings, indeed! I think this is another one to forward to a certain academic administrator of my fairly close acquaintance...