What employees really want to know about their paychecks

How can a company retain good employees? Paying them more is one obvious answer. There’s also another, more cost-effective option: being honest with people about why they earn the salaries they do.

The compensation data firm PayScale recently surveyed more than 500,000 employees on their satisfaction at work and intent to leave their jobs. Pay wasn’t the most important factor behind either metric; employees who felt appreciated were the most satisfied, and those who were optimistic about their company’s prospects were the least interested in leaving their jobs.

But pay matters—and so does an employee’s understanding of how the company arrived at the figure on their check.

Employees who believed that their company’s pay process was fair and transparent were 13% less likely to leave than employees neutral on the subject. Those who felt entirely in the dark about what factors into their pay were 57% more likely to plan on leaving in the next six months, said Chris Martin, lead data analyst at PayScale.

Pay-process transparency doesn’t mean making salaries public. It means explaining to employees the factors that go into determining compensation. This information has value. In some cases, employees actually prefer a lower salary disbursed through a transparent process over a bigger paycheck with opaque reasoning. Previous PayScale research (paywall) found that 82% of employees whose companies paid below market value—but explained the reasons for that low salary—remained satisfied at work.

Being open about the logic behind salaries is a relatively inexpensive way to boost employee satisfaction, but most companies aren’t taking advantage of it. Only 23% of workers surveyed said their company was transparent about its compensation process.

“What we saw in a big way with satisfaction is that how people feel about the process matters much much more than what they are paid,” Martin told Quartz At Work. “There’s this thing that companies can do for free, which is improve their communication about why people are paid what they’re paid.”

Article originally posted by qz.

Report: US grads are missing one thing—the ability to function like adults

The US is graduating high school students at an all-time record rate. Having coming of age in the metric-focused No Child Left Behind era, these students’ academic and technical skills have been tested more than perhaps any generation before them. Yet employers looking to hire them say too many of today’s graduates lack the basic interpersonal skills to succeed in the workplace, according to a new report from the US Chamber of Commerce Foundation.

“Even when applicants make it past the interview process, employers are coping with new hires who are unsure of how to write a professional email, who struggle to organize and prioritize tasks, or who have a difficult time collaborating with coworkers,” the report’s authors wrote.

The report echoes a frequently reported complaint from employers in recent years about the lack of so-called “soft skills” among US students. In a 2016 PayScale survey of nearly 64,000 managers, 60% complained that young hires in their companies lacked the critical thinking and problem solving skills necessary to get the job done.

Young cohorts of workers typically get more criticism than they deserve. Problem-solving skills tend to get a lot better with maturity and on-the-job experience, and there’s no clear evidence that millennials, for instance, are actually more entitled than any other generation was at their age.

What is true, however, is that soft skills get relatively little time in many US classrooms. One review of 4,000 teacher-training classes in the US found that fewer than 10% discussed social skills or self-awareness. There are no state or national standards for teaching interpersonal or self-management skills in the US, unlike the more than two dozen other OECD countries that have such skills as part of their national curriculum.

“Businesses large and small constantly tell us how hard it is to find qualified workers who can not only do the job, but who can also show up to work on time, dress appropriately, and work well with a team,” Cheryl Oldham, senior vice president for the US Chamber of Commerce, was quoted as saying in the report. In the absence of a clear curriculum, the report argued that businesses should be partnering with schools to make sure students get the skills their future employers want.

Why “visionary” language from leaders can sometimes backfire

CEOs of small but growing companies may feel pressure to speak to their employees with the flair and vision of a Churchill, Jobs, or Obama (Barack or Michelle). According to management lore, that’s what archetypal great leaders do.

But a new study appearing in the Journal of Applied Social Psychology challenges this convention, suggesting the wisdom-from-upon-high approach isn’t the optimal choice for every leader.

Gijs van Houwelingen, a lecturer of management at Leiden University in the Netherlands, finds that when employees feel psychologically “close” to the head of their company—as is often the case at early-stage enterprises—big, visionary statements about company goals don’t always land well. In some cases, messages about feasible goals end up being a lot more motivational.

Why this is so has to do with where our minds go depending on how distant or close an object or idea seems to us. According to a concept in psychology called construal level theory, distance in any form—geographic, hierarchical, or across time—is matched by psychological distance (or nearness) in the mind, and changes the way you think about the focus of your attention. We think in concrete terms about what’s close, and more abstractly about what’s far. The analogy is our visual perception, van Houwelingen explains. When something is close, you see a lot of detail, and when something is far away, “you can probably not see that much detail, you can just make out shapes.”

There are downstream effects to these mental states. If you celebrate Christmas and are asked to think about how you’ll be celebrating the holiday a decade from now, you might envision the music, the lovely food, or the tree, but you’re probably not going to imagine your car breaking down on the way to dinner, or an argument with relatives at the table, says van Houwelingen. The possible obstacles to a successful holiday, and the complicated logistics, are more likely to come into focus only when you think about this Christmas.

In a workplace context, if your leader is someone a few cubicles away, and they keep talking up the company’s vision for changing the world within five years, you as the employee might think, “Hang on, let’s get past today’s problem and make it to Friday before we move on to the long-term stuff.”

To test and ultimately confirm this hypothesis, van Houwelingen’s team ran two studies, in both cases manipulating the participants to feel either closer or more removed from a leader who was sending them motivational messages centered on certain goals.

In the first study, engineering students in Mexico were divided into groups. Some were primed to be thinking about abstract life goals, while others were primed to be thinking about pragmatic goals for the near future and how they might accomplish them. They were then made aware of a real-life situation: the university wanted to bring free-trade coffee to its cafeterias. Next they were given letters ostensibly from the university president (actually written by the researchers) that either featured vague, idealistic goals (along the lines of “We should do the right thing”), or one that explained how the students could adjust to pricier coffee.

The results? Participants who had been primed to be thinking about the distant future were willing to pay about 22% more for their coffee after the idealistic appeal than after the more practical appeal. By contrast, the group that had been primed to think about near future were willing to pay about 40% more for their coffee after a practical appeal than after the more visionary appeal.

The second study was similar, except it was conducted in the Netherlands with business students who were asked to join a protest over cost-cutting measures at their university. This time, one group was told that the student leader seeking their support was someone on campus. The second group was told the student leader was 100 kilometers away. (In reality, this person didn’t exist.)

Those who imagined the leader was far away lapped up the blue-sky messages about improving universities, whereas solid, practical goals appealed more to their counterparts. Interestingly, those who felt closer to the student leader also found the mile-high outlook more persuasive, although they didn’t plan to act on it.

“It was like they said, ‘Oh, wow, that was some good stuff,’ but we’re not going to participate in these actions,” says van Houwelingen. He proposes that this surprising outcome—which he plans to investigate in future studies— may be tied to how culturally programmed people are to appreciate The Grand Vision.

For managers, this study might explain adjustments they’re already making intuitively. No one wants their CEO visiting a far-off office where they start explaining how customers should be greeted in that region. It’s also a credible explanation for why the literature on employee motivation appears to support both aspirational and pragmatic approaches to communicating goals: Both styles are strong optionsit seems that what matters most in choosing one is the social relationship between leader and employee.

So if you’re the CEO of a startup and feeling chuffed for getting employees “superpumped” at the monthly meeting, know that even your best efforts are no guarantee that your staff will go back to their desks any more motivated than they did before your lofty prose reached their ears.

Article originally posted by qz.