Anyone that has heard me speak at farm conferences knows I preach about top talent; getting the all-star line-up for your operation. I often get asked at the end, "how much will that cost me?" I ask in response, "does it really cost you any more money?" Low performers cost the company money and high performers make the company money. Let's explore.
It's tough to measure how much a poor performer actually costs a company given all the immeasurable factors. Consider the hard dollar costs the non-performer adds due to his mistakes from unsound decisions and additional labor hours from sluggishness or redo's. What about costs from management spending too much time on one particular employee; making concessions and adjustments, wasting time discussing the problem child with others and frustration with the underperformance? That time and energy could be spent in more profitable ways. What about the effect on other employee's work and motivation? It can be a drag across the entire organization. That non-performer is much more costly to the business than just his wages.
Higher performers don't always come with higher dollar amounts. Often when it comes to general unskilled labor, just mere personality and drive are more valuable to the company in those positions and that rarely means a higher wage.
In other roles top talent does come with a higher wage expectation. The reasoning behind paying more for that talent is simply because you get more. The old saying, you get what you pay for. Those all-stars add significant value to the organization. You get real thinkers on the team adding value daily. They can actually contribute real dollars to your bottom line as they bring up improvement ideas or work more efficiently. There are also talented individuals that are great motivators and when they are around others, that enthusiasm can be spread to other employees who in turn increase their performance.
Let's look at actual dollars. If you paid $10,000 more per year for a great mechanic versus a mediocre, one-pacer it shouldn't affect your bottom line even though the employee makes more. The employee will pay for themselves; they actually cover their own higher salary through cost savings to the company or revenue generating ideas. Let's say this individual price checks everything, saving you thousands by the end of the year; he works 10% faster and more efficient than other mechanics saving you money in reduced labor hours; and he is extremely thorough in going through the equipment reducing downtime in the field during harvest. Pretty sure his 10K is covered. Logic says you can afford to pay the higher dollar amount because it doesn't cost you any more money at the end of the year. It's just good business sense.