How do you respond to your friends' concerns about pay? Why is pay necessary in organizations? What

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How do you respond to your friends' concerns about pay? Why is pay necessary in organizations? What can DJ-Fit do to ensure they are paying their employees competitively?

Once again, your friends at DJ-Fit, Darius, and Jessica, reach out to you again for help with a human resource issue. This time it's pretty serious and is affecting the company's overall performance and profits. What they describe to you is a familiar scenario; you've seen it at other companies where you've provided human resource consulting services.

"We're losing employees," Jessica tells you. "They're quitting and going to work for other companies. It's especially a problem when our best and most talented employees leave. Last month we lost some of our top salespeople, supervisors, and production workers. And just today, our finance manager accepted a position with our biggest competitor! Replacing these departing team members is proving to be a substantial drain on our time and financial resources."

"Do you have any idea why people are quitting?" you ask.

Darius offers his thoughts. "We think it's mostly pay-related. We've always felt our compensation was reasonable, but employees are getting higher offers from other companies. They're leaving for a better paycheck. We always thought our pay was okay, but we never really gave it much thought. We feel like we're a good company to work for, we treat employees well, and we have a fun culture. Every Friday we order free pizza for everyone! I don't get why pay has to be such a big deal. Doesn't a good work environment mean something?"

You think for a moment before replying. "It's commendable that you have a positive work environment and fun culture. That means a lot to employees. Remember that you can't always prevent employee departures-sometimes, factors are beyond your control. But let's talk about compensation. Pay appears to be a key issue that needs attention."

"Thanks!" Both Darius and Jessica respond with gratitude. "And this time, friend, we will pay YOU a generous fee for your advice!".