Henry Ford was one of the most successful businessmen in America. Today I came across a quote of his that outlines his key strategies for success:
“There is one rule for the industrialist and that is: make the best quality goods possible at the lowest cost possible, paying the highest wages possible.”
So many businesses seek to “cut corners” with their products. And so many employers think the best employee is a hard worker who can be paid the minimum possible. Yet for Henry Ford, his success came from just the opposite techniques.
Consumers value a quality, low-cost product; this much is obvious. The less obvious strategy for success lies in determining your employee’s salary.
Money. It is how your customers will value you, how your employees will prioritize their work, and how you know if your business is on track.
So why tell your employees they don’t matter? A fair or generous salary is one of the few near perfect ways to communicate to your employees both how much they matter and what you expect from them, for better or worse. In the language of money, a low rate practically shouts at the employee that the job doesn’t matter, anyone could do it, and that you weren’t terribly interested in who is filling your office space. On the other hand, a strong paycheck sets the groundwork for high expectations and high returns, telling the employee that they and their work are a priority. Anywhere significant money is, you’ll be paying attention, so they better pay attention too.
A fair pay rate will also attract the best candidates for an opening, and keep your company competitive. Henry Ford’s famously shocking $5 workday ($120 today) did just that: once Ford doubled the rate of most of his workers, the best mechanics in Detroit flooded in bringing their expertise, raising productivity, and lowering training costs. There is a reason that the best companies often sign the largest checks: they are building the creative foundation of their future.
Speak the language of employment, and invest in your employees. After all, without good people, there are no good companies.
