Regardless of the industry, the marching orders at most business are the same: Maximize profit at all costs. To do this, most successful leaders would agree it’s critical to hire and retain the best possible employees. This seems like pretty simple stuff, but often the two concepts run counter to each other. If a business is looking to maximize profits wherever possible, it has a vested interest in trying to cut costs wherever possible, including employee wages. The sad truth is most companies will pay employees as little as possible, and while this might work in the short term, the harsh reality is that employees who know this will, in turn, put in as little effort as possible. So how can employers solve this issue? Counterintuitively, it might be paying employees as much as they can. Great people won't work for peanuts, and if that’s what you pay, great people will leave as quickly as they can find a better opportunity. When they do, performance drops and word gets around that the organization doesn’t care about its employees, hurting the brand and social credibility. On the other hand, if you pay more than most, you can expect more of your employees, and they will tend to stick around to do great work for much longer.
View Source: Yahoo Finance