A study has found that the world’s most successful companies pay lower wages than their rivals.
Consultancy Hay Group found that employers on the 2008 Fortune’s Most Admired Companies (MAC) list paid an average of 5% less in salaries than their peers. It also found firms on the list rewarded staff more effectively, and were better at retaining staff, saving on recruitment costs.
Employers get on to the MAC list by consistently outperforming the Standard & Poor Index in terms of shareholder returns.
“Our research found that companies that make the MAC list haven’t just stumbled on the formula for making employee reward programmes work more effectively,” said Hay Group associate director, Colin Evans.
“The key differentiator between higher and lesser performing companies is the implementation of successful employee reward strategies.”
The firms polled were found to be using higher levels of bonuses and incentives, especially for more senior jobs, and in many cases were found to be twice as effective at rewarding top performers than their rivals.