Companies that have the most productive workforces also tend to pay their employees well, a recent survey found. “Top performing companies, it turns out, are in the habit of treating their workers better on the salary and bonus front,” writes Karsten Strauss for Forbes, citing research from PayScale.


“In 2015, 90 percent of top-performing firms gave pay raises. In the same time frame, only 84 percent of remaining respondents—identified as average companies—gave pay raises,” Strauss writes. “Additionally, 81 percent of top performing companies said they gave bonuses, as opposed to 74 percent of average companies.”


So, are the most productive and profitable companies more generous with their employees? Or are employees who are paid better contributing to the success of their employers?


Strauss believes the answer is revealed in how employers think about their employees. For example, 86 percent of top-performing companies listed their employees as their greatest asset. That was true of only 76 percent of average companies.


The link between employee compensation and company performance is known as the Good Jobs Strategy, writes Jessica Leber for Fast Company’s Co.Exist. Companies that pay better “often achieved a ‘virtuous cycle’ of higher customer satisfaction, better employee retention and other long-term results that increased profits and made up for higher wages,” she writes.


And, good management makes a difference, too.


“To use the good jobs approach strategically, companies need to not only pay employees more, but also restructure work to maximize each person’s productivity,” Leber writes. “It’s not just about better pay—or even better benefits—but also smarter management.”


Transparency in how companies are compensating their employees is also an important factor, Stephen Miller writes for the Society for Human Resource Management. “While 73 percent of employers say they pay their workers fairly, only 36 percent of employees agree,” he writes, also citing the PayScale survey, “a very interesting, and maybe alarming, disparity in the responses between employees and employers.”


He believes that disconnect can be addressed with better communication about why employees are paid what they are. “Transparency doesn’t necessarily mean posting everyone’s salary on the wall,” he writes, quoting Tim Lowe, PayScale’s senior vice president of marketing. “There’s a spectrum of pay transparency and a huge amount of value of moving your organization up the transparency spectrum by sharing some of the mechanics and philosophy around compensation.”


Employers can embrace it by explaining how they set benchmarks for salaries and the age of the data they’re using to do so. They should also explain salary ranges and scales.

“If you open up about what you value and why you pay the way you do, and share that with your employees, you’re building trust,” Miller writes, quoting Lowe. “And trust is a powerful engagement tool for driving business success.”