7/09 PEOPLE POWER: Consider a non-financial “raise” this year

By Robert Milligan

Few employees of dairy farms or other businesses will receive an increase in their salary or wage this year due to the continuing economic crisis in both the dairy industry and the national economy.  I have been calling it “Turbulence squared.”   I do not personally know anyone receiving a salary or wage increase.

Does that mean owners can do nothing to “compensate” their employees for their continuing hard work and dedication to the farm/business?  The answer, of course, is a resounding “NO!”

We begin by recognizing that for everyone , owners and employees alike, “compensation” – what we take home from work – has two components:

1) Financial compensation – salary/wages and benefits – that we have agreed is unlikely to increase much, if at all, this year. 

2) Non-financial compensation. Anything that enhances job satisfaction is a form of non-financial compensation. Research increasingly suggests job satisfaction is enhanced by a) success in one’s job, b) engagement in the success of the business and c) anything that increases trust in the business itself, business leaders and coworkers.

The real problem or dilemma today – or maybe even tragedy – is that in most businesses, including farms, non-financial compensation is declining.  As financial stress and uncertainty have encompassed almost every business, job satisfaction and team spirit have declined.  Employee trust in their employer may well be at an all time low.  Recent research found that only 20% of employees trust the organization that employs them.

As with most bad situations, there is a silver lining.  You have the challenging opportunity to capitalize on this difficult situation (“Turbulence squared”) to build a potentially lasting trust with your employees.  Here are four suggestions to increase non-financial compensation for your employees: 

1.  Let them know how the farm is doing.  It is no secret to your employees that this is a challenging time for all dairy farms.  They hear it in the local press, they hear it in community discussion, and they hear it from you.  Unless you are telling them otherwise, they are probably questioning the future of your farm and thus their job security.  Although this is a difficult time, most dairy farms will survive and return to profitability.  If you farm is one of these, let your employees know.  If your situation is tenuous, your employees may well be willing to sacrifice to help you survive.  Remember, in most casesour preference for news is: good news, bad news and lastly, no news.  We as human beings are likely to imagine and begin to believe worst case scenarios in uncertain situations with a void of information. 

2.  Provide clarity (“chalking the field”).  I recently visited with a dairy farm manager who was frustrated that one of his employees did not call him when the employee discovered a cow that was unable to get up.  I encouraged him to talk to the employee.  During the discussion, he realized that he had never clearly communicated when or how to contact him in such a situation.  We all have a tendency to assume that others – family members, friends, partners, employees – understand clearly even when they really do not.  Especially in our current uncertain environment, clarify of rules, expected behaviors, job responsibilities and procedures/protocols is extremely important.  Be clear. Explain why. And then ask questions to ensure that there is clarity.

3.  Help your employees succeed.  Building on the previous point, apply the need for clarity to performance expectations.  Most of us feel the most success when we meet or exceed a previously set expectation/goal.  You need to

a) have clearly established performance expectations – milk production, calf mortality, SCC, feed intake, etc.

b) engage everyone in meeting and exceeding these expectation – success, and

c) work with your employees to set performance expectations for themselves.  You then need to provide training, coaching, feedback, support and encouragement to enable them to success.

4.  Improve communication.  It is amazing how often we talk but do not clearly communicate.  The best place to start to improve communication is to be a better listener.  Great listeners are fully engaged in what is being said including watching body language and catching the tone of the voice.  They then take the time necessary to fully understand what was said and respond thoughtfully.  Asking questions that show interest in your employee (How is your family doing? What are your children doing this summer/) and that show your interest in their ideas for the dairy (How would you do this? What are your ideas to improve?) build trust and respect.



A.  The key to employee job satisfaction is being proactive – not reactive — in your interactions with them.  Prevent and handle issues early instead of constantly reacting to problems.  Great employee management is not too unlike excellent herd health – prevent and correct problems.

B.  This is an incredibly frustrating time for all of us in the dairy industry.  Working to refrain from taking this frustration out on others (family members, friends, employees) is a difficult but crucial undertaking.

C. Increases in non-financial compensation – job satisfaction – will almost certainly also lead to greater employee productivity.


Robert Milligan 
Senior consultant,
Dairy Strategies LLC

E-mail: rmilligan@trsmith.com
Phone: 888-249-3244, ext. 255
Web site: www.dairystrategies.com.