How to Increase the Value, Worth and Competency of Your Employees

A manager's primary role is to increase the efficiency and effectiveness of employees so they can produce more at a reasonable cost. There is a formula by which you can increase the value, worth and competency of your employees.


A manager has many responsibilities, but your primary role is to increase the efficiency and effectiveness of your employees so they can produce more. Everything you do regarding your employees should be designed to make your staff more productive – to help them achieve meaningful results faster, cheaper and better. This is why you exist as a manger. It is what you do to prove your value, your worth, and your competency as a boss.

Although there are a variety of methods to enhance the performance of your staff, one effective way to improve performance is to be extremely clear regarding your performance expectations and to give candid feedback to your employees about how well or poorly they are performing. 

In addition to the specific tasks you expect your employees to carry out and the actual results you want them to achieve, you probably also have attitudinal or behavioral requirements you expect from your staff as they perform their work.  The overall value, worth, or competence of your employees is determined by how well they carry out their tasks, accomplish results, and meet all of your expectations.


Determining the Value of an Employee


When your employees meet or exceed your expectations, their “value” goes up. When they fail to meet your expectations, their value goes down. Employees who meet or exceed expectations are of higher “worth” to an organization than those who fail to perform or behave as expected. Likewise, employees who perform as expected are deemed to be “competent” in their role, whereas employees who do not perform to standard are viewed as being less competent.

The value, worth or competence of an employee is best expressed in a formula I call the Value Equation (see graphic below). The Value Equation articulates the conditions by which an employee either increases or decreases his or her value, worth, and competence by their actions and behaviors. An employee’s overall value to the organization is determined by assessing the difference between the value of his or her accomplishments minus the cost of his or her performance.


The Value of an employee is defined as the worth of the business results accomplished by the employee.

In addition to specific performance results, an employee’s value or worth to an organization also may include such things as his or her knowledge of the business, relationship with customers, positive influence on other employees, initiative, innovation, reliability, trustworthiness, dependability, or a host of other valuable skills, knowledge, abilities, attitudes, and behaviors. A self-motivated and self-directed employee, for example, has greater value to a manager than an employee who needs constant guidance and prodding before fulfilling a task. An employee who is always on time or who readily works extra hours when needed is of greater value than one who refuses to work overtime or frequently calls in sick.

Just as the value side of the equation includes more indicators than merely the tasks accomplished, the Cost factors entail more than the monetary measurements of wage, salary, benefits, and other compensation-related perks.

The cost of an employee might also include the amount of time a manager has to spend with that individual. Some employees are a pain to manage. The hassle-factor of dealing with some people is extremely draining on a manager and therefore very costly in time, stress, loss of brain cells and the impact on one’s peace of mind. Consequently, someone who performs without supervisory oversight costs less than an employee who only does what is expected when the boss is around. Employees who whine and complain cost more than those who do their jobs cheerfully without grumbling. Similarly, employees who cannot get along with their fellow employees or who are not respected by their peers cost a manager more than those who are team players, who willing help others, who share their expertise, or who work well with others.


An Employee’s Value Margin


Managers are often confronted by low-value employees who adamantly declare just how valuable they are to the company. The employee might vehemently state, for example, how she out-performs other workers and makes more widgets per hour than anyone else. These employees often conclude their declaration by stating that they are the manager’s hardest worker.

Even though these statements might be true, the question remains: At what costs were the valuable results achieved? Sometimes the best worker in the department is also the biggest pain to deal with. The one who accomplishes the most might also be the one who complains the most. The best performer may be the most egocentric and a poor team player.

True value is measured by the margin between the results an employee produces and the costs; including their attitude and behavior entailed in achieving the results.

An employee’s Value Margin is the degree of difference between the results the employee accomplishes and the cost of the employee’s performance. The value margin of an employee expands or diminishes relative to the attitude, behavior, actions, and performance the individual exhibits as he or she carries out his or her job tasks. 

An employee who produces very few results at a great cost to the organization is of little value to the business. Similarly, an employee who produces few results, even though they may not be paid much, also is of little value to the organization. However, an employee who produces a lot, even if their costs are high, may be of great value to the company, provided the margin between the employee’s results and the cost to produce those results is significant enough.

An employee’s overall value and worth to an organization is determined by his or her above the line and below the line qualities.


Determining the Value Margin


You can determine the value of your employees by making a list of the results, performance, skills, behaviors, attitude, or other qualities and characteristics that increase the value of an employee in your estimation. You also should note those things an employee might do that lessen his or her value.

If you take the time to think about it, you already know what would heighten your opinion of an employee and what would diminish it. You can tell, either consciously or unconsciously, when someone is going up in value in your estimation or when they are going down. You make those kinds of judgments about people every day, whether you know it or not. The Value Equation is just a way for you to raise to a conscious level the criteria by which you already judge your employees.


Sharing Your Value Assessment


Once you have the list of values and costs, you can use the list to assess and communicate the value of each employee. You should be honest with your employees and give them candid feedback about where they stand on the value equation.

Unfortunately, many managers fear giving their employees such blunt feedback. They hesitate to tell their high-value employees how much they are valued for fear it will either go to the employee’s head, thereby causing ego problems or the employee to demand more compensation after being told how valuable they are to the organization.

On the opposite end of the spectrum, some managers fear telling low-value employees about their limited value because the manager doesn’t want to damage the self-esteem or face the wrath of the low-value employee when he or she is informed of their limited value. Rather than being specific in their feedback – stating clearly where the employee stands on the value margin – they dance around the issue, hoping the employee will somehow raise their value to the organization without the manager having to mention it specifically.

Sadly, these managers don’t realize the great motivational value in clearly stating an employee’s value to the individual. If, for example, the manager secretly has been hoping a low value employee would quit, informing such an employee of their low value often motivates them to do just that. When a low value employee is told they have low value, they often refuse to continue working at a place where they are not appreciated.


Improving Performance by Declaring One’s Value


 But good managers don’t want their poor employees to quit; they want their employees to improve their performance. Clearly stating an employee’s low value can be the catalyst that finally ignites the improvement process.

During times of economic down-turn most companies try to cut costs. This usually means reducing staff. Baring union contracts or other restrictive policies, the workers normally let go first in a downsizing are those who offer the least value to the organization. The highest value employees have the greatest job security. Consequently, by telling a low value employee where he or she stands on the value equation you help them realize that their job could be in jeopardy if they don’t raise their value. Your candor motivates them to raise their value to the point that it would be worth it to keep the employee, no matter how bad the economy becomes.


Keeping High Value Employees


Finally, it is important to note that high-value employees are worth keeping. If an employee truly is of high worth, then it should be worth it to fight for the employee during times of economic stress. It also should be worth it to a manager to fight for a raise to keep an employee whose value is being recognized by competitor’s trying to woo the employee away with a higher salary.

I always tell my employees that I already know my answer if they ever come to me asking for a raise. My answer is an immediate yes. I know I will give an employee a raise. It’s just a matter of when. I will give an employee a raise when he or she is worth it. I will give an employee a raise when his or her value is so high it would be foolish not to. I already know I will give an employee a raise; I just don’t know when or for how much. The amount will depend on the employee’s value, worth and competence. §


Innovative Management Group offers a variety of executive, management and supervisory training programs designed to raise the value, worth and competence of both the manager and the employee. Please contact us at for a list of the courses we offer.


Mac McIntire is the president of Innovative Management Group, a Wyoming-based training and consulting firm specializing in strategic visioning and alignment, organizational effectiveness, quality improvement, and teamwork. He can be reached at 702-592-6431 or e-mail His website is


10:12 am am  02-25-15
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