REWARD STRATEGY
Best performers cite pay dissatisfaction as main reason for leaving
A survey by Watson Wyatt in the US has found that top-performing employees rate dissatisfaction with pay as the number one reason why they leave their companies, followed by discontent with management and lack of promotion opportunities.
If their company faced financial difficulties and needed to cut costs, only 2% of high-calibre employees said companies should first cut their benefits or reduce their salaries and bonuses. In fact Watson Wyatt's survey found that most employees would rather give up their stock-based rewards and skill and career development opportunities than have their benefits or annual pay and bonuses reduced to help their companies address financial difficulties. As many as 47% said they would prefer to lose their stock-based rewards first.
"Companies interested in retaining top-performing employees need to make certain they are using their rewards programmes to distinguish between top performing and average employees," said Laura Sejen, Watson Wyatt's national practice leader for strategic rewards.
"Despite research that shows that such distinctions matter, fewer than 40% of top-performing employees believe they receive moderately or significantly better pay raises, annual bonuses or total pay than do employees with average performance."
Other key survey results
Customised rewards linked to improved financial performance: Companies that provide tailored reward programmes to employees have median three-year total returns to shareholders (TRS) levels that are nearly double those of organisations that do not.
Top performers value certain monetary and non-monetary rewards programmes more than others: When it comes to monetary rewards, top performers place the highest value on annual bonuses, stock grants and project incentives. The most valuable non-monetary rewards, according to high performers, are flexible schedules, advancement opportunities, and work-at-home arrangements.
Pan-European research
The key findings of Watson Wyatt's European stategic reward survey were reviewed by e-reward.co.uk this summer. Based on information received from 170 major employers across nine European countries, as well as data from 2,000 high-performing employees in a sample of these businesses, it found that high-performing businesses are much more likely to link reward strategy to business goals and are significantly more likely to report programmes as being flexible.
"Reward strategy can deliver superior performance" was posted in our news section on 24 July 2002.
Want to know more?
Title: Strategic Rewards: Charting the course forward - maximizing the value of reward programmes, Watson Wyatt.
Methodology: The survey is based on information received from 431 companies across the US. Watson Wyatt also polled more than 3,000 employees.
Availability: Visit the Watson Wyatt web site for more details at www.watsonwyatt.com
To read a copy of the press release online, jump to www.watsonwyatt.com/news/press.asp?ID=10469
Take a look at the executive summary at www.watsonwyatt.com/research/resrender.asp?id=W-572& page=1
Watson Wyatt & Co. is an international human capital consulting firm that provides services in the areas of employee benefits, human resources technologies and human capital strategies. The firm has headquarters in Washington DC, and has more than 4,250 associates in 61 offices in the Americas and Asia-Pacific.
www.watsonwyatt.com