REWARD MANAGEMENT
Staff demand more information about how pay is set
Employees are not satisfied with the way salaries are determined and communicated, according to a large-scale research project undertaken by WordatWork, formerly the American Compensation Association, and consulting firm Sibson & Company.
The survey found that only half of respondents were somewhat satisfied or very satisfied with the process used to establish and communicate reward, compared with seven in ten who were happy with their overall salaries.
The pay process concerns the raft of decisions that establish an individual’ s salary level: how promotions are decided how jobs are assigned to grades and how people move to higher grades and better-paying jobs.
However, the results of the 1,218-employee survey may not be such bad news for employers. As the authors of the report observe: Pay level challenges usually required large sums of money to solve, whereas pay process solutions may require changes only in how widely the pay process decisions are shared and communicated.
Rewards of work model
The underlying basis for this major investigation into the attitudes of US and Canadian employees is the Rewards of Work (ROW) model, a diagnostic tool for thinking about reward.
In the essence, the model consists of five reward categories . . .
| Reward | Examples |
| Direct financial | Salary, incentives, ownership, pay process and premia |
| Indirect financial | Benefits, non-cash recognition and perks |
| Work content | The work itself, feedback, autonomy and challenge |
| Career | Advancement, growth, training and security |
| Affiliation | Organisation commitment and support and work environment |
Source: The Rewards of Work survey.
Retention, motivation and satisfaction
When employees were asked to rate the importance of the five different types of reward in their decision to stay with their current employers and in motivating higher levels of performance, the most clear finding to emerge was that no one reward element is overwhelmingly more important than the others are .
A separate question examined employees’ overall satisfaction with the five reward categories. What is most striking is that employee desires for career rewards are the least satisfied, with only 68% of respondents indicating that they are happy with this element of the total reward package.
As the researchers observe, this is a particularly noteworthy finding in an era when more and more companies reckon that they can longer offer the kind of careers that were commonplace a generation ago.
Words of wisdom
The low levels of career satisfaction indicate that there are desires for long-term advancement that remain unquenched. Employers able to offer more opportunities for advancement and development may reap the benefits.
The truth about stock options
The received wisdom is that stock options help give employers the edge in the war of talent and at the same time boost employee productivity. However, it’ s an area renowned for a paucity of empirical data: practice has outpaced research. Examining the results of the Rewards of Work survey enabled the researchers to put such assumptions to the test.
The survey, in fact, offers little support for the view that options represent an effective recruitment tool. What’ s more, they are not a great motivation tool: only a quarter of respondents agreed that stock plans strongly influence my day-to-day behaviour .
Words of wisdom
It was found that stock options do not have strong effects on behaviour or performance unless equity represents a high value in the overall compensation mix, but that even at lower levels, stock options have a positive effect on organisation culture.
Want to know more?
Title: The Rewards of work, by Paul W Mulvey, Gerald E Ledford, Peter V Blanc.
Methodology: the 68-page report is based on a large-scale research project co-sponsored by WorldatWork and Sibson & Company examining employee attitudes toward a wide range of monetary and no-monetary rewards. It draws on telephone interviews with US and Canadian employees.
Sample size: 1,218 US adult respondents who worked 20 or more hours a week. Of these 210 were high-technology workers, while 384 were supervisors, managers or executives. Respondents were reasonably representative of the US private sector in terms of race, gender, unionisation and job level.
Availability: contact WorldatWork, 14040 N. Northsight Blvd, Scottsdale, Arizona, USA AZ 85260, tel: 001 480 951 9191 or email worldatworkjournal@worldatwork.org
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