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‘Just Give Me the Cash’ Do Non-Financial Rewards Really
Motivate as well as Money?
Stephen Overell
Associate Director
The Work Foundation
©The Work Foundation
So what makes for a meaningful job?
• Social purpose – doing something useful to others
• Moral correctness - the justifiability of work processes and
results
• Achievement-related pleasure -enjoying job and developing
potential
• Autonomy - use of skills and judgement
• Recognition - adequate salary and affirmation
• Positive relationships - trust and interesting contact
Source: Estelle Morin, The Meaning of Work in Modern Times, studies since 1997
©The Work Foundation
Differing orientations towards work
•
Apathetic workers: Work is unimportant, low financial expectations, moderate expression,
low sense of obligation, modest entitlement, moderate work quality, half under 30, not highly
motivated, some skills used, moderate responsibility. (12.1%)
•
Alienated workers: Low work centrality, low expressive values, relatively high obligations.
Non supervisory roles, high proportion of young and female. (19.4%)
•
Economic workers: Very high economic work goals, low expression, entitlement norms
higher than obligation norms, low work quality, repetitive jobs, low autonomy. (13.1%)
•
High rights and duty economic workers: High economic work goals, but both strong
entitlement and obligation, tend to be older, male, low education.(8.3%)
•
Techno-bureaucratic workers: Low economic goals, high identity with employers, above
average income and feeling of belonging, low sense of entitlement, moderate work
centrality, high occupational satisfaction, half would choose same job again. (5.6%)
•
Duty-oriented social contribution workers: High work centrality, low economic, but high
expressive orientation, above average education, 25 % above 50, keen to contribute to
society. (12.1%)
•
Work-centred expressive: High work centrality, expressive orientation, high job quality,
high education, wide variety, good skill utilization, high for managers and professionals, high
income. (10.9%)
•
Work centred and balanced values workers: Balance between economic and expressive
orientations, typically middle aged and male, job responsibility and skill utilization above
average, across occupational categories, high work involvement and working hours. (18.5%)
Source: The Meaning of Working, 1987 – 15,000 workers in 8 countries – 8 key orientations to work
©The Work Foundation
Money and meaning
• No one meaning predominates. But economic meaning comes
out highest (63.2%).
• Task (50.4%), social contribution (33.8%), adding value to
something (41.1%) and a feeling of belonging (29%) also very
important.
• Strong resistance to identifying work with unpleasantness or
meaninglessness.
• 86 per cent said they would continue to work even if they had
enough money to live comfortably for the rest of their life
• Other studies – from Affluent Worker in 1960s, to New Economy
studies found broadly similar things.
©The Work Foundation
What do people want from work?
The Gallup Organization surveyed 80,000 managers in 400 companies on what
matters to workers. Core 12 are:
1) Do I know what is expected of me at work?
2) Do I have the materials and equipment I need to do my work right?
3) At work, do I have the opportunity to do what I do best every day?
4) In the last seven days, have I received recognition or praise for good work?
5) Does my supervisor, or someone at work, seem to care about me as a
person?
6) Is there someone at work who encourages my development?
7) At work, do my opinions seem to count?
8) Does the mission/purpose of my company make me feel like my work is
important?
9) Are my co-workers committed to doing quality work?
10) Do I have a best friend at work?
11) In the last six months, have I talked with someone about my progress?
12) At work, have I had the opportunities to learn and grow?
Source: Gallup
©The Work Foundation
What is Good Work?
•
Performance: that work helps employers perform efficiently and is
directed towards excellence in delivering goods and services; and that
it develops the sense of pride and craft that potentially lives in all types
of work;
•
Engagement: that work engages the creative potential of human
beings and adds to their capabilities through extending autonomy,
control and task discretion; and that work is based on strong workplace
relationships (social capital);
•
Fairness: that jobs are of decent quality; that they enable and
encourage individual security and wellbeing; and are founded on
respect for rights, procedural justice and a balance between effort and
reward.
©The Work Foundation
Job Satisfaction in the UK
% of employees
Very satisfied
Satisfied
Neither
Dissatisfied
Very dissatisfied
Sense of
achievement
18
52
19
8
3
Scope for
using initiative
20
52
18
8
3
Influence over
job
12
45
28
11
3
Training
11
40
26
16
7
Pay
4
31
24
28
13
Job security
13
50
22
11
5
Work itself
17
55
19
7
3
Involvement in
decisionmaking
8
30
39
17
6
Source: Workplace Employment Relations Survey, Job Satisfaction, Inside the Workplace, Kersley, B, et al. (2004), 33.
©The Work Foundation
Claims made for pay
• Attraction of staff
Moderate support
• Improving quantity
Moderate support
• Improving quality
Weak support
• Improving attendance
Weak support
• Improving retention
Weak support
• Improving teamwork
Weak support
©The Work Foundation
Conventional Wisdom on Pay
• Motivation is…’how behaviour gets started,
sustained, stopped and what subjective reaction is
present while all this is going on’
• Nobody is agnostic about the link between pay &
motivation
• Evidence is patchy & contradictory
• Most analysts agree that pay does motivate, but only
weakly relative to other drivers – and that getting it
wrong is both easy and damaging
©The Work Foundation
Alfie Kohn
• PRP punishes. A promised reward that is not received is
psychologically as bad as a punishment
• PRP ruptures relations. High performance often requires
teamwork. This can be damaged in a divisive win:lose climate
• PRP ignores reason. If a company is not performing, to simply
offer a financial incentive to bolster performance ignores the
many possible root causes. If the only tool in the box is a
hammer, then everything gets made to look like a nail
• PRP deters risk taking. When money is at stake, individuals
are far more likely to take the easy, tried and tested option which
may sub-optimise the desired outcome
• PRP undermines interest. The enjoyment of a task is a far
more powerful influence than any incentive can be
©The Work Foundation
CLC Study of 17,000 Employees
• Employee commitment is the central driver of employee
performance and that pay satisfaction is a poor
predictor of such commitment
• Employee perception of pay fairness was a 25 times
stronger predictor of employee commitment than pay
satisfaction
• Pay process fairness is the most important element of
overall pay fairness
• Every 10% improvement in ‘process fairness
perception’ increases employee commitment levels by
5%, leading to a 2% increase in discretionary effort
©The Work Foundation
The Mixed Model: Financial and Non-Financial
Reward in Tandem?
• The difference between a ‘reward’ and an
‘incentive’ is important to clarify…
• …as is the behaviour or performance being
rewarded or incentivised…
• …and how this will be measured
• It is essential that both managers and
employees are clear where both fit in the
overall reward ‘strategy’
©The Work Foundation
Positioning Reward Strategy
Business Strategy
HR Strategy
Reward Strategy
Base Pay
‘Architecture’
Variable Pay
Processes
Employee
Benefits
Non-Pay Reward & Recognition
©The Work Foundation
What is meant by a non-financial reward?
•
Thank you
•
Learning Opportunities
•
Exposure
•
Career Progression
•
Formal recognition
•
Non-cash Gifts
©The Work Foundation
Non-pay rewards can...
Recognise that motivation is complex and not just about money –
other forms of recognition can be more important to the individual
Communicate the organisation’s values and performance objectives
Drive and support desired behaviour by indicating what sort of
behaviour will be rewarded
Produce significant performance leverage and motivation, often at
disproportionately low cost.
Compete in the employment market by offering competitive
packages which attract and retain good quality staff
©The Work Foundation
Non-pay rewards & recognition framework
Attribute
Choice
Considerations
Focus
Orientation
Payment
Structure
Timing
Value
Location
Nominated by
Rewarding
individual or team
incentive or reward
cash or non-cash
discretionary or formula-driven
immediate or deferred
high value or symbolic
department-wide or local
management or self
effort or outputs
Defining teams, equity
Up-front or retrospective?
Propriety, value
Equity, inflexibility
Desired impact
What motivates?
Flexibility, consistency
Rewards or awards?
Results or behaviour, equity
©The Work Foundation
Measuring Impact - Impact on What?
• Recruitment, motivation, engagement,
retention, innovation, teamwork, equality,
performance & productivity?
• A question of attribution
• Evidence of a direct and sizeable causal
impact is weak
• Reward can reinforce existing initiatives &
practices, but will rarely drive them
©The Work Foundation
Measures
• Vacancy rates
• Employee survey data
• Exit data
• Evaluations of PRP/merit systems
• Equal pay audits
©The Work Foundation
Future Challenges
• More realism about the motivational impact
of rewards
• Non-pay reward & recognition can work, so
too can team pay
• Line management capacity – ‘scheme’
versus everyday good management
• Simplicity wins every time
©The Work Foundation