As I start to write, I'm humming the Beatles tune of a similar title in my head. Their lyrics were poetic and prophetic, even when it comes to matters of the heart at work, because money can't buy workplace love.
That's not to say that many a manager and employer haven't tried to use money to counter other deficiencies in treating/managing/leading/recognizing/rewarding their workforces, but it rarely works as intended. In today's world of commonplace mass layoffs, "doing more with less" and "working smarter, not harder" a few extra bucks isn't going to buy a Whole Lotta Love (I'm starting to hear another classic coming on..., but I digress).
Don't get me wrong; people work for money, and so market competitiveness, especially for base pay, is critical to the ubiquitous "attract, motivate and retain" objective we often hear mentioned. (Base pay is mostly for the "attract" part, and to a slightly lesser degree the "retain" element; not so much for the "motivate" part, but that's a post for another day). Because cash compensation is so important, it's critical to make sure the cash elements of your reward programs are competitive with the relevant external labor markets in which you compete for talent.
But if you think you can buy workplace love, engagement, loyalty, or commitment, you're mostly dead wrong. Some people can be bought psychologically, but not that many (excluding politicians, of course!).
Substantial research confirms the disconnect between money and commitment or engagement at work. For instance, a recent study conducted by WorldatWork (membership may be required to view study results), in collaboration with the Hay Group and others, confirms that indeed, non-pay elements of the total work experience are the key drivers of employee commitment and engagement.
The study, a survey of hundreds of compensation/rewards professionals, reports that organizations realized better outcomes in their efforts to "engage" employees if non-HR employees were also involved in the development of reward and engagement efforts. Regarding key reward elements, "non-financial rewards, as opposed to financial rewards, are viewed as having more impact on employee engagement," says Tom McMullen of the Hay Group. He goes onto say that "quality of work, career development, organizational climate, and work-life balance have a greater perceived impact on employee engagement than financial rewards."
The perceived quality of managers and top leaders are also more important than financial rewards on impacting engagement. "Quality of leadership has a profound impact on employee engagement and motivation" says Paul Rowson of WorldatWork, who also says that "organizations must think it terms of total rewards and not just financial rewards if they are to enhance employee involvement, commitment, job satisfaction - and performance."
Assuming your compensation levels are already competitive, the next time a weak manager seeks approval to use increased pay to enhance retention or morale, maybe we should be thinking about fixing the manager, rather than throwing money down the drain of worker discontent (with their management and/or leadership).
You may have heard the phrase that employees join companies, but they leave their managers - this is so true (just think about the last really bad manager you worked for). Of course, some will leave for more money or opportunity elsewhere, for sure, but when people are poorly treated and/or managed, virtually all of them want to leave!
Once your workforce is paid fully competitively, additional reward dollars would be better spent on programs and actions that enhance culture, employee commitment and engagement, and ones that strengthen your management and leadership.
Don't try to buy employee love and loyalty; earn it instead. It's cheaper, and more effective.
Doug Sayed is principal and founder of Applied HR Strategies, Inc., a Seattle-based compensation consultancy, and developer of the StrategicPay Series, a series of hands on, "do it yourself" guides for developing your own strategic compensation programs.
Well said. All rewards don't jingle. Most folks can't remember exactly where their last pay increase went or how they spent their bonus money, but that $25 plaque they were awarded for (whatever, whenever) will remain on their ego wall reinforcing them for decades.
Posted by: E. James (Jim) Brennan | 07/19/2010 at 01:18 PM
Great post, Laura. A recent survey in SmartBrief Leadership showed 30% thinking cold hard cash is the best "reward." But then 66% voted for recognition in some form from colleagues, customers, supervisors, etc. Some can be "bought" (or think they can), but most know what they need to keep themselves energized and focused -- simple appreciation and recognition for their efforts.
Posted by: Derek Irvine, Globoforce | 07/24/2010 at 06:25 AM