Driving Employee Engagement Requires Baseline of Competitive, Fair Pay

In the last week, a couple of research reviews have crossed my desk, both summarizing decades of research, surveys and analysis in the complex and many-layered topics of employee recognition, engagement and retention.

The first research review is from IBM Smarter Workforce Institute: “How do I recognize thee, let me count the ways.” Key findings of the report include (quoting):

• Employees who receive recognition are more likely to be engaged at work. The engagement level of employees who receive recognition is almost three times higher (76%) than the engagement level of those who do not (28%).
• Workers who receive recognition are less likely to quit. Without recognition, about half (51 percent) of surveyed employees say they intend to leave, with recognition just one quarter (25 percent) say they intend to leave their organizations.
• Employees whose organizations use multiple communication channels for recognition are more likely to feel appreciated and show a higher level of employee engagement. The more channels used for recognition, the higher the employee engagement level.
• The findings imply that technologies such as social and mobile could be strong candidates for the effective delivery of recognition as they offer interactive, frequent and immediate communication via multiple channels.

The focus of the review is on why multiple channels for recognition matter, largely driving to how multiple channels naturally increases the immediacy, timeliness and frequency of recognition, thereby increasing employees’ sense of feeling noticed and appreciated for their efforts.

Broadening this look at the drivers of employee engagement is Josh Bersin’s article “Becoming irresistible: A new model for employee engagement” from Issue 16 of the Deloitte Review. Observing that the employee-work contract has changed once again largely due to the “radical changes” in how we work (e.g., vastly increased passive candidate recruitment, flat organizations, increased desire for rapid rotation of duties and responsibilities, and 24x7 connection), Bersin offers a “refreshed model for engagement…of five major elements (and 20 underlying strategies) that work together to make organizations ‘irresistable.’”

Here’s the model:

 

Interestingly, Bersin took the time to explain why this model does not include what we all know is a very important element of employee satisfaction – compensation. The refreshed model for engagement doesn’t include compensation because compensation is a “hygiene factor” necessary for satisfaction, but not deeper engagement. Compensation must be fair and appropriate or people will leave. But once that bar is met for compensation, simply increasing pay alone will rarely increase engagement as well. The 20 factors described above, however, can have a much greater impact on engagement in environments where “pay is competitive and fair.”

So the question becomes, are we confident that our compensation structures are competitive and fair? Have we satisfied this important hygiene factor so we can effect true change for our employees? If we have, what’s holding us back from addressing the elements that truly drive employee engagement and thereby increased productivity, performance and profit?

As Globoforce’s Vice President of Client Strategy and Consulting, Derek Irvine is an internationally minded management professional with over 20 years of experience helping global companies set a higher ambition for global strategic employee recognition, leading workshops, strategy meetings and industry sessions around the world. He is the co-author of "The Power of Thanks" and his articles on fostering and managing a culture of appreciation through strategic recognition have been published in Businessweek, Workspan and HR Management. Derek splits his time between Dublin and Boston. Follow Derek on Twitter at @DerekIrvine.

Comments

[E. James (Jim) Brennan]

Great summary, Derek, of many elements most prized by the Generation Y Millenials who constitute the current and future workforce. They consider those environments much more valuable and desirable than prior generations. Enterprises still holding tightly to reward systems based on the typical expectations and behavior patterns of older workers will soon encounter problems if they ignore your points. Just a guess, of course...