Take Five: Connecting Reward Practitioners & Research - #1 Why & How Reward Satisfaction Matters

Take Five is a new feature at the Compensation Cafe, in partnership with the Compensation & Benefits Review.  The goal of our partnership is to connect and open opportunities for collaboration between reward practitioners and academics doing research in the rewards field.  Each Take Five will highlight recent rewards research via a Five Question Interview with a  member of the academic research team on key takeaways and practical lessons from their findings.  In Take Five #1 we spotlight research conducted by Anais Thibault Landry and Ashley Whillans, featured recently in a Compensation & Benefits Review article titled The Power of Workplace Rewards: Using Self-Determination Theory to Understand Why Reward Satisfaction Matters for Workers Around the World (link is time limited, active 2 months from publication of this post). 

Research Overview Paragraph

Ashley Whillans of Harvard Business School and Anais Thibault Landry of the University of Quebec in Montreal (brief bios below) have undertaken and published research aimed at understanding how reward satisfaction drives not only employee well-being and engagement but also important organizational outcomes.  They investigate the role of three universal psychological needs – autonomy, competence and relatedness – in illuminating whether and why reward satisfaction matters for employees as well as the organizations in which they work.  Data to test their hypothesis was drawn from over 5,000 full-time employees in different professions and industries and across six global regions encompassing twelve different countries. 

Note to practitioners: The researchers have defined rewards here to include cash (incentives, stock ownership), cash-like (gift cards), non-cash (merchandise, redeemable points) and development opportunities – and to exclude base salaries and benefits.

Our special thanks to Ashley Whillans for taking time from her busy schedule for this Five Question Interview! 

Question 1:  You and your colleague write that the results of this research “emphasize the importance of looking beyond the compensation that employees receive to understand what these rewards signal to employees and how rewards make them feel.”  Can you elaborate on this key point?

Ashley: Rewards are not just about money.  It’s easy to get stuck in a transactional mindset.  A reward is not just what the employee receives, a financial transaction, but also what that reward signals to the employee.  What we found is that the sentiment of the reward matters more than the content of the reward.  It’s less important what the reward is and more important how the reward makes the employee feel.

Question 2:  You collected data from workers around the globe. What conclusions did you draw from your cross-cultural findings?  In what ways do we seem to be similar relative to reward satisfaction around the globe?  Did you observe any interesting difference across the global regions?

Ashley: We expected and really looked for differences across cultures – and did not find them.  There were no significant differences across the global regions.  What impacts reward satisfaction and best predicts the positive organizational outcomes is receiving rewards that satisfy the universal psychological needs of autonomy, competence and relatedness for diverse employees worldwide.

Question 3:  You also collected data from different industries and organization sizes.  What do your findings suggest about the similarities and/or the differences in reward satisfaction across different organizational settings?

Ashley: Our findings relative to different industries and organization sizes were similar to those for global regions; for the constellation of factors that make up reward satisfaction there were no significant differences across organizational settings.    

Question 4:  You and your colleague highlighted several recommendations for future research and exploration relative to your findings.  What is the one question that you would put on the top of your list for future study?

Ashley: The data in this research is correlational, not causal.  There may, in fact, be reverse causality at play here.  For example, great workplaces may satisfy the universal psychological needs which then cause employees to view their rewards positively.  With that, our next step is to run experiments to test this, to seek causal evidence that sentiment associated with the reward matters more than the type of reward, that the sentiment drives the positive outcomes.  There have not been a lot of rigorous experiments done in this area.

Question 5:  In closing, is there a particular lesson or insight from your research that you would highlight for the practitioners who follow this blog, that they can take back to their own jobs and workplaces?

Ashley: I think the lesson for practitioners is that what really matters in the workplace is that employees feel appreciated and connected.  Rewards that signal to employees that they did a good job and that their manager cares about them will encourage employees to work even harder.  Remember that in designing and delivering rewards plans the reward is not just what the employee receives, but how it makes them feel.

Biographies

Anaïs Thibault Landry completed her PhD in industrial and organizational psychology at the Université du Québec à Montréal. Her research work aims to better understand the link between compensation, motivation, performance, and psychological health from a self-determination theory perspective. Specializing in psychometrics and statistics, Anaïs currently works as a consultant for consulting firms in Montreal.

Ashley Whillans obtained her PhD in Social Psychology at the University of British Columbia. Currently, she is an assistant professor in the Negotiation, Organizations & Markets Unit at the Harvard Business School. Her ongoing research investigates whether and how intangible incentives affect employee motivation and well-being. She consults for private and non-profit organizations.

Hey Readers - Interested in Being Involved? 

Take Five Interviews: We'd love to hear from interested Cafe readers who might wish to join in and take on a Five Question Interview featuring a piece of research that appeals to you personally or professionally.  A fun/easy way to exercise your writing chops and get exposed to new ideas in the field!  For more info, email Ann at [email protected]

Compensation & Benefits Review: CBR would love to hear from practitioners who are interested in learning more about authoring journal articles. Up front now is a Call for papers for an exciting special issue on the inadvertent consequences of dual-income households from Guest Editors: Ashley Whillans and Allan Schweyer.   Some great additional information is available here for Sage Publishing overall and here for information specific to CBR.  Finally, CBR Editor-in-Chief Dr. Phil Bryant is generously making himself available for questions and guidance - please reach out to him at [email protected].

Comments, questions, feedback, ideas?  Hit us up in the Comments below!

Comments

[Joe Thompson]

Ann, Thank you for this inaugural Take Five!

The findings Ashley cites are speak to fact that the workplace remains a social setting and that employees want to feel connected. I suspect that, in addition to the reverse causality she's hypothesized, there may be an aspect of pay-as-hygiene-factor at play. That is, the degree to which rewards make an employee feel appreciated will depend on the degree to which they feel that their base compensation is fair and meets their basic needs.

But, again, thanks for bringing this to the Cafe.

[Ann Bares]

Hi Joe,

Thanks for the comment!

Great point on the potential presence of a pay-as-hygiene-factor influence. I agree that this dynamic is likely to be in the mix as well.

Ann