When we think of employee rewards, a pay rise, bonus or profit share is often the most commonly thought of reward that comes to mind. Yet, this is no coincidence; if you read through numerous professional development articles or HR publications, you’ll commonly find pieces which discuss how employees should make their case when asking for a pay rise, or to employers on how to structure such policies.
However, beyond a pay rise, there are other benefits and rewards that can be offered to employees – and it’s becoming a priority for staff who are relatively happy with their pay. A study uncovered that 90% of employees haven’t raised concerns over pay, and Gen Z and Gen Y would like businesses to reconsider how else staff are rewarded. Furthermore, a third of both groups said that they would join an organisation which had better benefits.
Taking money out of the equation, happiness was found to increase productivity by 12%, with unhappy employees an estimated 10% less productive. So, if money isn’t necessarily driving happiness, what is?
A valued employee is far more likely to lead a business to prosper, therefore it’s essential that employers understand what leads an employee to feel valued, including what motivates them. This will vary, of course, from employee to employee – what motivates one, may not be of interest to another. Likewise, what one views as a reward, the other may not. This means that reward and benefits need to be put into the context of each organisation and individual.
Extrinsic rewards, which covers pay, bonuses and benefits, have long been an integral part of reward strategies, yet there has been a movement to organisations placing greater focus on intrinsic rewards, which cover the psychological benefits that are gained through work.
This has largely been changed by technological development at work; routine-based job roles were reliant upon pay to be used as a key motivator. Yet, opportunities have been created within organisations which have led to alternative rewards being offered – particularly for initiative driven job roles.
As Dan Pink, an established author on work, management and motivation, famously said, ‘pay people enough to take the issue of money off the table’. And while it is indeed one of the largest motivating factors in the workplace, if this is removed from the equation, what else are you offering your employees?
Once pay has been taken care of, rewards then focus on working environment, culture and personal development – factors which are vital to employee happiness. Your businesses should demonstrate values which prove that you take staff happiness seriously – and this shouldn’t just be something which you promote to new starters as an incentive, this belief should run throughout your business and be at the core of your reward offering.
Appreciation is one of the most undervalued rewards that you can offer as an employer. People want to feel as though the work they are doing is appreciated, therefore you should also consider if you have the correct channels for this to measured and rewarded. An employee who feels replaceable and undervalued is far more likely to leave for this reason, than a financial one.
With the gig economy transforming the future of employment and challenging workplace norms, flexible working and holiday benefits are an increasing priority for many. With a work/life balance a key concern for many who want to improve their home needs, while still pursuing their career, readdressing the balance will improve motivation levels and work ethic too.
Recognising what individuals bring to an organisation is also essential, and ensuring that you develop ownership in terms of the role and career path that an employee is on. Allow your staff to feel empowered in their position, own their responsibilities and think with an entrepreneurial, innovative spirit. Behaviour such as this should be encouraged and will improve on a personal level how an employee feels about their role in the business.
If you feel that your current reward strategy is being pigeon-holed into just focusing on pay, then separate it into four key areas, such as pay, benefits, personal growth and culture. Once you’ve ticked the pay box, you can then begin to have a meaningful discussion on the intrinsic rewards that you should be offering.
In order for businesses to reconsider how the rewards they are including in their strategy are motivating employees, pay and benefits need to be removed as basic satisfiers, and cultural, engagement and development rewards added to the list.