United Kingdom

Employee engagement pay and reward

January 2015


Employee engagement can be improved by the use of fair and effective pay and reward strategies, Workplace Savings & Benefits reports.

Citing several research studies which have taken place over the past year by organisations such as the Chartered Institute of Personnel and Development (CIPD), gift card company One4all and ING Investment Management, Workplace Savings & Benefits concluded there was a strong business case for reviewing pre-existing pay and reward schemes. Schemes which focus on fairness and employee collaboration not only improve staff loyalty, but productivity, too.

In particular, the One4all study last June found that 68 per cent of employees would be more loyal to their employers if they were regularly thanked for their work and expert views from ING Investment Management stated that employee satisfaction was a ‘key driver’ of company performance.

Jonny Gifford, CIPD researcher and author of the CIPD’s November report into the application of behavioural science in human resources, pointed out that financial rewards were not always the ‘straightforward motivator’ when it came to staff loyalty and productivity. A better understanding of the type of factors that might be potential motivators would provide a basis for a more effective remuneration and reward system, he said.

Speaking to Workplace Savings & Benefits, Gifford advised employers to monitor the positive or negative impacts their schemes might be having on staff in order to prevent them from becoming counter-intuitive:

“You need to understand what impact [such schemes are] having on behaviour,” he said. “Even if it’s just a question of talking to people within the organisation – understanding people’s views, how different incentives and recognition schemes work, and how they perceive it. A big alarm bell should be ringing if they perceive it to be unfair, as much of this is underpinned by the fairness and psychology of that.”

However, Martha How, Reward Partner at Aon Employee Benefits argued recently that the smart reward approach in particular would have more of a positive and engaging impact on the workforce than the traditional total reward approach due to the focus on core values, shared responsibility between employers and employees for health and savings benefits, flexibility and improved communication.

Writing recently in The HR Director, she explained: “Average UK employee engagement levels dropped significantly from 2008 and are only just slowly recovering… Moreover, the workplace has become stretched between ‘haves’ and ‘have-nots’: there is a growing divide between employees who are better paid, long serving and well provisioned for with benefits and those on low earnings and with low or no personal savings or health provision. In the UK, the ‘have-nots’ may well account for more than 75 percent of the workforce.”

She added: “This is why we need smart reward which favours shared responsibility between employer and employee. The smart approach is more efficient, more engaging and much more relevant and valuable for today’s diverse workforce.”




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