Motivation and Reward: presentation to e.reward conference

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Motivation and Rewardpresentation to e.reward
conference

• Peter Reilly

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Agenda

• The terms of debate
• The importance of motivation
• Link between motivation and reward
• How to develop workforce motivation through
  reward

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Words, words, words
Engagement
Motivation
Commitment
Citizenship
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What does motivation deliver?

• Lower staff turnover
• Better attendance
• Improved safety
• Beneficial engaged behaviours
• taking initiative
• wanting to develop
• organisationally aligned

Inputs
Outputs

• Higher productivity
• Improved customer service

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Some evidence

• Corporate Leadership Council
• the most engaged employees perform 20 better
  than the average and 87 less likely to leave
• Gallup/CIPD
• positive health
• lower sick leave taken
• SHRM
• better safety performance
• Salanova et al.
• improved customer service
• Cohen
• lower intention to leave

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IES service-profit-chain model
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Service satisfaction chain in government
Confidence ingovernment
Servicequality
Services perceived tomeet needs
Servicesperceived tobe beneficial
Canadian Government
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Employee input to service
Employeesatisfaction/commitment
Clientservicesatisfaction
Citizen trust/confidence ingovernment
Work environment Fair pay Perception of
management Career development
TimelinesscompetenceCourtesyFairness Outcome
Social/cultural factors Government
performance Service satisfactionService
benefit Service adequacy
Canadian Government
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Link between Motivation and Reward
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The positive impact of reward

• Corporate Leadership Council
• Connecting pay to performance has the greatest
  effect on discretionary effort
• Guzzo et al.
• Financial incentives had a greater effect on
  commitment than a wide range of motivational
  levers training, work design, etc.
• The Work Foundation
• The higher proportion of staff getting PRP, the
  higher organisational added value

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Pay practice cont.

• The WorldatWork
• PRPs impact on engagement
• Improved for 57 among top performers
• Improved for 30 for average performers
• Improved for 12 for low performers
• York University Canada
• Those who received performance feedback linked
  reward were more satisfied with pay than those
  without an appraisal or PRP not linked to
  appraisal.
• IES
• Pay and benefits links to employee engagementin
  the NHS

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The negative side of poor reward

• CIPD top 3 factors leading to work disengagement
• the way the organisation is managed
• chances for promotion
• the pay package

• Poor communication of reward leads to employee
  dissatisfaction (LeBlanc)
• Staff in public sector resent systems that seem
  designed for naturally shirking employees
  (Henry)
• Managers key objective is maintain trust and
  relationships with staff, so IPRP is operated to
  maintain equity not reward high performers
  (Harris)

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There are other factors

• Importance of equity
• Employees are more concerned with fairness and
  equity than with levels of pay (Towers Perrin)
• People are uncomfortable about being better
  rewarded than others - depending on the social
  setting (Adams)
• Satisfaction
• Organisational commitment was more strongly
  related to pay satisfaction than to actual income
  (Cohen and Gattiker)

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There are other factors, cont

• Process
• Pay fairness (particularly process fairness) 25
  times stronger predictor of employee commitment
  than pay satisfaction (Compensation Round Table)
• Understanding
• Pay knowledge is associated with organisational
  effectiveness and pay satisfaction (LeBlanc Group)

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WorldAtWork knowledge of pay model
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To sum up

• In some circumstances financial rewards can
  increase motivation when
• its a proxy for value?
• its a symbol of competence?
• pay is low and vital to survival?
• its a matter of mutual dependence?
• there are no better alternatives?
• when it is the occupational norm?

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To sum up, cont.

• For others financial reward a hygiene factor ?
  get it wrong problems result
• Fairness, understanding satisfaction (more
  than level) seem to be important
• Different reward systems produce different
  results, depending upon aims
• Merit increase v bonus
• Team/group v individual
• Incentive v recognition

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What Actions Can You Take?
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Understand your workforce
The cat bringing you a dead rat as a reward
shows that the cat knows nothing of what
interests you
Graham White HR DirectorWestminster City Council
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Measure motivation, etc
Surveys, surveys, surveys
The engagement index

• Gallup Q12
• Towers Perrin
• Saratoga
• Hewitts
• Valuentis
• Hay
• ISR
• YouGov
• etc., etc.
• Own company approach

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Understand differences
Motivation varies by

• Personal/job characteristics
• age
• grade/role/occupation
• length of service
• ethnicity
• gender
• Work experiences
• harassment/bullying/work accidents
• interactions with managers(especially appraisal
  and development)
• Individual attitudes

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Examine linkages

• How does motivation link to
• organisational performance/profitability
• productivity
• quality levels/innovation evidence
• customer satisfaction etc
• resignation rate (and intention to stay)
• absence statistics
• performance indicators
• pay level and size of award (base/bonus)
• benefit take up
• reward policy change

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Some tools

• Total reward

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Michael Armstrongs definition of total reward
Total reward includes all types of reward ?
non-financial as well as financial, indirect as
well as direct, intrinsic as well as intrinsic.
It is a value proposition which embraces
everything that people value in the employment
relationship and is developed and implemented as
an integrated and coherent whole.
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WorldatWorks total reward employee engagement
model
business performance results
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Components of total reward
Compelling future Vision/values Growth/success Pos
itive brand
Positive workplace People focus Leadership Collegi
ality Trust/recognition Involvement/openness
Individual growth Development/training Career
enhancement
Total remuneration Base Variable Benefits
Adapted from Schuster and Zingheim, 2000
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Some tools

• Total reward
• Flexible benefits
• Profit sharing or similar
• Well designed incentives

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Expectancy theory and pay satisfaction
Source Ducharme, Singh and Podolsky, York
University, CBR, 2005
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Some tools

• Total reward
• Flexible benefits
• Profit sharing or similar
• Well designed incentives
• Non financial recognition

Demonstration of caring, concern and fairness
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For further information contact www.employment-st
udies.co.uk peter.reilly_at_employment-studies.co.uk
thank you
www.employment-studies.co.uk