When It Comes to Job Satisfaction, Cash Is No Longer King

Recently a client asked me the key ingredients behind my success in helping people change employers. I guess that’s a logical question for a headhunter… After all, for nearly 40 years I’ve been talking to people about what it might take to get them to consider a new role. To answer that question, it would have been so easy to just say “Money, money, money.” But that’s the wrong answer!

When I ask someone to describe what they like about their employer, I almost never hear a reference to salary. No one says, “Hey, I love working here because they pay me through the roof.”

That just doesn’t come up. Let's face it… while salary is indeed important in the decision that one makes about a new job, it is not the reason that people stay or leave. If someone is not happy, a better salary might be a part of what takes them away, but it’s not the lead issue. Think about this yourself. Does an extra few thousand a year really take the sting out of a bad boss or a boring job?

I’ve worked under bad management. And I’ve had the job that seemed to go on forever with endless repetition and the sounds of the clock being punched as employees march in and out of the office. I was not content to stay in those kind of roles, and I don’t think you can count on your team to stay with you if they are experiencing the same frustrations. A bump in their pay won’t “fix” it. And, if you are wondering about the real reasons why your people may consider leaving, you won’t find those answers with a typical HR exit interview. Few ex-employees want to burn a bridge and a possible future reference just to issue a gripe as they walk out.

The Elements of Job Satisfaction

I believe my client asked me this question because her turnover rate had increased a few percentage points from the previous years. To an HR executive, that’s a big deal. As I told her, this may have something to do with the workforce, because every new generation of workers has less concern about “stability issues” on their resume. But it could also be tied to the type of incentive programs the company offers to keep people enthused and on board (mentally and physically). If your company reward programs force a key employee to wait for recognition until the company Christmas party, you’re in trouble. Simply offering a “fair salary” and a holiday bonus could mean that your supervisors lack a critical tool they need to entice their best performers to stay on the job.

As I noted, it isn’t cash that is king here. The major motivators have always been achievement, recognition, the challenge of the work itself, responsibility, advancement and personal growth. You can’t put those things into a weekly paycheck. So, in answer to my client that afternoon, I asked her how she felt about her company’s reward systems and whether her frontline managers have the power to provide recognition for achievements. Or, as in many organizations, is it only the bad actors who get noticed?

People Want Recognition

If all your reward levers are things like profit sharing, stock options and paychecks, your supervisor will have little to run with as those decisions are made in the executive suites. But if you can find a way to pull it off, empowering your manager/supervisor to provide his or her own rewards will allow that leader to take control by motivating the team through job satisfaction.

I read recently in an HR-oriented trade magazine that a large survey was conducted which asked employees which they would prefer…a cash bonus that stayed completely confidential, or a smaller bonus that involved public recognition. The latter won out, by a great margin. People want to be recognized. And by recognizing the right behaviors, your supervisor reinforces the work being done by those you’d like others to emulate.

I gave my client a couple of examples from other companies that I’ve worked with over the years. One client set up a travel budget, modest, but enough to allow for top-rated employees to visit company facilities in other countries and/or to attend important trade shows or technical meetings that they wouldn’t normally get a chance to attend at their level. And when those rewards are offered, the recognition and the quality work which prompted it doesn’t wait to be announced until the end of year.

At another client, the supervisor has an available company checkbook which is used on a discretionary basis for instant rewards when the right behavior is spotted. These instant rewards aren’t large checks, but they are quite visible and the resulting recognition reinforces that behavior across the team. Yes, it’s cash, but the value of the reward is doubled, tripled perhaps, because of the recognition factor.

Standard Compensation

Are there truly large differences in compensation between companies, where one firm can easily pull from the ranks of others just because their pay scale is so much different? In my opinion, that’s not the case. My HR friend reinforced that opinion with me. She said her company always remains competitive in compensation because management has enough information about industry standards. As a result, there aren’t huge compensation swings between companies for the same job. Companies pay many thousands of dollars for confidential salary reports to ensure they are competitive.

And yet, some companies seem to have all the luck when setting out to attract top performers. When I am trying to convince a solid performer to consider a change of venue, I ask them about whether they are recognized and appreciated for their contributions. In some of today’s “flatter” organizations it is more difficult to get that regular promotion. As a result, incentive programs that come from manager/supervisors end up being very important in retention of top talent. In fact, most top performers feel a sense of loyalty today to their team and their supervisor as opposed to the company itself.

A Compensation Filter

In conclusion, when designing a simple, new incentive, run them through these filters to ensure you’ve made them as powerful as possible:

• Availability: Do you have enough of the award to have the desired effect?
• Performance Contingent: To what extent are your rewards tied to the performance of the individual or team? You magnify the result when you tie the bonus as directly as possible to some desired behavior.
• Timeliness: Will the recipient recognize the tie between the reward and the behavior? Don’t allow the positive behavior to be separated by weeks or months before recognition.
• Durability: Some bonus programs have survived the years to the point where they have absolutely no motivation inherent in them. They have become entitlements. Ensure these job satisfaction rewards remain fresh.
• Reversibility: Ask yourself “what would happen if we took this away?” Sometimes rewards must be taken away in order to be appreciated.
• Visibility: In what manner is the reward best given? If you give away a larger cash bonus, that might best be suited for a private meeting or a luncheon with the company president. But smaller “satisfaction” rewards are best suited for a team meeting where they are visible.
• Shared Values: Ensure that your reward programs reinforce the shared values of your organization. If you manage a group of scientists who are praised and rewarded for any risk-taking, creative act that results in progress, then you’ll need an incentive occasionally delivered to a team that tried but failed.

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David G. Jensen
Founder and Managing Director of CTI Executive Search
davejensen70@gmail.com
928-274-2266
www.careertrax.com
 
David Jensen is the founder and managing director of CTI Executive Search, a unit of CareerTrax Inc, a leading search firm working in the life sciences. Previously, he had been a managing director at Kincannon & Reed, a 30-year retained executive search firm where his company, CareerTrax, had been a contractor. In 1985, Jensen founded and was CEO at Search Masters International (SMI), a top executive search practice working with biotechnology companies, which was sold in 2001 to a $4.4B human resources service firm. Prior to 1985, Jensen had established a life sciences practice for Govig and Associates (Phoenix, AZ).

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