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the institute for employment studies
Motivation and Reward:presentation 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
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What does motivation deliver?
Higher productivity
Improved customer service
Inputs
Outputs
Lower staff turnover
Better attendance
Improved safety
Beneficial engaged behaviours taking initiative
wanting to develop
organisationally aligned
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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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LineManagement
CompanyCulture
EmployeeCommitment
Customerspending
intention
Changein sales
Customersatisfaction
with service
Employee
Absence
IES service-profit-chain model
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Service satisfaction chain in government
Confidence in
government
CanadianGovernment
Services
perceived to
be beneficial
Service
quality
Services
perceived to
meet needs
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Employee input to service
CanadianGovernment
Employee
satisfaction/
commitment
Work environment
Fair pay
Perception of managementCareer development
Client
service
satisfaction
Timelinesscompetenc
eCourtesyFairness
Outcome
Citizen trust/confidence ingovernment
Social/cultural factors
Government
performanceService satisfaction
Service benefit
Service adequacy
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the institute for employment studies
Link betweenMotivation 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 performersYork 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 engagement
in the NHS
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The negative side of poor reward
CIPD top 3 factors leading to work disengagement:1. the way the organisation is managed
2. chances for promotion
3. 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 betterrewarded than others - depending on the social
setting (Adams)
Satisfaction
Organisational commitment was more stronglyrelated 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 withorganisational effectiveness and pay
satisfaction (LeBlanc Group)
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WorldAtWork knowledge of pay model
Pay
amount
Pay
process
Payknowledge
Paysatisfaction
Workengagement
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To sum up
In some circumstances financial rewardscan 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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the institute for employment studies
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 catknows nothing of what
interests you
Graham White HR Director
Westminster City Council
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Measure motivation, etc
Gallup Q12
Towers Perrin
Saratoga
Hewitts Valuentis
Hay
ISR
YouGov etc., etc.
Own company approach
The engagement indexSurveys, surveys, surveys
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Understand differences
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
Motivation varies by
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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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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 andimplemented as an integrated and
coherent whole.
Michael Armstrongs definition
of total reward
W ld tW k t t l d &
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attractmotivate
retain
employee
satisfaction&
engagement
business
performance&
results
organisationalculture
businessstrategy
HR strategy
compensation
benefits
work/lifeperformance& recognition
development& career
opportunities
Totalrewardsstrategy
WorldatWorks total reward &
employee engagement model
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Components of total reward
Adaptedfrom Schuster and Zingheim, 2000
Compelling future
Vision/values
Growth/success
Positive brand
Individual growth
Development/training
Career enhancement
Positive workplacePeople focusLeadershipCollegiality
Trust/recognitionInvolvement/openness
Total remunerationBase
Variable
Benefits
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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
Expectancy
Reward
ValenceInstrumentality
Performanceevaluation
Goalsetting
Paysatisfaction
Motivation
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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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thank you
www employment-studies co uk
For further information contact:www.employment-studies.co.ukpeter.reilly@employment-studies.co.uk