Insights
For the last dozen years, the Society for Human Resource Management (SHRM) has been surveying employees from organizations of all sizes to identify the top five factors which contribute most to their job satisfaction. In its 2014 Employee Job Satisfaction and Engagement Survey, 60 percent of respondents identified compensation as "very important" to their job satisfaction. Why is this surprising? The last time compensation topped the list was 2007. The following year, when financial crisis swept much of the country, job security beat out all other factors and has stayed strong as a priority.
Job security is still high as a source of job satisfaction, but now it has been replaced by compensation as number one on the "very important" factors list. Other highly ranked sources of job satisfaction -- in order-- include: opportunities to use skills and abilities, relationship with immediate supervisor, benefits/the overall package, organization's financial stability, and "the work itself."
At the bottom of the list of 25 job attributes were those ranked as among the top five priorities by no more than one-third of respondents. They included: career development opportunities, variety of work, commitment to corporate social responsibility, commitment to a diverse and inclusive workforce, paid general training and tuition reimbursement, networking and, bottom of the list, "organization's commitment to a 'green' workplace."
Keep in mind, results will vary from one organization to the next. For example, an environmentally friendly products manufacturer will probably have more employees with a "green" orientation than others. Also, however employees feel about workforce diversity, the lack of a diverse workforce in a multicultural labor market could suggest employment practices that are out of step with guidelines from the Equal Employment Opportunity Commission.
Looking more closely at the topic of compensation, survey respondents were asked to rank the importance of four elements of compensation. Here's the breakdown. The first percentage represents the proportion ranking it as "very important," and the second, merely "important:"
Being paid competitively with the local market: 56 percent / 38 percent
Base rate of pay: 53 percent / 42 percent
Opportunities for variable pay: 43 percent / 43 percent
Stock options: 17 percent / 35 percent
Beyond ensuring that your employees can provide for themselves and their families, the goal of a compensation program is not limited to job satisfaction per se. It's also engagement. Job satisfaction will get employees in the door on time. Engagement means really connecting with their jobs, their colleagues and striving to do their best in good times and bad.
On a 1-5 scale (with 5 indicating maximum engagement), the survey overall found employees at a 3.5, that is, "moderately engaged." However, a demographic breakdown of the statistics showed wide variations. The most common distinction was between higher-level managers, and employees in more basic jobs. High-level managers were more engaged.
An employee's self-perceived level of engagement would be indicated by agreement with the following statements, used in the SHRM survey:
SHRM also asked employees to consider what factors -- assuming the factors are positive -- help them to feel engaged in their work. Here's a sampling of their answers:
Increasing employee focus on compensation is to be expected as the economy continues its slow trek back from the 2008 financial crisis. That doesn't mean arbitrary pay raises -- assuming they are even affordable -- would automatically motivate your employees to higher levels of morale and productivity. While pay raises have become a higher priority for employees, compensation adjustments must be considered in the context of employee engagement. SHRM's "conditions for engagement" provide a good starting point to help you assess that critical element of successful human resource management.
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