Money isn't necessarily the most important thing to consider when finding ways to equitably reward employees for their hard work. Offering room for advancement at your company is more important than hefty salary increases or annual bonuses, according to a new study.
The report released today by WorldatWork, Hay Group and Loyola University Chicago professor Dow Scott asked employee reward professionals what the top five concerns in reward fairness are. They said:
1. Career development opportunities
2. Merit increases
3. Base pay amounts
4. Non-financial recognition
5. Employee development/training
"Reward professionals view career development opportunities as the top reward fairness concern because growth opportunities are in high demand by employees, while at the same time, career development processes are not particularly developed in many organizations," said Tom McMullen, Hay Group’s North American Reward Practice Leader. "Career development concerns are also the No. 1 retention issue for employees, according to our employee opinion database."
The research also identified the top three criteria that impact reward fairness. These are individual performance, work responsibilities and overall organization performance.
When asked what works particularly well in improving employees' perceptions of reward fairness in organizations, respondents overwhelmingly identified effective reward communications, followed by external benchmarking, reward strategy and design, and nonfinancial recognition programs.
"Communication is king in improving perceptions of reward fairness," said WorldatWork’s Kerry Chou. "The best organizations focus not only on the core messages to be communicated, but also the most effective messengers and channels. In addition, these organizations devote significant energy to determining how to sustain core messages and equip managers to effectively communicate them."
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