SOUTHERN CALIFORNIA JOB MARKET : Money Won’t Buy Love and at Work Won’t Buy Happiness : Morale: Other factors are more important to many workers.
A paycheck is all you need, right? Collect it every two weeks and you’re happy as a clam.
Wrong. Contrary to popular belief, money is rarely the key to happiness at work.
“Management generally believes that pay is critical in worker happiness,” says Hilary Kraft, a consultant with compensation advisers William M. Mercer Inc. in Los Angeles. “But often when we do employee surveys we find that other things are more important to the employees themselves.”
According to a study by the American Productivity and Quality Center, “challenging work” was ranked the most important job motivating factor in a survey of 383 senior and middle managers. Feeling opinions count in decision-making and recognition for a job well done came in second and third. Pay ranked fourth, right ahead of “working for a company I can be proud of.”
That’s convenient for companies that want to pay less, especially those pressed by hard times and competition.
Earlier this year, Mercer surveyed 256 American companies and found that only 28% would increase payroll spending this year over last, but fully 40% were projecting lower payroll expenses. And 60% of the companies that reported wage increases were limiting them to 4%.
Critics say that can lead to dispirited employees and an unstable work force. “All other things being equal, people leave jobs for more pay,” says Christina G. Banks, a business professor at UC Berkeley. “Loyalty is less compelling these days than it has been in the past and turnover rates are rising . . . in a recession, people often chose jobs because of the salary offered compared to other factors.”
Nevertheless, companies are turning to non-monetary forms of compensation to reward workers. Employees, say compensation experts, are sometimes willing to trade fatter paychecks for everything from additional time off to a bigger say in how the company runs. Frequently, a raise may not motivate an employee as much as recognition from management and peers.
Recognition is important to Dan McNamee, a 30-year-old manager in the affiliate-relations department of NBC. He concocted on his own several ideas for new TV shows, some of which are now under consideration by the network’s programming division. McNamee pitched his proposal during a monthly employee lunch with NBC Network President Pier Mapes. But to get invited, an employee must have a solid idea for enhancing some aspect of NBC operations.
“I found that recognition is equally as powerful a motivator, and in many instances even more powerful, than compensation or career advancement for motivating people,” explains Mapes. “In tough times likes these, it’s all the more critical that we use every means possible to generate new ideas.”
In the 1990s, when recession-weary companies are contracting and keeping a lid on payrolls because of competitive pressures, the annual New Year’s raise and bonus is becoming as scarce as all-white dress shirts and time-cards. But many experts say simply boosting base pay is no longer equated with keeping employees happy. Non-monetary rewards and reinforcements are now seen as essential.
“The thing that has evolved very strongly over the last five years in non-managerial jobs is the ability for people to control their work environment,” says Richard Semler, senior consultant with the Los Angeles office of Sibson & Co., a consulting firm. “A lot of that has to do with empowering people to make management decisions for themselves.”
Ursula Doidic, a pediatric nurse at Kaiser Permanente West in Los Angeles, is an example. She puts in 16 extra hours a month as chairman of the hospital’s nursing council, earning less money in that role than if she worked overtime as a bedside nurse.
For Doidic, earning more money is not a big priority right now. The nursing council is part of the hospital’s shared-governance program, which allows nurses to help run the hospital along with the executive staff. It has taken responsibility for everything from setting up a special unit for chemotherapy patients to modernizing the dress code.
“I like working with patients and am not a paper shuffler,” says the Austrian-born Doidic. “But this gives me special satisfaction and involvement you don’t have if you just do bedside care.”
Doidic is one of a growing number of workers who are seeking more control over their jobs even if it doesn’t necessarily mean higher compensation.
Melody Shapiro, manager of regional registered-nurse recruitment and retention for Kaiser-Permanente, says that such a program helps keep nurses motivated and morale high.
With payrolls growing at slower rates, benefits are becoming more important--especially as baby boomers reach their prime child-rearing years.
A recent survey conducted by the Gallup Organization for the Employee Benefit Research Institute found that 70% of Americans consider such benefits as health insurance, pensions, vacation, child care, life insurance and sick leave “very important” when deciding to accept or reject a job. The same survey last year found that 57% ranked such benefits as “very important.”
Because of the double-whammy created by global competition and the recession, companies are looking to hold down base pay costs. So they are turning instead to alternative compensation plans that tie pay raises to the performance of the company. Such plans are also called “goal-sharing” or “gain-sharing” pay-based programs.
“The major difference between gain-sharing and the traditional bonus is that the bonus typically tends to be very discretionary--the mood the boss or the company is in that day. With incentive-based pay, the employee’s compensation is tied to some measurable improvement,” explains Mark J. Wallace, a professor at the University of Kentucky who has studied alternative pay strategies.
According to a recent survey by Hewitt Associates, a Lincolnshire, Ill.-based consulting firm, 47% of the 690 employers surveyed are now offering some kind of goal-sharing or gain-sharing reward program for employees.
