Compensation Doesn’t Drive Employee Engagement

As part of our recent consumer benchmark, we examined a number of attitudes and behaviors of more than 5,000 U.S. employees. One of the things we analyzed is what makes people want to do something good for their company even if it’s not expected of them.

To understand this dynamic, we looked at seven attitudes employees have towards their employers. It turns out that compensation is not the strongest driver of this behavior and it may even be one of the weakest. Instead of trying to gain employees’ engagement solely with pay increases, leaders should look at sharing the gift of intrinsic rewards. As you can see in the figure below:

  • Employees who periodically receive unexpected rewards are the most likely to do something good and unexpected for their employer.
  • Employees who don’t think they are contributing to the success of the company are the least likely to do something good and unexpected for their employer. Employees who feel like they are contributing are 39 points more likely to do something good (the largest gap).
  • Employees who believe that they are compensated fairly are only eight points more likely to do something good than those who do not (the smallest gap).

DoSomethingGoodThe bottom line: Don’t rely on compensation to motivate employees

About Bruce Temkin, CCXP
I'm an experience (XM) management catalyst; helping organizations improve results by engaging the hearts and minds of their employees, customers, and partners. I enjoy researching and speaking about these topics. I lead the Qualtrics XM Institute, which is the world's best job. We're igniting a global community of XM Professionals who are inspired and empowered to radically improve the human experience. To achieve this goal, my team focuses on thought leadership, training, and community building. My work is driven by a set of fundamental beliefs: 1) Everything starts and ends with human beings, so you need to understand how people think, feel, and behave; 2) XM is a discipline that needs to be woven throughout an organization's entire operating fabric; and 3) Building the XM discipline requires a combination of culture, competency, and technology.

2 Responses to Compensation Doesn’t Drive Employee Engagement

  1. Hi Bruce – Very interesting research!! Thank you for sharing this with us. Will you review the graphic with the results and let me know if the subtitle should say “Employees who are likely…” and not “Consumers who are likely…”. To me, it makes more sense if it’s Employees so I’m just asking for clarification. Thank you!

    • Bruce Temkin says:

      Hi Jodie: The graphic is about employees. The subtitle accurately describes the data as being about consumers, because the base is made up of “consumers who are employed.” Having said that, it would have been cleaner to say “employees” in the subtitle. Thanks for the feedback!

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