Tuesday, 4 October 2011

Employees’ motivation, engagement and commitment, can benefits packages help?

Two similar investigations conducted by the CIPD (CIPD, 2011) over a period of six consecutive months into the reasons for individuals deciding to change their job have produced contrasting results. Whilst the previous quarter investigation had revealed that the main cause for individuals deciding to leave their employer was essentially related with the lack of intangible benefits provided by their job, and hence with job satisfaction, the following study showed that job satisfaction, as the main reason for employees making the decision to leave their employer, had been replaced with the need to receive a higher pay and more generous, valuable benefits (CIPD, 2011). This change in individual predilections apparently marked a shift from individual preference for intangible to tangible rewards.

Despite, as claimed by Hemsley (2011), the findings of these investigations suggest that individuals are ready to sacrifice job satisfaction for more generous pay and benefits, this does not necessarily entails that employers can successfully keep their staff “engaged with benefits.” As pointed out by the CIPD (2011), these results rather provide evidence that the key driver and motivator for individuals deciding to leave their current employer is to receive a more significant reward package, rather than to enhance their satisfaction at work, which has at worst nothing and at best little to do with motivation in general.


The findings of the CIPD investigation are indeed coherent and consistent with the results produced by a similar survey conducted by the National Training Awards (2010). Something like 76 percent of the respondents to this survey actually admitted that when looking for a new job their major aim is that to receive a more valuable financial reward package. The investigation also revealed that just a relatively meagre 32 percent of the participants maintained to be motivated by money to perform well in their job. This study hence clearly stresses and effectively highlights the difference existing between the two separate aspects: motivation to change a job and motivation in the workplace.


In order to consistently and properly investigate the subject it is absolutely important to avert any possible type of mix-up. To this extent a clear definition of and distinction between the terms engagement, motivation and commitment can definitely reveal to be useful.


As suggested by Armstrong (2009), motivation can be defined as an objective-directed behaviour. A motive basically represents a reason, or rather, the reason for an individual doing something (formulation which at large essentially corresponds with the definition of “motive” provided by both the Oxford and Cambridge dictionaries).

Individuals can either motivate themselves autonomously, setting their objectives of their own accord and identifying the more suitable way to achieve them; or try and motivate other people setting objectives for others and encouraging these to reach their targets.


Either it is the case of self-motivation or of motivating other people, individuals tend to feel genuinely motivated only when what is required from them is likely to enable them to attain an objective and something they value, that is to say a reward at large (Armstrong, 2009). In order to fulfil their purpose, individuals will be invariably ready or motivated to exercise and engage in discretionary behaviour.
The term engagement, with specific reference to the business world and more in particular as regards employee engagement, has actually been defined in many ways over time. All of the formulations provided so far can be nevertheless grouped into two main types of definitions: one which associates engagement with the organization, the other which directly links engagement to the activities performed by an employee.
The former definition basically associates engagement with the individual sense of belonging. Amongst the advocates of this type of formulation can be mentioned the US Conference Board, which defines engagement as the “heightened connection” which individuals feel for their employer (US Conference Board, 2006) and the British Institute for Employment Studies’ (IES), which describes an engaged individual as someone who believes in and identifies with his/her organization (Robinson et al, 2004).
According to the majority of the definitions hitherto formulated, notwithstanding, the concept of employee engagement is much more concerned with the job and concepts like performance and discretionary behaviour, rather than with the organization. Individuals can be indeed engaged with their job, but not committed to their organization, whereas committed employees are not necessarily engaged (Armstrong, 2009). As claimed by Armstrong (2009), the employees’ sense of belonging and feeling of identification with their organization should be more aptly linked to the term commitment.
Murlis and Watson (2001) refer to engagement in the self-explanatory sense of “engaged performance”, where organizational success is achieved by means of employee enthusiasm, stimulation and positive behaviour. Towers Watson (2007) suggests that staff engagement emerges and depends on the extent individuals “put discretionary effort in their work, beyond the minimum to get the job done.”

It can be agreed with Armstrong that, albeit the concept of engagement is incline to be interpreted in several ways, more strictly associating it with the idea of organizational commitment may actually leave room for doubt about its real and widely recognized meaning. The idea nowadays most broadly associated with engagement is typically job-related. Engagement seen from the employer perspective should hence be considered as the bundle of activities and initiatives planned and implemented by this in order to:
- Encourage the individuals’ positive approach to their job;
- Induce employees’ discretionary behaviour and efforts;
- Prepare individuals to go the extra mile.
Since it is also widely recognised that individual behaviour is of paramount importance for an organization to achieve its intended objectives and ultimately attain competitive edge, the activities which employers co-ordinate to boost employee engagement should also strive, in alignment with the overall business strategy, to foster the behaviour they desire to be exhibited by individuals.
The idea of commitment, which should build up during the development of a HRM philosophy, is most appropriately associated with the meaning of organizational citizenship (Armstrong, 2009). Commitment is what essentially accounts for an individual be proud to work for a particular organization and develop in turn a strong sense of belonging. Porter et al (1974) suggest that commitment relates to the extent of an individual identification with, and involvement in, a particular business.
The notion of commitment outlined so far is generally referred to as “attitudinal commitment”, whereas the type of conduct mostly associated with staying with an organization and continue to contribute to the pursuance of its aim is more commonly referred to as “behavioural commitment” (Torrington et al, 2008).
The concept of commitment is indeed the object of diverging and contrasting opinions; especially as for what concerns the actual existence of a direct link between commitment and performance. Whilst a number of Authors do recognise the existence of this link (Walton, 1985; Iles, Mabey and Robertson, 1990; Guest, 1998; Marchington and Zagelmeyer, 2005) in fact others (Meyer and Allen, 1997) emphasize the lack of evidence in support of this alleged direct cause-effect relationship. Cooper and Hartley (1991) suggest that commitment, reducing flexibility and inhibiting creative problem solving, could indeed jeopardize organizational performance.
Can benefits and reward help?
Having investigated the meaning of engagement, commitment and motivation, it can be now tried the exercise aiming at exploring whether the benefits included by employers in their value proposition can actually help these to engage, motivate and commit to the business their employees.
Benefits, reward and motivation
The findings of the CIPD and National Training Award investigations mentioned above can actually help to answer the question. Both studies suggest that individuals place great emphasis on financial reward when looking for a new job so that in the event an individual should receive more than one job offer it is very likely that this will opt for the one associated with the most generous reward package. Financial reward would clearly be in this case the “motive” for an individual accepting a particular job offer or the motive for deciding amongst a number of offers which one to accept. But can actually benefits and reward be considered effective motivators in the workplace?
Taking heed of the definition of motivation it clearly emerges that individuals behave and act in a particular way to achieve a result, that is to say an objective. In this instance, discretionary behaviour is not a means in itself but a means to an end, namely a reward. Considered as such tangible rewards and benefits may be regarded as motivators, individuals are likely to make extra efforts and perform better in order to attain the intended result: a bonus, a valued benefit, a pay increase or a cash supplement at large. Financial rewards can thus be considered as effective motivators in the short-term, to wit: for the period of time necessary for an individual to achieve his/her immediate end. Nonetheless, it is unlikely that employers could effectually motivate employees in the mid and long run by just relying on the effects yielded by financial rewards. This being the case, in a bid to pursue their intended objective, these should constantly resort to the carrot and stick approach, which would not be a big issue on its own but for the fact that this method would very shortly reveal to be extremely expensive and, as such, unsustainable over time.
Financial rewards are hence ultimately likely to enable businesses to attain some positive results, but only in the short run. Perhaps, this method could be occasionally used, for instance, in those cases in which employers have to confer particularly sensitive and delicate assignments to their best employees. Some of them could feel motivated by the fact of having been deemed as the most suitable employees for the assignment and by the circumstance that the employer is confident that these will yield the expected results; this is indeed the case of intangible rewards. By contrast, some other individuals may feel mostly motivated by tangible rewards. Under these circumstances, a mix of the two approaches should indeed reveal to be the most effectual method to produce the best results.

As a general rule, completely underestimating the effect and significance of financial reward would represent a massive blunder; not only during periods characterised by predominantly grim financial and economic conditions. Financial reward never is completely irrelevant; as suggested by the Hertzberg’s two-factor theory (1957), it is not a motivator on its own, but an inadequate and insufficient financial reward package is extremely likely to produce demotivating effects.
Benefits, reward and engagement
Taking into consideration the concept of engagement as defined by the US Conference Board and the British IES, benefits or strategic benefits how referred to by Hemsley (2011), should be regarded as useful to retain employees and to keep these committed to an organization; safe in the knowledge that committed individuals are not necessarily engaged individuals. This approach, notwithstanding, can actually be considered debatable in that whether an individual has decided to leave his/her current employer and has actively started to seek another job, it is hardly believable that such a decision have been actually made by reason of the weakness of the benefits package offered by the current employer, unless the organization is offering overall financial reward packages completely unaligned with the local labour market. In general, such decisions are indeed based on well-different grounds. 

Considering the concept of engagement as directly linked to the job, rather than to the organization the most significant reward an individual can obtain from performing his/her day-to-day activities is clearly mainly related to the intangible aspect of reward, the type of reward which is essentially inwardly generated by an individual. Employees find their job and the activities they perform compelling, significant and fulfilling and this accounts for them feeling engaged. Discretionary behaviour does not represent a means to an end, that is to say a financial reward, but the end itself. The reward is represented by the satisfaction individuals obtain from the job these perform and the result these yield by their actions. More than a matter of reward it is hence a matter of self-fulfilment.


In order this to occur, nonetheless, managers have to play their role and do whatever they can to enable employees to find fulfilment in their job. Managers can exert engagement on their direct reports by means of job design, job enrichment, employee involvement and employee empowerment initiatives, delegating decision making and in general by means of all of the activities favouring individual personal and professional growth, to wit: offering these learning, training and development opportunities.

Whether to perform well individuals need a job giving them a feeling of usefulness, autonomy, involvement and growth it is unlikely that these may exhibit discretionary behaviour by virtue of a more considerable financial reward package; which after a while would be considered as normal and justified irrespective of their performance.
Benefits, reward and commitment
It could be contended that to some extent benefits and reward may help employers to retain employees. Taking as axiomatic that, when seeking for a new job, individuals only care about financial reward, it would really make no sense leaving the current employer for a new one offering a reward package similar to that which they already receive. Under similar circumstances individuals would possibly opt to better remain with the current employer. Yet, employees know how things go within their current organization (which could sometimes be just the reason why individuals decide to leave), but they surely know little or nothing about how things would go once having eventually joined a new organization; things may potentially go worse. As a general rule, unless the worth of the reward package offered by the new employer is remarkably more considerable than the current one, it is unlikely that an individual might decide to leave an organization for joining a different one exclusively on account of financial-reward-related reasons.


The benefits package offered by an employer may hence reveal to be useful to retain its employees, but it sorely depends on the different circumstances so that the effectiveness of benefits packages as a certain means to retain staff remains questionable. In contrast, as confirmed by the CIPD and the National Training Awards investigations, benefits packages can reveal to be useful for businesses which want to attract new talents from the exogenous environment. Claiming that reward packages may reveal to be useful to attract new staff, but can produce limited effects, if any, to retain existing staff may actually sound contradictory. The different role which benefits packages can play depends indeed on the overall reward package offered by an employer. Whether, for instance, an individual should receive in addition to pay only a daily luncheon voucher, the offer of a similar financial reward package enriched by a company car, a housing allowance and a complementary pension scheme could make a world of difference.

Since committed individuals are not necessarily either engaged or motivated individuals, employers aiming at enhancing employee commitment should pay extra care during the preparation of their budget as regards the sum these are eventually planning to allocate for the attainment of this particular aim. The investment may in fact produce in turn no financial return at all. Since individual commitment is associated with sense of belonging and organizational citizenship, and committed employees are usually proud to work for their organization, employers should try to achieve this objective focusing their efforts on the design and development of employer branding strategies, which will surely be also very effective to attract talented individuals from the exogenous environment. CSR activities, flexible working policies and similar initiatives can at large help employers to achieve the objective. Individuals would be certainly proud to work for an organization which pays attention to the environment, backs charities and endorses eco-friendly activities and initiatives.
One of the most, arguably the most, important element and characteristic at the basis of employee commitment is invariably represented by consistency and integrity. Individuals are very sensitive to any discrepancy eventually emerging between what employers communicate and foster on paper and what they actually do in practice. Employers have hence to invariably talk the talk and walk the walk.

Be proud to be part of an organization, rather than of another very much depends on these factors; believing that a person may feel gratified to work for a particular employer only for the financial reward packages this offers would represent a massive blunder.


The influence of the exogenous environment
The reason for jobseekers preference having shifted from “increase job satisfaction” to “increase salary/benefits” when looking for a new job, can very likely be explained by the deterioration of employee standard of living at large. The same study suggests that only 7 percent of the respondents reported that their standard of living has actually improved, whilst 56 percent said that it has remained the same and 36 percent reported a worsening situation (CIPD, 2011).


The grim financial exogenous context can clearly make a negative impact on the employees’ mood and sometimes, albeit inadvertently, these could bring with them to work their personal problems and feelings. This occurrence may clearly affect their level of performance; the employer’s support can hence definitely help. Since employees are prone to forget in the long-term what an employer has done for them and to keep, by contrast, long-term memory of any even tiny accident, such a help should absolutely be considered within the array of the initiatives producing short-term effects. Yet, during downturn and slowdown periods it is unlikely that employers may afford extra-budget expenses, but this clearly depends on the different circumstances.


Still considering the findings of the CIPD study, it must be pointed out that despite “increase salary/benefits” has been indicated, with 54 percent of preferences, as the main motivation for individuals wanting to change their job, “increase job satisfaction”, with 42 percent, “opportunities to learn new things”, with 30 percent and “opportunities for promotion”, with 24 percent, all added together definitely achieved a remarkable score in favour of the intangible and non-financial-related reasons for individuals making the decision to leave their employer (the respondents to the CIPD survey had the latitude to tick more than one option). The change at the top of the table hence does just represent the tip of the iceberg and does not really represent the overall result of the investigation, which still recognises a remarkable and prevailing importance to the intangible side of reward.


Motivated, engaged and committed employees would clearly perform much better than individuals who are just motivated or just engaged or just committed. The combination of the three states would actually yield an ideal synergic, multiplicative effect, typical of the bundle approach, which is indeed very tricky to produce in practice.

Benefits and salary, as part of a total reward model where the different components of financial and non financial reward play a coordinated role to implement an organization’s reward philosophy and strategy, can clearly reveal to be significant contributors to employee engagement, commitment and motivation. To motivate, engage and commit staff employers should develop a plan of action based on the simultaneous implementation of a series of harmonized initiatives basically aiming at offering employees: learning and development opportunities, an appropriate working environment, a fair and equitable pay scheme and a suitable benefits programme, in other words a consistent and well-developed and well-designed total reward scheme, never neglecting that execution invariably is of paramount importance.
Longo, R., (2011), Employees’ motivation, engagement and commitment, can benefits packages help?, HR Professionals, [online].

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