Compensation Reigns as the King of Job Satisfaction
According to a new SHRM research report, Job Satisfaction and Engagement: The Road to Economic Recovery, employees are citing pay as the top contributor to their overall job satisfaction.
The report flies in the face of a body of research that claims compensation isn’t a significant contributor to job satisfaction. SHRM says that 60 percent of surveyed employees rated compensation/pay as “very important,” while another 36 percent rated it “important.”
Just two years ago, compensation was ranked third among contributors to job satisfaction, eclipsed by job security and opportunities to use skills/abilities.
What’s behind the change? A SHRM representative chalked it up to the recession and the slow growth of incomes over the past several years.
Whatever the reason and whatever its rank, compensation is certainly an essential component of job satisfaction. When employees understand how their achievements are valued and rewarded, their motivation and engagement levels improve. This means it behooves us to continually reinforce their understanding and knowledge of our compensation programs. In fact, we should do more than simply educate employees about our compensation programs: we should take steps to make them active participants in these programs.
For example, employees should be responsible for entering and updating their personal information in our HR systems. Naturally, this would require a bit of training and a system that’s extremely user-friendly—but it’s a small price to pay for raising employee satisfaction, motivation and engagement levels.
The right HR information system/software also offers an array of benefits to our organizations:
· They streamline the administrative tasks related to compensation management.
· They improve legal compliance and minimize the risk of errors.
· They diminish manager bias and improve fairness.
· They help us collect and maintain more accurate people data, which leads to better decision making.
· And they enhance our ability to share this data easily with functional heads and senior leaders.
Given the findings of the SHRM report, it’s probably a good time to revisit our compensation programs, practices and systems. It could pay big dividends.