Compensation is Not the Main Driver of Loyalty

My recent post What Exit Interviews Say About Why Employees Leave highlights a PricewaterhouseCoopers study about why employees leave their companies.  Compensation was less important to employees than employers thought. In fact, a Gallup poll shows that “Pay/Benefits” is only about a fifth of the reason that employees leave a company.

Other issues that drive people away are: growth, meaningful work, supervisor skills, workload balance, fairness, and recognition. Significantly,  5 of the 10 reasons are directly related to supervisor skills, including recognition for contributions.

Recognition Is Key

Another survey by Globoforce – the Spring 2012 Mood Tracker Survey shows the importance of workplace recognition:

  • 55% percent of U.S. workers would leave their jobs for employers that practice employee recognition programs.
  • 81% say being recognized increased their satisfaction, up from 73% in the fall of 2011.
  • 51% who have not been recognized in the last 3 months intend to look for new jobs vs.  23% who have been recognized.

More employers are now using recognition programs:

  • 50% report being recognized in the last 3 months, up from 44% in the fall of 2011.
  • 54% say they are happy with their levels of recognition, up from 48% last fall.

Recognition = Job and Supervisor Satisfaction

  • 83% who have been recently recognized are satisfied with their levels of recognition, with 90% saying their managers effectively recognize their efforts.
  • Only 17% who have not been recognized are satisfied with their recognition levels, and only 21% feel their managers effectively acknowledge their efforts.
  • 76% who have been recognized love their jobs vs. only 37% of those never recognized.

Eric Mosley, CEO of Globoforce summarizes the results:

As this survey shows, many fail to connect the one thing that all employees seek: frequent peer-to-peer recognition tied to performance. Taking the bottom-up approach to recognition is changing the way employees are managed. Not only will business leaders know who the flight risks are, they will be able to prevent many from ever becoming flight risks.

The PricewaterhouseCoopers study shows that factors related to dissatisfaction with one’s boss were huge motivators of employee turnover, and recognition is one of those factors.

The Globoforce spring 2012 results now confirm that recognition is in fact a major component of supervisor satisfaction: 83% who have been recently recognized are satisfied with their levels of recognition, with 90% crediting their superiors for recognizing them.

What Can You Do?

Ongoing appraisal

Since feeling isolated invites disengagement, it is key to provide them adequate information, training, support and encouragement. Knowing how well they are doing in a new job is important to them, and it is not good to wait for an annual performance review to give an employee feedback. The coaching and e appraisal process needs to be ongoing during the first few months and for years into their career.

What about the disenchanted employee who has been with the company for many, somewhat unproductive, years? Finding out why the employee feels disengaged is the first question — the answer may well give clues to issues within the organization that should be addressed.

Here are some time-honored tips that really can make a difference:

  1. Management engagement: Invest in the necessary training (and surveys) to ensure that all levels of management, from the tip-top to line supervisors, are fully engaged. This will then cascade down throughout the organization.
  2. Increase communications: Be as open as possible and don’t be afraid to share bad as well as good news. Bes sure that your employees know to come to you if there is a problem so it can be resolved right away rather than linger and grow.
  3. Incentivize performance: Part of leadership is to recognize when someone in the company is working hard and productive. People like to be honored in different ways – some may like public recognition – some do not.  Find out how “they” would like to reward for their positive contribution.
  4. Feedback: Allow people to be part of the future of the organization. Ask people “What do you think?”  You may be pleasantly surprised by some of the input you receive.
  5. Flexibility: No two people are the same or work in exactly the same way. Morale can suffer if employees are required to follow a specific way of working which may not be optimum for them. Determine what programs you can adapt that will help employees get their job done in new and proven ways.


Snap! principle of employer loyalty:

Engagement and recognition enhance job and supervisor satisfaction and loyalty.