Articles

Reward – It’s Not About The Money!

July 26, 2021 - By Wendy Lambourne, Director, MA Industrial and Organisation Psychology, Registered Psychologist with SA Medical & Dental Council

At Legitimate Leadership we believe that leaders who are in the relationship with their people to “give” to them rather than to “get” results out of them have seven possible “gives” at any point in time. These seven are: Care, Means, Ability, Censure, Discipline, Praise and Reward.

When leaders are getting the Reward “give” right, their direct reports would “strongly agree” or “agree” to the following two statements (when responding in a Legitimate Leadership leadership survey):

  1. My current level of remuneration positively acknowledges my contribution.
  2. Those (in the team) who contribute the most are most highly rewarded.

Leadership Leadership has agonised on how to word the first statement simply because we have found in practice that people are very reluctant to agree that they are happy with what they are being paid.

One respondent who did “strongly agree” with the first statement nevertheless felt obliged to add a qualifying comment that “I am not currently unhappy with my pay”. The implication, I think, was that he could find himself back in the unhappy box very soon!

At the start of one Legitimate Leadership intervention the average score for the leaders being surveyed on the first statement on a scale of +10 (all respondents strongly agree) to -10 (all respondents strongly disagree) was not at all poor at 2.9 – though it indicated scope for improvement. Six months later, in a repeat leadership survey, the score on this item had risen to 4.3. Given that any change in score of 0.5 or more in a repeat leadership survey is noteworthy, this positive gain of 1.4 was significant.

But this was when things got interesting. I asked the executive team what positive changes had been made to employee remuneration. They said nothing had changed.

So, what accounted for the significant improvement in sentiment about pay? The answer, I think, lay in the gains in the other six possible leadership “gives”. While scores on Censure (4.1 – 4.0), Discipline (6.9 – 7.1) and Praise (7.0 – 7.3) remained little changed, scores on Care (6.7 – 7.1), Means (4.0 – 5.4) and Ability (2.7 – 3.7) had all improved significantly.

What can we conclude from this?

  1. Employees’ perceptions of the company’s reward system are only in a small degree a function of how good or bad the reward system is. When people are aggrieved by their pay this is really about them perceiving that their leaders are failing in their duty of care and growth. Their perceptions on reward are a barometer of the degree to which they trust the management of the enterprise. When the reward system is viewed positively it is because management is seen to be in the relationship to “give” to the people, to have their best interests at heart – and hence they can be trusted.
  2. Often management tries to “fix” the people problem by changing the reward system. They miss the point. You can pay people as much as you like, but until such time as management delivers on care and growth their people will never be willing. Reward is in any case only one of seven possible “gives”. The way to win the hearts and minds of people is not through paying them more. It is through demonstrating genuine concern for their welfare (Care), providing them with an enabling environment in which to contribute (Means), helping them to realise the best in themselves from an (Ability) point of view, and holding them fairly (Accountable) against a standard for their intent.
Wendy Lambourne
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