Pay is NOT a driver for Employee Engagement

We are often asked whether or not to include questions in engagement surveys on pay and remuneration. Generally, we suggest just asking one question as a check on whether it is an issue or not for engagement at your company. If pay is engaging your employees it should show up as something that predicts engagement levels.

We've just finished analyzing all of our 2012-2013 fast growing technology (New Tech) company results (which you can download below) and the results largely replicated our previous findings. People are often quite negative about pay and benefits and feel that they would be paid more fairly or better somewhere else. Across all of the New Tech companies, many of which pay very well it would seem, only 5 out of 10 employees thought they were remunerated fairly. However, across all of these companies when we looked at which things had the most impact on how engaged people felt, pay was in the top 10 drivers of engagement in only 2-3% of all companies.

In the companies where pay showed up as a driver of engagement it seemed that pay really had got well below market rates with only about 1 in 4 employees feeling their pay was fair. This points to a threshold effect where it may be necessary to have competitive pay levels but, even in Silicon Valley, once you achieve that level you will achieve diminishing engagement returns for your extra payroll dollar.

About Culture Amp

Culture Amp helps you make your company a better place to work. By making it easy to collect, understand and act on employee feedback, we enable HR leaders to make better decisions, demonstrate impact, and turn company culture into a competitive edge.

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