Employee Motivation Management – Part I: The Turnover Phenomenon of Pay

By Hesston L Johnson

In the 16 years of management experience I have obtained, I continually have heard that employee turnover is due to pay and benefits. Turnover essentially becomes an accepted industry phenomenon where efforts to improve employee retention become stagnant. After all, if the only turnover cause you perceive to have is ‘pay’ while financial and budgetary constraints mandate pay is unable to be changed, why should one even try to address a problem to which you have no control?

Some of you reading this know that pay has been discovered and identified as a minimal cause of turnover (typically <10%). Instead, leading observational research has identified development, leadership and management individuals as the leading causing of turnover.

It is from this point that I seek to encourage you to take a second look at the turnover you experience in your workplace and teams. In doing so, I’ll be covering motivation factors, costs of turnover, external position compression and the reality of current research associated with turnover causes.

Motivation factors

First, it is most important to first understand the motivation factors among employees and how those factors interact. Outlined below are motivation (intrinsic) factors and hygiene (extrinsic factors). It is important to note that ‘pay’ is an extrinsic factor. Extrinsic factors are those where the absence of extrinsic factors contributes to dissatisfaction, though the presences of such factors do not necessarily result in increased job satisfaction. One could thus argue, if satisfactory pay is not in place, the absence will ‘contribute to dissatisfaction’.

Next, what is associated with ‘pay’ among your team? This is the key to developing equilibrium within your workforce. If the workforce is largely extrinsically motivated, they are likely also motivated by status, job security, peer relationships and supervisor relationships. By improving the presence of extrinsic motivation factors, a balance among extrinsically motivated employees begins to take shape. Subtle alterations to the presence of relationships, evaluating job status equality/inequality and communications of job security can improve the ‘presence’ of factors that do not necessarily lead to satisfaction, but reduce dissatisfaction through factoral presence.

Now, what about a blended motivation? Or what about a workforce that is intrinsically motivated though pay is actually a key motivation factor? Again, it is important to understand the dynamics of your workforce. However, if a team is intrinsically motivated and de-motivated by pay, exploration of extrinsic off-setting factors (status, relationships, etc.) to improve presence may place a balance in the motivational dynamics. Further, intrinsic factors are those that, when present, have a positive satisfaction influence among employees. If a leader can increase the presence and quality of intrinsic factors, a counterbalance against extrinsic factors naturally begins to take shape. Remember, ‘pay’ is one of an endless list of turnover causes and a bottom factor among the top 10 most recognized factors.

All of this being said – the approach of motivation is based in two approaches: (1) what motivates your team, and (2) what factoral presence does the environment possess? Every workforce, micro-culture and demographic drives variation.

In the next article I will explore the costs and compression associated with turnover related to pay motivation factors.

Motivation and Intrinsic Motivation Factors

– Achievement

– Task completion, early completion

– Recognition

– Benefits of performance, monetary or non-monetary

– The Work Itself

– Essence of work performed contributing, and contributable to contentment

– Responsibility

– Autonomy to perform a task, individual terms in making a decision as to how work is carried out

– Advancement

– Increased responsibility, status and financial benefits

– Growth

– Opportunity to learn new skills

Hygiene and Extrinsic Motivation Factors

– Company Policies

– Transparency of policies easy to understand and follow

– Supervision

– Supervisor style and approach (i.e., participative, democratic, etc.)

– Relationship with Supervisor

– Superior influence, trust and consistency

– Relationship with Peers

– Peer influence and connection

– Working Conditions

– Working environment, surroundings, quality of equipment, working hours and physical environment (health and comfort)

– Salary

– Earnings and the influence of monetary form against one’s effort

– Status

– Respect socially driven by career, role and/or position

– Security

– The degree to which the organization is able to offer consistent careers for employees