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13 Jan 2022
by David Danzig

How to create a good place to work – without pay increases

It’s all too easy to see pay rises as a way to increase employee engagement and motivation, creating a more appealing workplace culture. However, a pay increase is transient and unlikely to provide long-term benefits. So what can HR and reward professionals do to create a vibrant and high-performing corporate culture?





A pay increase isn’t the answer

The pay rise is often seen as the solution to most employee issues: if the employee lacks motivation, pay them more; if an employee needs to step-up to a new challenge, pay them more; if you want the employee to perform great work, pay them more.

Pay rises are tangible rewards and, as they require little effort, they’re a popular catch-all solution.

However, research shows that pay rises do not equate to an engaged and thriving culture that delivers great work. In fact, research by the Cicero Group, commissioned by the OC Tanner Institute, found that only 7% of employees said a pay increase would be highly effective at getting them to produce “great work”.

Creating great employee experiences with recognition

So if pay isn’t the answer, what is? A strong, vibrant culture is only possible when people enjoy positive employee experiences underpinned by feelings of connection and appreciation. If employees feel isolated or that they don’t fit in, or that their contribution isn’t valued, then they will mostly have negative ‘valley’ experiences. On the other hand, if they frequently feel a sense of belonging and usefulness, they will mostly enjoy positive ‘peak’ experiences and the workplace culture will more likely thrive.

To ensure employees have more ‘peak’ than ‘valley’ experiences, staff recognition must become a priority. There’s a strong correlation between employee recognition and healthy workplace cultures, with sincere, personalised recognition directly impacting employees’ feelings of self-worth and the strength of connection between employees. This in turn leads to stronger cultures and better performing businesses. In fact, by frequently recognising individuals’ contributions, efforts and achievements in a personal manner, it can be transformative to workplace culture. 

Recognition builds trust, camaraderie and the perception that an employee’s contribution counts, with nearly 90% of employees having high trust in a leader who recognises their accomplishments, compared with 48 per cent who feel the same level of trust without recognition. Plus, the probability of great work is 18 times’ more likely when a person is recognised (see O.C. Tanner’s 2022 Global Culture Report).

However, to be truly effective, recognition needs to be tailored to the individual, meaningful and given in a timely fashion. Plus any recognition programme has to be integrated into everyday culture so that giving and receiving recognition becomes second nature. If it’s regarded as an afterthought or insincere, the recognition will do more harm than good!

The key to a great place to work

Creating a great place to work doesn’t happen overnight and several areas must be addressed. However, one of the easiest things to do (which also delivers the most profound results) is to introduce a company-wide recognition programme. Integrated, personalised recognition is a potent means to help employees feel connected to the organisation, each other and their accomplishments, thereby moulding a magnetic and high-performing workplace culture.

The author is David Danzig, director at O.C. Tanner Europe

This article was provided by O.C. Tanner Europe

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