Don’t Salaries Matter?

(Photo by iStock/mlharing)

Every year, when Leading Edge releases our annual Employee Experience Survey, we tend to emphasize findings from the survey that most strongly contribute to employee engagement. “Employee engagement” is about feeling proud of the organization, feeling motivated to do great work, wanting to stay with the organization, and being likely to recommend the organization to others. Employee engagement isn’t the only thing that matters for organizational effectiveness, but we focus on it because research has shown how directly correlated it is to productivity, profitability, employee turnover, workplace accidents, absenteeism, product quality, and more. And our data points to certain organizational factors that strongly correlate with employee engagement, what we call “engagement drivers.” This year, like last year, those drivers were:

1. Feeling like the organization demonstrates care and concern for employees
2. Having confidence in the organization’s leadership
3. Believing employee well-being is a priority at the organization
4. Feeling that there is open and honest two-way communication at the organization
5. Feeling like you belong at the organization

These elements of the workplace experience—more than any others we study—drive how engaged employees are in the Jewish nonprofit sector. We don’t believe that our field is unique in this; these things are important for workers in every sector.

But What About Salaries?!

We can’t count how often people have asked us this question. Don’t people care about salaries? They ask because the nonprofit sector has an unfortunate—and unfortunately accurate—reputation for offering lower salaries than other fields. And salary is intuitively and materially important to people. It affects where we can live, what we can own, how we can educate our children, what we can consume, how much we can give and share with others, and much more. For those in the nonprofit sector, it is also often the clearest way we can understand and measure our value to the organization. Our own survey data shows that salary is, in fact, correlated with employee engagement. So people ask us why we don’t emphasize it more prominently. Don’t salaries matter?

Our answer is: Yes! They are not an “engagement driver,” per se, because other organizational factors do a lot more than salary does to drive employee engagement. Salaries matter, but they are not the most important thing that does.

To understand why, let’s talk about weasels.

Introducing: Weasels

Imagine a workplace where everyone comes into the office. (This story is set in 2019.) It's a totally normal office, except that for some mysterious reason, the company has always kept a group of weasels as office pets. The weasels have a special area in the back with their food and nesting materials and they are also free to wander about the office.

It isn't cute. The weasels bite. Unprovoked. Every day! They approach silently and employees have no warning. You're at your desk, lost in your inbox, when suddenly there's a piercing pain in your ankle and one of the weasels is running away before you knew it was there.

Everyone complains about the weasels. Even the senior team acknowledges that ideally the weasels wouldn't be there. But they've always been there, and no one has time to think of a good plan to get rid of them. Some employees can't take it, and they leave. Turnover is high.

One day, at long last, the senior team locates a shelter for weasels and moves them all out. For the first time, the office is weasel-free. The senior team expects big engagement dividends from this. They have been hearing employees ask to ditch the weasels for years. And on the first day Post-Weasel, the staff is ecstatic. “This is so nice!” everyone says to each other. “Best. Day. Ever.” someone posts (in GIF form) on the company Slack. They celebrate by throwing stuffed weasels at each other and laughing with relief. On Day 2, the atmosphere is still festive. The next week is calmer, but people still seem to have an extra spring in their step and an extra heart emoji in their DMs.

By the third week, however, the euphoria is gone. People's moods have sunk back down toward the old status quo. True, there are no more shrieks of “Youch!” every hour or so. People aren’t so resentful or nervous anymore. But they don’t seem more motivated about their work, either. The senior team is perplexed. What went wrong?

Introducing: Motivation-Hygiene Theory

A better question than “What went wrong” is: “What didn’t go right?”

The reason that removing the weasels from our fictional office didn’t send engagement through the roof—and why higher salaries and better salary transparency won’t, either—can be explained by psychologist Frederick Herzberg’s “motivation-hygiene theory.” Herzberg divided workplace experiences into two groups:

“Hygiene factors” can’t make you happy, but they can make you miserable. Think of your knees. When your knees are in good health, you don’t walk around thinking, “Wow, my knees are feeling phenomenal today! That makes me so happy!” In fact, when your knees have no problems, you don’t even notice them. But go sprain your knee, and, well … in the worst way, you notice! (As we write this, one of us is on crutches from a minor knee injury, so trust us on this.)

The other group is “motivational factors.” These won’t, in their absence, make you miserable, although the lack of them might leave you feeling sort of blah. But when they’re there, they can light you up, in the best way. When these factors are in place in your job, you become highly engaged: you go above and beyond to do your best work and are eager to recommend your organization to others as a great place to work. The bottom line isn’t just that you do your job, it’s that you do your job well, add value to the organization, and find meaning and fulfillment in your everyday working life.

Salaries—along with healthy knees and a lack of biting weasels—are hygiene factors. Other hygiene factors include workplace policies and procedures, a safe and pleasant physical work environment, social status, and reliability of employment. And of course, these things matter; people will be dissatisfied if you don’t get them right and they will be much more likely to leave. But hygiene factors are floors for creating a great place to work, not ceilings. They aren’t engagement drivers, because even getting every one of them right just isn’t enough to get people truly engaged. Getting them right is just enough to get to normal.

Trusted leaders, good communication, and a sense that the organization truly cares about employees as people—these are what we call engagement drivers, and what Herzberg would call motivational factors. They go beyond fixing what’s wrong and build organizational cultures that are actively right. We have seen this in our data year after year. So remember: All aspects of the workplace experience matter. But some of them really inspire us; others just nip at our ankles.

Read more stories by Amy Born & Gali Cooks.