Employees prefer financial rewards

17 April 2007

Money makes the world go round: employees prefer financial rewards

Two in three employees prefer financial rewards over straight non-cash benefits or internal recognition, which is a sharp increase from 12 months ago, according to a survey by specialist recruiter Hays.

69 per cent of employees surveyed said they prefer financial rewards, with 16 per cent preferring non-financial rewards and 15 per cent preferring internal recognition.

In a similar survey by Hays in April 2006, 42 per cent of employees surveyed said they prefer financial rewards, with 9 per cent valuing non-financial rewards. This shows a significant increase in the number of people preferring cash rewards.

“The way in which staff are rewarded for hard work or successful results is an important part of employee engagement and a successful employment relationship,” said Jason Walker, regional director of Hays in New Zealand.

“As this survey shows, financial rewards such as bonuses or an earlier salary review have become increasingly important to employees over the past 12 months. Consequently an effective reward strategy needs to incorporate cash components.”

Jason says there are several reasons for this increased focus on financial rewards. “Business activity has increased and people are generally busier in their jobs. Coupled with the knowledge that we are in a candidate short market and given higher grocery, petrol and mortgage costs, employees’ emphasis has moved to cash payments rather than non-cash benefits.

According to Hays, non-financial benefits are still important though. “Benefits such as gym memberships or movie vouchers can be utilised in addition to cash rewards and are useful in that they allow an employer to recognise and celebrate a staff member’s efforts and successes in a personal way. It’s critical these days for any employer looking at attracting and retaining staff to consider how they compete with similar organisations in the types of benefits they offer.

However Jason offers an element of caution in the use of rewards. “There should be a fair and equal system of processes for rewards and they need to suit the audience they are intended for as there is variation in what suits Generations X, Y and Baby Boomers. For instance paid maternity leave might be very significant for one group but not so useful for another.

“It’s also not just about the obvious rewards, financial or otherwise. Rewards are just one element of a good retention strategy and acknowledgement of an employee’s contribution, career opportunity, the provision of new challenges, the opportunity for training and development, salary reviews and the influences of strong management are all equally important elements,” he said.

1,881 people completed the online surveyed. The survey question asked, “Do you prefer financial (cash) rewards, non-financial rewards like a weekend away or gym membership, or internal recognition?”. The full results were: financial (cash) rewards - 68.65%; non-financial rewards - 16.31%; recognition internally - 15.04%.

The annual Hays Salary Survey will be released on 1st June. It is a comprehensive guide to hundreds of job roles. For more information on salary statistics and trends visit hays-hps.co.nz/salary

Hays has four specialist recruitment offices across New Zealand in Auckland, South Auckland, Christchurch and Wellington. www.hays-hps.co.nz

ENDS

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