About the Author(s)


Mark H.R. Bussin Email symbol
Gordon Institute of Business Science, University of Pretoria, South Africa

Nokwanda N. Thabethe symbol
Gordon Institute of Business Science, University of Pretoria, South Africa

Citation


Bussin, M. H. R., & Thabethe, N. N. (2018). Reward preferences in South Africa’s media industry. SA Journal of Human Resource Management/SA Tydskrif vir Menslikehulpbronbestuur, 16(0), a1010. https://doi.org/10.4102/sajhrm.v16i0.1010

Original Research

Reward preferences in South Africa’s media industry

Mark H.R. Bussin, Nokwanda N. Thabethe

Received: 17 Nov. 2017; Accepted: 30 May 2018; Published: 31 July 2018

Copyright: © 2018. The Author(s). Licensee: AOSIS.
This is an Open Access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

Orientation: Employee remuneration is a key driver of employee engagement and thus organisational performance. A thorough understanding of employee needs is essential to enable management to develop an equitable mix in reward strategy.

Research purpose: The purpose of this study was to examine context-specific reward preferences in order to determine the overall reward preferences of employees in the media industry with the aim of improving existing reward strategies.

Motivation for the study: The focus on reward preferences has emerged as a critical element in identifying what really motivates productive behaviour within the workplace. A better understanding of reward preferences is required to find ways to improve performance within the world of work.

Research approach/design and method: The research was a quantitative, empirical and descriptive study of reward preferences in an industry-specific context. A self-administered survey was used as a measure and analysed using non-parametric tests to identify variances between dependent and independent groups, testing for internal consistency and non-parametric analysis of variance (ANOVA).

Main findings: The following five reward preferences were rated as most important by participants: base pay or salary, merit increase that is linked to personal performance, incentives and bonus, safety and security at the workplace, and market-related salary. The results indicated that monthly salary (base pay) is the most preferred and/or significant reward category in attracting, retaining and motivating employees.

Practical/managerial implications: Managers in South Africa’s media industry should investigate their organisations’ rewards through the perspective of the total rewards concept to assess and develop an equitable mix in reward strategy. A comprehensive analysis of reward preferences is required to ensure that all aspects that promote the attraction, retention and motivation of employees are taken into consideration. The importance of base pay should not be under-estimated as it represents the most significant reward preference for employees in the South African media industry.

Contribution/value add: This study adds to the body of social science research, providing a deeper understanding of reward preferences, specifically in the context-specific setting.

Introduction

Problem statement

The 21st century organisations face an economically difficult, highly competitive and ever-changing working environment. The demands on business are therefore to find work structures suitable to a dynamic, diverse and ambiguous workplace. The quality of human resources is of great importance to the success of any organisation, specifically in uncertain working contexts. In terms of employees, organisations require energy, dedication and engagement. Bearing these challenges in mind, organisations need to focus on acquiring and retaining talented employees and keeping them actively engaged in their work (Frank, Finnegan, & Taylor, 2004).

Key focus of the study

An important area in talent management and organisational management is employee engagement. Promoting employee engagement is a key strategy that can be adopted to attract, retain and motivate skilled workers in a complex and dynamic workplace in order to remain competitive (Kerr-Phillips & Thomas, 2009). Understanding reward preferences is one of the key ways in which employee engagement can be realised.

Background to the study

According to Boyd and Salamin (2001), employees offer a significant source of a sustainable competitive advantage for organisations. This was further detailed in a study by Ferreira (2012), which found that the challenges of work in the 21st century have an influence on attracting and retaining employees and that employers need to adopt a vigorous approach when developing employment and retention practices within the organisation. Having the right talent in essential roles is of strategic importance and is linked to the ability to attract, engage and retain talent, leading to competitive advantage.

A report by the South African Board for People Practices (2014) listed the shortage of research on factors influencing employee engagement and the poor alignment or integration of people management as the widest gaps in understanding how South African organisations can best leverage their biggest source of competitive advantage.

Labour market efficiency, which is a key determinant in driving productivity and competitiveness, is a primary indicator of sustainable economic growth. The Global Competitiveness Report 2014–2015 ranks South Africa 136 out of 144 countries in pay and productivity (World Economic Forum, 2015). This rating suggests that the pay scale (remuneration) of organisations within the South African economy is not strongly related to employee productivity. This can potentially hamper the country’s competitiveness as it impacts on organisations’ ability to deliver on their strategic objectives, can reduce the competitiveness and productivity of organisations and can lower innovation and creativity. This is a worrisome assessment when considering that employees provide an important source of a sustainable competitive advantage for organisations.

As a result, employee remuneration calls for a thorough understanding of employee needs and reward preferences to enable management to develop an equitable mix in reward strategy. A well-designed and relevant reward strategy can enhance the performance of employees and thus positively influence the realisation of the overall organisational objectives. Employee reward is therefore an important topic where innovation is required to optimise people practices, differentiate organisations in the labour market and place organisations in a better position to attract, motivate and retain skilled employees to support sustainable growth.

Armstrong (2012) and Meyer, Mukerjee and Sestero (2001) argue that reward strategies are crucial elements of any human resources (HR) strategy, and they play a strategic role in developing the performance and profitability of an organisation. Furthermore, Armstrong (2012) argues that reward strategy actually delivers performance by helping to foster a high-performance culture; identifying and rewarding key skills, competencies and performance; and making certain that reward systems are market-based, fair and cost-effective.

According to McKinsey (2012), the global shortage of skills has resulted in a ‘war for talent’ with a progressively competitive backdrop for recruiting and retaining skilled employees. This has resulted in a strategic business challenge where talent serves as a critical driver of organisational performance (Michaels, Handfield-Jones, & Axelrod, 2001).

Organisations can better respond to attraction and retention concerns by understanding the reward preferences that employees have. An early study by Horwitz, Heng and Quazi (2003) identified the need to differentiate HR practices to manage different groups and identified competitive pay packages as the most effectual strategy.

Trends from the research literature

Snelgar, Renard and Venter (2013) argue that a ‘one-size-fits-all’ reward approach is no longer effective, especially considering that employee retention and motivation are a serious challenge in South Africa. The implications of this are that there is a need for a contemporary understanding of which rewards are preferred by employees to develop strategies for attracting and retaining key staff (Bussin & Toerien, 2015).

Perrow (1986) notes the importance of incentives and self-interest in organisations. In this context, agency theory provides the theoretical foundation for the understanding of reward systems, as the assumption is that employees will not make any more effort than the level that is equal to the value for the pay they are receiving. This leads to the practical interpretation that organisations should tailor their compensation in a way that gets the desired behaviours from employees (Armstrong, 2012). It follows that clear and tailored rewards strategies should then result in reward policies and practices, which provide guidelines and action plans formulated to reward and motivate employees.

Research by Nienaber, Bussin and Henn (2011) in South Africa showed that total rewards models structured according to employee preferences are instrumental in the attraction, motivation and retention of key employees. Furthermore, Schaufeli and Bakker (2004) found that positive attitudes towards work such as organisational commitment, motivation and job involvement are also related to employee engagement.

Research objectives

This research examined context-specific reward preferences to determine the overall reward preferences of employees in the media industry. The implications of the findings can be used to improve existing reward strategies, as opposed to mimicking other organisations’ reward practices, which may not be in line with their context-specific culture.

An additional objective was to deepen the understanding of reward preferences in the context-specific setting of the media industry. The PricewaterhouseCoopers (2015) media outlook report argues that South Africa’s media market will continue its run of double-digit year-on-year growth, as it had recorded an 11.5% rise to reach R112.7 billion in 2014. The industry forecasts a healthy compound annual growth rate (CAGR) rise of 9.4% by 2019, reaching R176.3 bn. The media sector is set to be a major generator of economic value, and the industry revenue growth is set to outstrip the country’s economic growth. Organisations, therefore, need to ensure that they are strategically positioned and leverage this projected growth. As employees have been recognised as the source of competitive advantage, effective rewards should be used to influence the attraction, retention and motivation of key, critical and talented individuals, who must be obtained and kept in order for the industry to be competitive.

Current economic growth in South Africa is slow (World Bank, 2016), and with accompanying economic volatility, employee reward preferences are bound to change. Specifically, money becomes a deficiency need, making it important to look at the impact of rewards on engagement. Organisations need to look at the perspective of total rewards focusing on tangible and intangible reward elements (Royal, 2014).

Research questions

The following research questions were investigated in this study:

  • Research Question 1: What reward preferences do employees in the media industry have?
  • Research Question 2: What are the reward preferences that promote attraction in the media industry?
  • Research Question 3: What are the reward preferences that promote retention in the media industry?
  • Research Question 4: What are the reward preferences that promote motivation in the media industry?
  • Research Question 5: Do demographic variables play a significant role in determining the different reward preferences of employees within the media industry?
What will follow?

The article will commence with various theories underlying rewards and reward preferences. Thereafter, the research method used to contest or support the findings of the literature review will be detailed. The research questions will be answered in the results section, and a discussion section, elaborating on the results, will commence thereafter.

Critical evaluation of the literature

In this study, rewards refer to the sum of financial (basic pay, variable pay and employee benefits) and non-financial compensations, such as recognition, learning and development opportunities and increased job responsibility, paid by organisations to employees in exchange for their services (Jiang, Xiao, Qi, & Xiao, 2009). Horwitz et al. (2003) and Kwon and Hein (2013) identified competitive monetary rewards as a basis for attracting and retaining employees. For this reason, compensation formed the base of this research and was considered as one of the key factors influencing employee engagement and achieving organisational success.

According to Bamberger and Levi (2009) and Bussin and Toerien (2015), rewards impact on performance and productivity; so, the alignment of reward strategies with organisational strategies can ensure organisational effectiveness, positive outcomes and increased employee effort, which are important combinations for organisations to ensure competitive advantage. It is therefore important to invest in total rewards programmes (Deloitte Consulting, 2014).

In the ever-changing work environment, Snelgar et al. (2013) conclude that a standard ‘one-size-fits-all’ reward approach is no longer effective, especially considering that employee retention and motivation are a serious challenge in South Africa. It has been suggested that reward preferences vary based on a number of factors, and preferences may differ across industries and are influenced by various demographic factors.

Theoretical underpinning – Agency theory

According to Perrow (1986), agency theory holds that employees will not make any more effort than the level that is equal to the value for the pay they are receiving. Implications for organisations are that they should tailor their compensation in a way that gets the desired behaviours from employees (Armstrong, 2012).

According to the Human Resource Practice, agency theory draws attention to the different interests and goals of an organisation’s stakeholders and the way that employee remuneration can be used to align these interests and goals. In the organisation, employers and employees are the two stakeholders, where the employers assume the role of principals and the employees the role of agents. In this context, the compensation payable to employees is the agency cost. According to the theory, the principal must choose a contracting scheme (reward strategy) that helps align the interests of the agents with the principal’s own interests.

A study by Nienaber et al. (2011) and one by Snelgar et al. (2013) found that reward preferences differ in the employee attraction, retention and motivation lifecycle. The study found that base pay (monetary rewards) was the biggest factor in attracting employees, whereas career management (non-monetary rewards) was the biggest factor in motivating employees. Contrary to the above studies, Bhengu and Bussin (2012) showed that monetary rewards were the third-most important influencing factor in attracting, retaining and motivating employees. There is thus conflicting evidence in evaluating the importance of reward in attracting, retaining and motivating employees. According to Stahl et al. (2012), a holistic total reward approach is required for effectiveness across the attraction, retention and motivation life cycle.

Studies by Bloom and Michael (2002), Levine (1991) and Pfeffer and Langton (1993) found that unrestricted compensation practices are related to employee cooperation, involvement, satisfaction and commitment; however, they did not examine specific compensation practices.

In response to the current economic crisis and talent or skills shortages, organisations are concerned with keeping employees engaged and motivating them under such circumstances. As a result, renewed focus on compensation as a catalyst that boosts productivity and having clearly defined reward strategies is essential in improving performance that lends itself to productivity and gives an incentive for employees to perform.

Motivation is defined by Steers and Porter (1991) as a process by which behaviour is energised, directed and sustained to help organisations increase their productivity and is interconnected with engagement. First-hand studies by Alexander (1993), Hall (1986), Strauss and Wohart (2004) and Wakeford (2004) found higher remuneration stimulated employee productivity via the efficiency wage argument. Contrary to the argument that higher remuneration stimulated employee productivity, research by Horwitz et al. (2003) found non-monetary rewards to being the most influential in motivating employees, and consequently, pay and benefits had limited impact on motivating employees. This assertion is supported by the findings of Scott, McMullen, Royal and Stark (2010), who stated that organisations need to look at utilising total rewards strategies (including both monetary and non-monetary rewards) to promote employee engagement.

Theoretical framework surrounding rewards

According to Wilson (2003), the purpose of reward systems is to establish an efficient way to deliver positive outcomes for contribution towards desired performance as it influences the actions of individuals.

Total rewards, according to the WorldatWork Total Rewards Model (the main reward model that forms the basis for this study), describes reward strategies as a combination of five elements of reward in order to create value for the organisation and its employees. It is considered as everything of value that forms part of the relationship between an employer and an employee (Medcof & Rumpel, 2007). According to WorldatWork (2010), the following five elements of reward have a direct relationship on an organisation’s ability to attract, motivate and retain employees:

  • Compensation or remuneration: Any pay provided by an employer to an employee for services rendered.
  • Benefits: Programmes employers use as an add-on to any cash compensation that employees receive.
  • Work–life: A set of various organisational practices that support efforts for employees to achieve success both at work and at home.
  • Performance and recognition: Alignment of employee effort to the achievement of business goals and the acknowledgment of these efforts.
  • Development and career opportunities: Learning experiences that enhance employees’ skills and competencies and support of individual plans to advance career goals.

The basic premise is that when these elements are properly designed, it results in reward strategies (defined as the direct development and operation of reward practices) that inform reward policies and practices. These practices and policies in turn provide guidelines and action plans formulated to reward and motivate employees (Kwon & Hein, 2013). Research by Nienaber et al. (2011) showed that total rewards models structured according to employee preferences are instrumental in the attraction, motivation and retention of key employees.

According to Schaufeli, Salanova and Gonza´lez-Roma´ (2002), employee engagement is defined as a positive, fulfilling, work-related state of mind that is characterised by energy, commitment and concentration. Employee engagement is a critical driver of success in organisations (Al Mehrzi & Singh, 2016) and is believed to manifest when employees experience an ideal fit and identification of self and their work roles. Employee engagement is linked to higher productivity and lower attrition, and as a result, the concept of engagement has become a fundamental determinant of organisational success.

The drivers of employee engagement are critical factors that lead to employee engagement and create the feeling by employees of being valued and involved. Aon (2015) listed career opportunity, reputation and compensation as the top three engagement drivers across markets and regions from 2013 to 2015 (Rama Devi, 2009). A study by Schaufeli and Bakker (2004) further indicated that positive attitudes towards work, such as organisational commitment, motivation and job involvement, are related to employee engagement. Al Mehrzi and Singh (2016) found that other correlates of employee engagement including perceived organisational support, leadership, teamwork and organisational culture significantly affect employee engagement through employee motivation.

According to Cropanzo and Mitchell (2005), the social exchange theory presumes that when individuals are happy with the rewards provided by the prospective or current organisation, individuals reciprocate with positive attitudes that in turn increase levels of commitment and performance which leads to an increase in productivity (Newman & Sheikh, 2011). A study by Misra, Jain and Sood (2013) agreed with Newman and Sheikh (2011), asserting that when desired rewards are received, individuals respond with greater levels of engagement which is linked to positively influencing motivation, performance and a desire to remain with an organisation.

Coffman and Gonzalez-Molina (2002) found that employee engagement has a statistically significant relationship with productivity, profitability, employee retention and business success. Bakker and Demerouti (2008) concluded that an engaged employee is willing and able to contribute to the success of the organisation, putting discretionary effort into their work, going beyond the required minimum to get the job done as engagement is a predictor of overall job satisfaction, and reducing employee turnover (Kurnia & Welly, 2015).

Reward preferences – Attraction, retention and motivation

Schuler and Rogovsky (1998) and Von Glinow (1985) argue that there is a close interdependence between organisations’ rewards, motivation and the culture in which the organisation is embedded. Considering this, it is surprising that the influence of industry-specific culture on reward preferences remains largely unexplored. Lawler (1995), Wilson (1995) and Zingheim and Schuster (1995) found that successful alignment of rewards with business strategy relies very much on understanding employee reward preferences.

A study by Schlechter, Faught and Bussin (2014) provided a generic study in reward preferences of South African employees, and the results of this study showed that base pay was considered to be the most preferred reward component and an important reward component in attracting and retaining employees. This study notably also found differences between reward preferences and demographic variables, including age, gender and job level, providing support for segmentation of rewards based on certain demographic variables.

Considering the needs of different generations, the study by Masibigiri and Nienaber (2011) explored factors that affect the retention of different generations and found specific reward preferences existed among generational groups. However, Moore and Bussin (2012) investigated the reward preferences of veterans, baby boomers, generation X and generation Y and found no preference among generational groups. These research findings provide guidelines to focus on individual and demographic factors to develop reward strategies.

Chiang and Birtch (2005) and Nienaber et al. (2011) found that reward preferences do differ according to various demographic factors. Meyer and Kirsten (2012) also found that many factors such as age, values, gender and culture affect employee reward preferences and therefore are useful to consider in structuring reward packages that suit personal interests.

There is limited research on reward preferences and segmentation of the workforce, and this review of the literature has mostly focused on the financial services industry, knowledge workers of South African information technology companies and artisans, whereas South Africa has a number of industries with diverse characteristics that could benefit from understanding what reward categories employees consider important and how demographic variables influence these reward preferences. There is still much argument over whether reward packages should be tailor-made to suit individual employees as it has been argued that a ‘one-size-fits-all’ approach to rewards is no longer effective.

Research design

Research approach

The research design is a quantitative, descriptive study entailing the collection of numerical data and describing the characteristics of objects, people or organisations in order to explain a particular phenomenon in answering the research questions (Zikmund, 2003).

Research method
Research participants

The participants in this study consisted of all employees of a large media organisation that has interests in new media, content production, specialised publishing, research, radio broadcasting and television sphere. At the time of the study, the company had 736 permanent employees across its various subsidiaries.

All employees were able to volunteer to complete the survey. One hundred and thirty-one employees completed the survey.

Measuring instrument

The Rewards Preferences Questionnaire (Nienaber & Bussin 2009) was administered online. The questionnaire consisted of a series of questions and prompts to allow participants to answer questions during a single visit and submit their responses (Saunders & Lewis, 2012).

Section A of the questionnaire collected participants’ demographic information such as age, gender, race, occupational level, division and department within the organisation. For section B of the questionnaire, the questions were derived from constructs extracted from the WorldatWork Total Rewards Model (WorldatWork, 2010) to measure reward preferences using a 5-point Likert scale on each reward component from the model indicating the level of importance for each component.

Section C of the questionnaire focused on enabling participants to rank which reward component had the greatest impact on attracting, retaining and motivating them. This also functioned as a way to assess the overall reward preferences of participants.

Research procedure

A survey pre-test was conducted with a group of six individuals for input and comments; no revisions were required. All participants completed a self-administered web-based questionnaire hosted by Typeform. With assistance from the different subsidiaries’ human resources managers, the questionnaire link was distributed electronically via email to the entire population, with a 6-week response window in order to allow time for targeted individuals to complete the survey. Reminders were sent periodically to encourage participation.

Statistical analysis

The data were analysed quantitatively using a three-stage data analysis process. Stage 1 involved descriptive statistical analysis to describe, show or summarise data in a meaningful way, focusing on measures of centrality and dispersion. Stage 2 pertained to basic inferential statistics used to make generalisations from a sample to a population to help assess the strength of the relationship between the study’s independent variables and dependent (effect) variables. Stage 3 inferential and multivariate statistical analysis focused on observations made on many variables (Creswell, 2014). The statistical techniques utilised were means score ranking test and analysis of variance (ANOVA).

Results

The survey was completed by 131 participants. Table 1 shows a summary of the total rewards elements, detailing the reward preference comparisons by demographics. A Kruskal–Wallis ANOVA was completed, comparing two or more independent groups with significant differences shown in shaded areas.

TABLE 1: Total reward preference comparisons by all demographics.
Reward preferences based on demographic variables
Gender

The summary of mean ranks of reward components based on gender showed the extent of rating difference for medical aid, retirement, return to work after maternity and paternity leave, and feedback and performance between the participants. The summary of mean ranks of the reward components based on gender showed that female participants have higher mean ranks on all four reward components.

Age

When the data were analysed by age groups, six reward components revealed statistically significant results as presented in Table 1. The mean ranks suggest that study leave, learning and development, career path and international secondment are the most appealing rewards for participants in the age group of 19–29 years.

With a mean rank of 74.41, participants aged between 30 and 39 years consider sabbatical leave as the most important reward. Yet, participants aged between 40 and 49 years recorded the highest mean rank for base pay.

Ethnicity

The summary of mean ranks shows that there was a statistically significant difference among the four racial groups considered for 16 rewards components as presented in Table 1. Notably, mean ranks based on ethnicity showed that participants who indicated that they are African had the highest mean ranks for the majority of significant mean ranks except for retirement, children holiday programme and formal recognition. Further to this, mixed race and white participants did not record any highest mean ranks for reward components which were statistically significant. Indian respondents, on the other hand, had the highest mean ranks for retirement benefits, children holiday programme and formal recognition.

Number of children

The summary of mean ranks of reward components based on the number of children revealed that there was a statistically significant difference among the five groupings of a number of children for children holiday programme and informal recognition. Participants with three or more children stood out for children holiday programme. In particular, participants who indicated that they have four or more children recorded the highest mean rank on children holiday programme. On the contrary, respondents who indicated that they have no children had the highest mean rank for informal recognition.

Education

Participants who indicated that matric is their highest educational qualification had the highest mean rank for base pay. In contrast, participants who stated that in addition to matric, they had also acquired certificates for certain skills stood out for study leave and learning and development. Postgraduate degree holders showed sabbatical leave as their most preferred reward.

Job level

The results show that general staff had the highest mean rank for study level. Specialists recorded the highest mean rank for subsidised care for dependents, office environment, on-site medical facilities, learning development and funding for tertiary education to any other reward benefits. Participants in the other jobs group had the highest mean rank for good working relationship and informal recognition.

Media division

As a group of companies, the Media division comprised different subsidiaries or divisions. A Kruskal–Wallis ANOVA test was conducted to evaluate differences in reward preferences among groups of companies. The summary of mean ranks shows that there was a statistically significant difference among the groups of the Media divisions for seven rewards components.

Participants from radio media had the highest mean rank for good working relationship, whilst participants from the publishing division have parking bay and increases income linked to inflation as their most preferred rewards. Participants working for Media Mark recorded the highest mean rank for retirement. The highest mean rank for participants in other media companies was recorded for career path and accountability for job outputs.

Job role

The results show that participants in from the human resources department have the highest mean rank for sabbatical leave and flexible working hours. Participants from the Internet Technology (IT) department had the highest mean rank for good working relationship and monthly communication sessions. Participants in the marketing department only had the highest mean rank for on-site childcare facilities. Finance department participants had the highest mean rank for funding for tertiary education, whilst participants from the programming department had the highest mean rank for office environment and informal recognition. In addition, the legal department has its participants finding the quality of co-workers in the team of high importance. These results suggest that the reward preferences vary within and across departments.

Overall reward preferences sorted by mean

The most favoured reward component by the participants were salary, merit increase linked to personal performance, and incentives and bonus, and the least preferred reward components were on-site childcare facilities, children holiday programme and subsidised care for dependent. The top and the most preferred category as per the participants in structuring their own rewards package is base pay, and the least preferred is quality work environment category.

Reward preferences in attraction, retention and motivation

To determine the most significant reward factors that drive attraction, retention and motivation, participants were asked to indicate which one of the following six reward categories had the greatest impact on an organisation’s ability to attract, retain and motivate them:

  • monthly salary or remuneration
  • variable pay (bonus or long-term incentive)
  • benefits (medical aid or retirement funding)
  • performance and career (development opportunities, quality discussions with your manager)
  • quality work environment (fitness centre on-site, medical centre on-site, latest technology)
  • work or home integration (your ability to balance your work and home commitments, e.g., flexible work schedules and half day leave).

Participants were asked to tick only one block for each category (attraction or retention or motivation). The results are presented in subsequent sections.

Reward preferences in attraction

The majority of participants (68.7%, n = 90) indicated that monthly salary was the most significant component of promoting attraction. In contrast, quality work environment stood out as the least significant category in influencing the decision to join an organisation. Figure 1 shows the ranking of factors which promote employee attraction.

FIGURE 1: Ranking of factors which promote employee attraction.

Reward preferences for retention

Most participants (46.6%) ranked monthly salary as the most significant way to promote retention. The second-most preferred reward preference category for retention was related to performance and career. In contrast, only 3% (n = 4) of the participants indicated that they value the quality of work environment as a driver of retention. Figure 2 shows the ranking of factors which promote employee retention.

FIGURE 2: Ranking of factors which promote employee retention.

Reward preferences for motivation

Most of the participants (46.6%) ranked monthly salary as the most significant means of driving motivation. The second-highest ranked category for motivation was related to performance and career. In contrast, only 3% (n = 4) of the participants indicated that they preferred the quality of work environment as a means of motivation. Figure 3 shows the ranking of factors which promote employee motivation.

FIGURE 3: Ranking of factors which promote employee motivation.

The results for reward preferences suggest that monthly salary (base pay) is the most highly ranked reward category for promoting employee attraction, retention, and motivation. Quality work environment stood out as the lowest ranked category for attraction, retention and motivation.

Reward category and component internal consistency

Reward components were grouped into the following five categories – compensation; benefits; work–life (work environment); career, learning, and development; and performance and recognition. To ensure consistency, all statements were based on a 5-point Likert scale. The Cronbach Alpha test was used to determine the internal consistency of the reward categories, where scores equal or greater than 0.6 were considered acceptable and scores approaching 1.0 were considered excellent scores. The top and most preferred category as per the participants in structuring their own rewards package is base pay and the least preferred is quality work environment category.

Discussion

Research question 1: What reward preferences do employees in the media industry have?

Results show that overall participants ranked base pay as the most preferred and/or significant form of reward. This finding differs with the findings of Nienaber et al. (2011) and Snelgar et al. (2013), whose research indicated that career management (a form of non-monetary reward) was the most significant reward preference. The finding supports the conclusion of Schlechter et al. (2014) who also found that base pay was considered to be the most preferred reward component. There remains no clear answer to the question of most significant reward preference, and further research at a larger scale will be required to provide a definitive position.

Research questions 2, 3 and 4: What are the reward preferences that promote attraction, retention and motivation in the media industry?

Reward preferences did not vary across the categories of attraction, retention and motivation. Monthly salary was ranked as the most influential reward preference, followed by performance and career and then work home integration. It is possible that the way the questions were phrased influenced the results, and it is suggested that this potential extraneous variable be considered in how future surveys are designed.

Studies by Nienaber et al. (2011) and Snelgar et al. (2013) indicated that reward preferences differ in the employee attraction, retention and motivation lifecycle. The results for reward preferences for this study indicated that monthly salary (base pay) stood out as the most preferred reward category in attracting, retaining and motivating employees. From an attraction perspective, this correlates positively with the studies of Nienaber et al. (2011) and Snelgar et al. (2013) who also found that base pay (a form of monetary reward) was the most significant factor in attracting employees. From a motivation perspective, the results contradict Nienaber et al. (2011) and Snelgar et al. (2013) who found that career management (a form of non-monetary reward) was the most significant driver of employee motivation.

The results also differ from the study by Bhengu and Bussin. (2012) which showed monetary rewards as the third-most important influencing factor in attracting, retaining and motivating employees. Lazear (1995) concluded that the reward systems of organisations should be tailored to take the characteristics of their workforce into account. Medcof and Rumpel (2007) assert that there is a difference in reward preferences between industries. The results of this study lend support to both Lazear (1995) and Medcof and Rumpel (2007) and support the notion of context-specific reward preferences.

Research question 5: Do demographic variables play a significant role in determining the different reward preferences of employees within the media industry?

Gender: From the study, statistically significant results were indicated for medical aid, retirement, return to work after maternity and paternity leave, and feedback and performance. This indicates that females had a higher preference for medical aid, retirement (benefits component), phased return to work after maternity leave (work–life component), and also feedback and performance (Performance & Recognition component). These results are similar to those of Nienaber et al. (2011) which indicated that women had a higher preference for performance, medical aid and retirement funds as the mean scores for these reward categories were higher than those of men.

Age: Study leave, learning and development, career path, and international secondment are the most appealing rewards for participants in the age group of 19–29 years. Participants aged between 30 and 39 years consider sabbatical leave as the most important reward. Finally, participants aged between 40 and 49 years recorded the highest preference for base pay.

Base pay: This noted a significant relationship between age group, educational level and division. The findings match the study by Nienaber et al. (2011) that observed significant differences between age groups are most notable for base pay preference is in the age group 39–48 years. Benefits also revealed an observed relationship between the following demographic variables – gender, age group, study leave and sabbatical leave. Ethnicity also displayed a relationship for retirement, study leave, child educational subsidy and sabbatical leave, in terms of its influence on reward preferences.

Job level: Reward preferences based on job level results showed a statistically significant difference among the groups of job levels for eight reward components as presented in Table 1. The most noteworthy results were that general staff had the highest preference for study leave; specialists recorded the highest preference for subsidised care for dependents, office environment, on-site medical facilities, learning development and funding for tertiary education to any other reward benefits; participants in the other jobs group had the highest preference for good working relationship and informal recognition.

Overall, the results from the study, and as discussed above, support the findings from the study by Schlechter et al. (2014) that also found differences between reward preferences and demographic variables, including age, gender and job level. This provides support for the segmentation of rewards based on certain demographic variables and contributes to the literature on reward preferences. This is also in line with the research findings of Johns and Gratton (2013) who found that the rewards preference profile of certain workers would be different, supporting the notion that demographic and industry-specific factors influence reward preferences.

Internal consistency of reward elements

The key part of this study was assessing the internal consistency of the different reward categories to determine if the results of these categories were fitting to group in order to assess overall reward preferences. Notably, the compensation category did not score acceptable levels as per the Cronbach Alpha reliability test. As the top-rated category and most preferred reward component, its results showed a poor correlation with the elements in its category.

The compensation category included the following elements:

  • base pay
  • incentives and bonuses
  • merit
  • market-related salary
  • remuneration structure
  • income Inflation
  • bonus linked to personal performance.

It is both interesting and surprising that the level of internal consistency within this specific category was low. The individual elements are commonly considered to be associated with compensation and it is not clear what caused the low reliability score. Literature on the subject of reward and common sense suggest that these elements should be reflective of a compensation category. Further research with a larger sample size may be able to shed more light on this irregularity in future.

Principal findings

The study showed similar reward preferences in the scenarios of attraction, retention and motivation in principle supporting the literature that asserts that the main elements of monetary compensation are still crucially important (Bunton & Brewer, 2012; Horwitz et al., 2003; Moore & Bussin, 2012; Nienaber et al., 2011; Schlechter et al., 2014; Snelgar et al., 2013). This is an indication that base pay does not seem to lose its desirability and therefore it is important that employees feel that they are adequately rewarded to contribute towards achieving organisational goals.

In examining the relative influence of total rewards elements on reward preferences by employees in this context, participants ranked base pay or salary, merit increase that is linked to personal performance, incentives & bonus, safety and security at the workplace, and market-related salary as the five most important reward components preferred by them, further indicative of the preference towards the monetary elements in the total rewards model.

This is contrary to some of the findings by Bloom and Michael (2002), Levine (1991) and Pfeffer and Langton (1993) who asserted that competing for talent solely on monetary elements may not prove to be the most effective mechanism in gaining competitive advantage. This can be attributed to the fact that the total rewards model adopts a holistic approach and combines five elements of reward to create value for the organisation and its employees.

In a mix of reward elements, the monetary component still remained the most preferred reward across the attraction, retention and motivation lifecycle. This is supported by findings by Scott et al. (2010) in that organisations need to look at utilising total rewards strategies to build on employee engagement.

Another key finding stems from observed significant differences towards reward preferences as a result of demographic variables, similar to the studies by Bussin and Toerin, (2015), Kowalewski and Phillips (2012) and Snelgar et al. (2013), and the notion that it is best for employers to have an understanding of demographic variables and their impact in order to design appropriate reward strategies.

Implications for management

Considering the insight from this study, the results are an important starting point in assessing and developing methods to attract, retain and motivate employees and key talent in organisations. A holistic total rewards approach is required for effectiveness across the attraction, retention and motivation lifecycle, including both monetary and non-monetary rewards. Despite the requirement and best practice of implementing a holistic reward mix, this study suggests that the importance of base pay cannot be minimised and is the most significant reward preference in the South African media industry.

Managers and leaders in the South African media industry need to investigate their organisations’ rewards through the perspective of the total rewards concept used in this study in order to evaluate and ensure that they have considered all of the aspects required to attract, retain and motivate employees.

Limitations of the research

The study is descriptive in nature. Therefore, the results are limited to numerical descriptions, and it was not possible to explore reasons for the participants’ selection of reward preferences. Additionally, the sample was not representative of the population being studied; the survey did not test the entire population as the majority of employees chose not to participate. The results were also not without external influences such as economic and political factors. The study had a contracted timeframe, and it was therefore not possible to establish if the reward preferences were stable or as a result of temporal external influences. Most importantly, the low internal reliability score for the compensation category could impact the reliability of the main research findings on reward preferences.

Suggestions for future research

Future research should ideally examine specific compensation practices and extend to exploring causal relationship between rewards and attraction, retention and motivation of employees. Another important element is devising a way to fixing the correlation and reliability of the compensation category.

Conclusion

The purpose of this study was to examine context-specific reward preferences in order to determine overall reward preferences of employees in the media industry with the aim of improving existing reward strategies. The study has meet its purpose by illustrating the total reward components preferred by participants in South Africa’s media industry and indicates the importance of the adoption of a total rewards strategy as rewards are a key source to persuade individuals and ensure work productivity.

Rewards are used as a primary tool for organisations to attract competent key employees and improve the productivity of their employees. Compensation is an important element in understanding the drivers of engagement to increase employee engagement and promote the attraction, retention and motivation of employees.

Acknowledgements

Competing interests

The authors declare that they have no financial or personal relationships that may have inappropriately influenced them in writing this article.

Authors’ contributions

M.H.R.B. was the principal investigator and was responsible for the design and execution of the project and writing up of the article. N.N.T was responsible for field work and writing up of the article.

References

Alexander, C. O. (1993). The changing relationship between productivity, wages and unemployment in the UK. Oxford Bulletin of Economics and Statistics, 55, 87–102. https://doi.org/10.1111/j.1468-0084.1993.mp55001005.x

Al Mehrzi, N., & Singh, S.K. (2016). Competing through employee engagement: A proposed framework. International Journal of Productivity and Performance Management, 65(6), 831–843. https://doi.org/10.1108/IJPPM-02-2016-0037

Aon, H. (2015). 2015 Trends in global employee engagement. Retrieved from http://www.aon.com/: http://www.aon.com/attachments/human-capital-consulting/2015-Trends-in-Global-Employee-Engagement-Report.pdf

Armstrong, M. (2012). Armstrong’s handbook of reward management practice: Improving performance through reward. London: Kogan Page Publishers.

Bakker, A. B., & Demerouti, E. (2008). Towards a model of work engagement. Career Development International, 13, 209–223. https://doi.org/10.1108/13620430810870476

Bamberger, P. A., & Levi, R. (2009). Team-based reward allocation structures and the helping behaviors of outcome-interdependent team members. Journal of Managerial Psychology, 24, 300–327. https://doi.org/10.1108/02683940910952705

Bhengu, M. B., & Bussin, M. (2012). The perceived effectiveness of employee share options as a mechanism of talent management in South Africa. Acta Commercii, 12(1), 85–93. https://doi.org/10.4102/ac.v12i1.135

Bloom, M. C., & Michael, J. G. (2002). The relationship among organizational context, pay dispersion and managerial turnover. Academy of Management Journal, 45(1), 33–42.

Boyd, B. K., & Salamin, A. (2001). Strategic rewards systems: A contingency model of pay system design. Strategic Management Journal 22(8), 777–792. https://doi.org/10.1002/smj.170

Bunton, T. E., & Brewer, J. L. (2012). Discovering workplace motivators for the millennial generation of IT employees. In Proceedings of the 1st Annual conference on Research in information technology (RIIT ‘12) 13–18 October, (pp. 13–18). New York: ACM.

Bussin, M., & Toerien, W. C. (2015). Influence of reward preferences in attracting, retaining, and motivating knowledge workers in South African information technology companies. Acta Commercii, 15(1), Art. #290, 1–13. https://doi.org/10.4102/ac.v15i1.290

Chiang, F. T., & Birtch, T. A. (2005). A taxonomy of reward preference: Examining country differences. Journal of International Management, 11, 357–375. https://doi.org/10.1016/j.intman.2005.06.004

Coffman, C., & Gonzalez-Molina, G. (2002). Follow this path: How the world’s greatest organisations drive growth by unleashing human potential. New York: Warner Books, Inc.

Creswell, J. W. (2014). Research design: Qualitative, quantitative, and mixed methods approaches. Thousand Oaks, CA: Sage Publishing.

Cropanzo, R. & Mitchell, M. (2005). Social exchange theory: An interdisciplinary review. Journal of Management, 31(6), 874–900.

Deloitte Consulting. (2014). Global human capital trends 2014. Engaging the 21st century workforce. Retrieved from http://www2.deloitte.com: http://www2.deloitte.com/global/en/pages/human-capital/articles/human-capital-trends-2014.html

Ferreira, N. (2012). Hardiness in relation to organisational commitment in the Human Resource Management field. SA Journal of Human Resource Management, 10(2), 1–10. https://doi.org/10.4102/sajhrm.v10i2.418

Frank, F. D., Finnegan, R. P., & Taylor, C. R. (2004). The race for talent: Retaining and engaging workers in the 21st century. HR. Human Resources Planning, 27(3), 12–27.

Hall, S. G. (1986). An application of the Granger and Engle two-step estimation procedure to United Kingdom aggregate wage data. Oxford Bulletin of Economics and Statistics, 48, 229–239. https://doi.org/10.1111/j.1468-0084.1986.mp48003003.x

Horwitz, F. M., Heng, C. T., & Quazi, H. A. (2003). Finders, keepers? Attracting, motivating, and retaining knowledge workers. Human Resource Management Journal, 13, 23–44. https://doi.org/10.1111/j.1748-8583.2003.tb00103.x

Jiang, Z., Xiao, Q., Qi, H., & Xiao, L. (2009). Total rewards strategy going with the trend of the times. International Journal of Business and Management, 4(11) 177–183.

Johns, T., & Gratton, L. (2013). The third wave of virtual work. Harvard Business Review, 91(1), 66–72.

Kerr-Phillips, B., & Thomas, T. (2009). Macro and micro challenges for talent retention in South Africa. South African Journal of Human Resource Management, 7(1), 82–91. https://doi.org/10.4102/sajhrm.v7i1.157

Kowalewski, S. J., & Phillips, S. L. (2012). Preferences for performance based employee rewards: Evidence from small business environments. International Journal of Management and Marketing Research, 5, 65–76.

Kurnia, R., & Welly, J. (2015). The assessment of employee engagement level in a new institution during transition period. Journal of Business and Management, 4(1), 218–228.

Kwon, J., & Hein, P. (2013). Employee benefits in a total rewards framework. Benefits Quarterly; First Quarter (29,1) ProQuest Business Collection,29(1), 32–38.

Lawler III, E. (1995). The new pay: A strategic approach. Compensation and Benefits Review, 27(4), 14–22. https://doi.org/10.1177/088636879502700404

Lazear, E. (1995). Personnel economics. Cambridge, MA: MIT Press.

Levine, D. I. (1991). Cohesiveness, productivity and wage dispersion. Journal of Economic Behavior and Organization, 15(2), 237–255. https://doi.org/10.1016/0167-2681(91)90031-R

Masibigiri, V., & Nienaber, H. (2011). Factors affecting the retention of Generation X public servants: An exploratory study. South African Journal of Human Resource Management, 9(1), 1–11.

McKinsey Global Institute. (2012, June). The world at work: Jobs, pay and skills for 3.5 billion people. Retrieved from http://www.mckinsey.com/: http://www.mckinsey.com/global-themes/employment-and-growth/the-world-at-work

Medcof, J. W., & Rumpel, S. (2007). High technology workers and total rewards. The Journal of High Technology Management Research, 18, 59–72. https://doi.org/10.1016/j.hitech.2007.03.004

Meyer, C. S., Mukerjee, S., & Sestero, A. (2001). Work-family benefits: Which ones maximize profits? Journal of Managerial Issues, 13(1), 28–44.

Meyer, M., & Kirsten, M. (2012). Introduction to human resource management. Pretoria: Van Schaik.

Michaels, E., Handfield-Jones, H., & Axelrod, B. (2001). The war for talent. Retrieved from https://books.google.co.za/books?id=simZCd_YUC4C&pg=PA1&source=gbs_toc_r&cad=4#v=onepage&q&f=false

Misra, P., Jain, S., & Sood, A. (2013). Compensation: Impact of rewards and organisational justice on turnover intentions and the role of motivation and job satisfaction: A study of retail store operations in NCR. International Journal of Human Resources Development and Management, 13(2), 136–152. https://doi.org/10.1504/IJHRDM.2013.055414

Moore, A., & Bussin, M. (2012). Reward preferences for generations in selected Information and Communication Technology companies. South African Journal of Human Resource Management, 10(1), 1–9. https://doi.org/10.4102/sajhrm.v10i1.325

Newman, A., & Sheikh, A. Z. (2011). Organizational commitment in Chinese small- and medium-sized enterprises: The role of extrinsic, intrinsic and social rewards. The International Journal of Human Resource Management, 23(2), 349–367.

Nienaber, N., & Bussin, M. (2009). The relationship between personality types and reward preferences. Doctoral thesis. Johannesburg, South Africa: University of Johannesburg.

Nienaber, R., Bussin, M., & Henn, C. (2011). The relationship between personality types and reward preferences. Acta Commercii, 11(2), 1–21. https://doi.org/10.4102/ac.v11i2.153

Perrow, C. (1986). Complex organizations. New York: Random House.

Pfeffer, J., & Langton, N. (1993). The Effect of wage dispersion on satisfaction, productivity, and working collaboratively: Evidence from college and university faculty. Administrative Science Quarterly, 38(3), 382–407. https://doi.org/10.2307/2393373

PricewaterhouseCoopers. (2015). Entertainment and Media Outlook: 2015–2019 South Africa –Nigeria – Kenya (6th edn.). Johannesburg: Pricewaterhouse Coopers.

Rama Devi, V. (2009). Employee engagement is a two-way street. Human Resource Management International Digest, 17(2), 3–4. https://doi.org/10.1108/09670730910940186

Royal, M. (2014, March 20). The role of rewards in building employee engagement. Retrieved from https://blog.haygroup.com: https://blog.haygroup.com/the-role-of-rewards-in-building-employee-engagement/

Saunders, M., & Lewis, P. (2012). Doing research in business management: An essential guide to planning your project. Essex: Pearson Education Limited.

Schaufeli, W. B., & Bakker, A. B. (2004). Job demands, job resources, and their relationship with burnout and engagement: A multi-sample study. Journal of Organizational Behavior, 25, 293–315. https://doi.org/10.1002/job.248

Schaufeli, W. B., Salanova, M., & Gonza´lez-Roma´, V. (2002). The measurement of engagement and burnout and: A confirmative analytic approach. Journal of Happiness, 3, 71–92. https://doi.org/10.1023/A:1015630930326

Schlechter, A., Faught, C., & Bussin, M. (2014). Total rewards: A study of artisan attraction and retention within a South African context. South African Journal of Human Resource Management, 12(1), 1–15. https://doi.org/10.4102/sajhrm.v12i1.648

Schuler, R., & Rogovsky, N. (1998). Understanding Compensation Practice Variations across Firms: The Impact of National Culture. Journal of International Business Studies, 29(1), 159–177. https://doi.org/10.1057/palgrave.jibs.8490030

Scott, D., McMullen, T., Royal, M., & Stark, M. (2010). The impact of rewards programs on employee engagement. Retrieved from World At Work: https://www.worldatwork.org/adimLink?id=39032

Snelgar, R. J., Renard, M., & Venter, D. (2013). An empirical study if the reward preferences of South African employees. South African Journal of Human Resource Management, 11(1) 1–14. https://doi.org/10.4102/sajhrm.v11i1.351

South African Board for People Practices. (2014, October). Employee Engagement. Retrieved from http://sabpp.co.za/fact-sheet-employee-engagement-october-2014/

Stahl, G., Björkman, I., Morris, S. S., Paauwe, J., Stiles, P., & Wright, P. (2012). Six principles of effective global talent management. Sloan Management Review, 53(2), 25–42.

Steers, R., & Porter, L. (1991). Motivation and work behaviour. New York: McGraw-Hill.

Strauss, J., & Wohar, M. E. (2004). The linkage between process, wage and labour productivity: A panel study of manufacturing industries. Southern Economic Journal, 70, 920–941. https://doi.org/10.2307/4135280

von Glinow, M. A. (1985). Reward strategies for attracting, evaluating, and retaining professionals. Human Resource Management, 24, 191–206. https://doi.org/10.1002/hrm.3930240207

Wakeford, J. J. (2004). The productivity-wage relationship in South Africa: An empirical investigation. Development Southern Africa, 21(1), 109–132. https://doi.org/10.1080/0376835042000181444

Wilson, B. T. (2003). Innovative reward systems for the changing work place. New York: McGraw-Hill.

Wilson, T. B. (1995). Innovative reward systems for the changing workplace. New York: McGraw-Hill.

WorldatWork. (2010). Retrieved from https://www.worldatwork.org; WorldatWork – The Total rewards Association: https://www.worldatwork.org/adimLink?id=78737

World Bank. (2016, April 12). #African Can: Overview. Retrieved from http://www.worldbank.org/en/country/southafrica/overview

World Economic Forum. (2015). The global competitiveness report 2015–2016. Geneva: World Economic Forum.

Zikmund, W. (2003). Business research methods (7th edn.). OH: Thomson South-Western.

Zingheim, P. K., & Schuster, J. R. (1995). Moving one notch north: Executing the transition to new pay. Compensation & Benefits Review, 27(4), 33–39. https://doi.org/10.1177/088636879502700406


 

Crossref Citations

1. The development and validation of the Rewards Desirability Inventory
Janine A. Victor, Crystal Hoole
SA Journal of Human Resource Management  vol: 19  year: 2021  
doi: 10.4102/sajhrm.v19i0.1599