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.
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.
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.
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).
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.
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.
This study adds to the body of social science research, providing a deeper understanding of reward preferences, specifically in the context-specific setting.
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,
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,
According to Boyd and Salamin (
A report by the South African Board for People Practices (
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,
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 (
According to McKinsey (
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 (
Snelgar, Renard and Venter (
Perrow (
Research by Nienaber, Bussin and Henn (
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 (
Current economic growth in South Africa is slow (World Bank,
The following research questions were investigated in this study:
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.
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,
According to Bamberger and Levi (
In the ever-changing work environment, Snelgar et al. (
According to Perrow (
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. (
Studies by Bloom and Michael (
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 (
According to Wilson (
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,
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,
According to Schaufeli, Salanova and Gonza´lez-Roma´ (
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 (
According to Cropanzo and Mitchell (
Coffman and Gonzalez-Molina (
Schuler and Rogovsky (
A study by Schlechter, Faught and Bussin (
Considering the needs of different generations, the study by Masibigiri and Nienaber (
Chiang and Birtch (
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.
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,
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.
The Rewards Preferences Questionnaire (Nienaber & Bussin
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,
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.
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.
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,
The survey was completed by 131 participants.
Total reward preference comparisons by all demographics.
Total rewards element | Reward component | Gender | Age group | Ethnicity | Education level | Number of children | Job role | Job level | Media division |
---|---|---|---|---|---|---|---|---|---|
Base pay | 0.660 | 0.062 | 0.508 | 0.108 | 0.900 | ||||
Incentives & bonuses | 0.384 | 0.287 | 0.242 | 0.287 | 0.362 | 0.734 | 0.433 | 0.250 | |
Merit | 0.197 | 0.658 | 0.520 | 0.343 | 0.139 | 0.105 | 0.879 | 0.425 | |
Market-related salary | 0.707 | 0.454 | 0.331 | 0.298 | 0.087 | 0.714 | 0.280 | 0.989 | |
Remuneration structure | 0.802 | 0.662 | 0.223 | 0.535 | 0.343 | 0.163 | 0.090 | ||
Income Inflation | 0.556 | 0.768 | 0.086 | 0.221 | 0.348 | 0.583 | 0.718 | ||
Bonus linked to personal performance | 0.600 | 0.781 | 0.686 | 0.903 | 0.852 | 0.330 | 0.421 | 0.182 | |
Medical | 0.627 | 0.432 | 0.627 | 0.520 | 0.090 | 0.296 | 0.058 | ||
Retirement | 0.445 | 0.445 | 0.984 | 0.268 | 0.748 | ||||
Study leave | 0.290 | 0.518 | 0.071 | 0.648 | |||||
Sabbatical leave | 0.090 | 0.846 | 0.134 | 0.109 | 0.412 | ||||
Children’s education subsidy | 0.248 | 0.399 | 0.399 | 0.081 | 0.207 | 0.072 | 0.359 | ||
Financial assistance for a house | 0.176 | 0.666 | 0.894 | 0.321 | 0.515 | 0.111 | 0.249 | ||
Subsidised care for dependents | 0.449 | 0.335 | 0.628 | 0.392 | 0.787 | 0.531 | |||
Parking bay | 0.603 | 0.563 | 0.268 | 0.563 | 0.862 | 0.215 | 0.616 | ||
Good working relationship | 0.345 | 0.791 | 0.446 | 0.791 | 0.625 | ||||
Office environment | 0.372 | 0.650 | 0.967 | 0.650 | 0.931 | 0.111 | |||
On-site fitness centre | 0.459 | 0.168 | 0.168 | 0.824 | 0.063 | 0.222 | 0.262 | ||
On-site medical centre | 0.183 | 0.627 | 0.056 | 0.081 | 0.434 | 0.398 | 0.908 | ||
On-site childcare facilities | 0.062 | 0.498 | 0.041 | 0.498 | 0.125 | 0.307 | 0.644 | ||
On-site staff restaurant | 0.459 | 0.384 | 0.712 | 0.384 | 0.701 | 0.063 | 0.266 | 0.665 | |
On-site convenience store | 0.673 | 0.701 | 0.410 | 0.701 | 0.683 | 0.092 | 0.501 | 0.509 | |
Working flexible hours | 0.067 | 0.565 | 0.912 | 0.565 | 0.114 | 0.065 | 0.995 | ||
Quality of co-workers in the team | 0.377 | 0.604 | 0.393 | 0.604 | 0.964 | 0.454 | 0.120 | ||
Safety and security in the workplace | 0.406 | 0.794 | 0.630 | 0.794 | 0.362 | 0.059 | 0.058 | 0.748 | |
Children holiday programme | 0.425 | 0.358 | 0.453 | 0.372 | 0.080 | 0.424 | |||
Log into employer’s network | 0.761 | 0.542 | 0.629 | 0.915 | 0.368 | 0.059 | 0.244 | 0.229 | |
Return to work after maternity leave | 0.532 | 0.134 | 0.885 | 0.059 | 0.342 | 0.646 | 0.859 | ||
Learning and development | 0.131 | 0.810 | 0.061 | 0.072 | |||||
Funding for tertiary education | 0.686 | 0.286 | 0.286 | 0.740 | 0.583 | ||||
Job rotation | 0.161 | 0.138 | 0.138 | 0.868 | 0.757 | 0.083 | 0.239 | ||
Career path planning and interests | 0.765 | 0.324 | 0.213 | 0.097 | 0.190 | ||||
International secondment | 0.194 | 0.125 | 0.236 | 0.751 | 0.497 | 0.732 | 0.691 | ||
Feedback and performance | 0.217 | 0.217 | 0.462 | 0.099 | 0.484 | 0.975 | |||
Balanced scorecard | 0.122 | 0.937 | 0.937 | 0.783 | 0.057 | 0.929 | 0.132 | ||
Formal recognition | 0.306 | 0.737 | 0.737 | 0.273 | 0.734 | 0.691 | 0.725 | ||
Informal recognition | 0.074 | 0.362 | 0.324 | 0.362 | 0.343 | ||||
Monthly communication sessions | 0.087 | 0.380 | 0.380 | 0.312 | 0.661 | 0.332 | |||
Total control over work | 0.796 | 0.419 | 0.739 | 0.802 | 0.509 | 0.145 | 0.111 | 0.258 | |
Challenging job | 0.853 | 0.069 | 0.590 | 0.362 | 0.364 | 0.287 | 0.184 | ||
Accountable jobs | 0.654 | 0.411 | 0.123 | 0.575 | 0.217 | 0.753 | 0.455 | ||
Management and team performance | 0.737 | 0.238 | 0.598 | 0.866 | 0.485 | 0.132 | 0.292 | 0.193 |
Note: Significant differences in reward preferences is shown in bold.
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.
When the data were analysed by age groups, six reward components revealed statistically significant results as presented in
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.
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
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.
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.
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.
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.
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.
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.
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.
The majority of participants (68.7%,
Ranking of factors which promote employee attraction.
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% (
Ranking of factors which promote employee retention.
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% (
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 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.
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. (
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. (
The results also differ from the study by Bhengu and Bussin. (
Overall, the results from the study, and as discussed above, support the findings from the study by Schlechter et al. (
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.
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,
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 (
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. (
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, (
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.
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.
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.
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.
The authors declare that they have no financial or personal relationships that may have inappropriately influenced them in writing this article.
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.