Academic journal article SA Journal of Human Resource Management

Total Rewards Strategy for a Multi-Generational Workforce in a Financial Institution

Academic journal article SA Journal of Human Resource Management

Total Rewards Strategy for a Multi-Generational Workforce in a Financial Institution

Article excerpt

Introduction

Problem statement

Key focus

In the South African workplace, organisations are not merely competing against traditional competitors in the war for talent, but also against other high-skill workplaces, a labour market with very low numbers of high-skill and medium-skill people, high levels of mobility amongst the workforce and fewer skills entering the workforce (Bussin & Moore, 2012). The most explicit means to attract and retain staff, the reward strategy, has traditionally been thought of as linear: the greater the reward offered, the more likely the workplace is to attract the individual. This does not, however, take into account the complexity of the nature of the reward or the individual. Rewards can be multifaceted and both financial and non-financial. Many features of reward strategies have not been incorporated into a total reward strategy (Hayes, 1999; Irvine, 2010). In addition, individuals have different sets of values and motivations. One influencing factor that has received prominence in international literature is the effect of the values of different generations in terms of what motivates them from a reward perspective. The argument is that employees from different generations have different needs and perceptions of what constitutes value in reward. The question is whether this trend is evident in an emerging economy, where there are high levels of skills shortages but also high levels of unemployment.

Background

The South African financial sector's workforce is 91% skilled and highly skilled; half are under the age of 35 years and 9% above age 50. The sector faces a decline in workforce at the lower skills levels and high competition for skilled employees (BankSETA, 2010). A survey by Landelahni (2010) Financial Services found that the challenges in attracting and retaining staff for the financial sector include a slow recovery for the sector, a shortage of key staff locally and globally and greater mobility of staff. These problems will not be solved in the short term and strategies are needed to increase skills and training and to better manage talent.

Sector skills plans and human resource plans tend to focus on developing skills in school leavers and in existing staff. Scant attention has been paid to other human resource strategies such as reward strategies in creating an attractive work environment. This research contributes to the literature on retaining and attracting skilled staff by using human resource strategies already in place, but finding ways to improve their efficacy.

South Africa is an emerging economy facing the international development challenges of, amongst others, high unemployment and a vast skills deficit (BankSETA, 2010; Horwitz, Bowmaker-Falconer & Searll, 1996). The challenge for business in this environment is to attract and retain capable, high-quality employees.

Research purpose

International research advocates for reward strategies that are tailored to specific generational cohorts. This research set out to determine whether this trend is applicable and relevant in South Africa, where there are high levels of skills shortages but also high levels of unemployment. To assess the relevance of using generational preferences in reward strategy to attract and retain staff, the research also investigated whether generational preferences towards reward exist in the financial sector in South Africa.

Trends from research literature

The idea that values and preferences in the workplace differ across generations has been presented for over a decade (Codrington, 2008; Deal, Stawiski, Graves, Gentry & Ruderman, 2013; Lyons, 2003), as has the view that workplaces should develop relevant reward and retention strategies to suit multiple needs. Reward systems that assist employees to determine and achieve their immediate career objectives are not straightforward (Armstrong & Murlis, 2007; Cummings & Worley, 2001). …

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