Academic journal article SA Journal of Industrial Psychology

The Impact of a Total Reward System of Work Engagement

Academic journal article SA Journal of Industrial Psychology

The Impact of a Total Reward System of Work Engagement

Article excerpt

Introduction

Work engagement has become a critical aspect of study not only for individuals in the academic field but also for research practitioners and top management within organisations (Hewitt, 2015; May, Gilson & Harter, 2004; Schaufeli & Bakker, 2004; Sonnetag, 2011; Strümpfer, 2003; Werner, Stanz, Visagie & Wait, 2011). Engagement is a complex and multidimensional issue that affects various stakeholders and organisational outcomes.

The positive relationship between engagement and organisational outcomes such as increased performance, organisational effectiveness, customer satisfaction, employee satisfaction, productivity and reduced staff turnover has been widely reported (Evenson, 2014; Harter, Schmidt, Killan & Agrawal, 2009; Hicks, O'Reilly & Bahr, 2014; Schaufeli, 2013). According to Wrzesniewski, McCauley, Rozin and Schwartz (1997), individuals spend more than a third of their lives in their work. Engaged employees are willing to involve themselves in their work entirely and employ emotional, intellectual and physical resources to achieve and complete their work tasks (Kahn, 1990). Work engagement is further characterised by an employee's level of vigour, effectiveness and participation in his or her work-role (Schaufeli & Bakker, 2004). Considering the importance of engagement from an organisational and individual point of view, it is clear that serious fluctuations in engagement levels can potentially have serious consequences for business outcomes as has been observed in several studies (Gallup, 2013; Haid & Sims, 2009; Rothmann, 2015a).

Research has shown that engagement levels worldwide are at critical levels (Hewitt, 2013; Gallup, 2013; Hay Group, 2013; Mindset Management Programs, 2014). In South Africa, the picture is equally dismal. The latest statistics have revealed that more than 80% of employees feel disconnected, 43% consider quitting their jobs and, according to Gallup Consulting, South African employees are amongst the most disengaged employees in the world (Rothmann, 2015b).

In the current economic context, it is therefore of utmost importance for organisations to find ways to motivate employees and boost their levels of engagement. In recent years, organisations have shifted their attention to total reward packages as a means of motivating employees and raising engagement levels (Giancola, 2007; HayGroup, 2015; Nienaber, 2010). The HayGroup (2015) views engagement as an exchange relationship. In exchange for extra effort and hard work, working longer hours, employees want to feel appreciated and valued. In other words, they want to see a direct correlation between what they put into the organisation and what they receive from it. It has become evident that traditional reward systems are no longer sufficient, as individuals no longer want to be rewarded for their work alone, but for the value that they add to the organisation (HayGroup, 2015; Zingheim & Schuster, 2008). This has resulted in a move away from previous focus areas looking at either extrinsic (Allen & Helms, 2001; Heneman & Coyne, 2007) or intrinsic rewards (Jacobs, Renard & Snelgar, 2014; Tsui & Wu, 2005) to a total reward approach, including an array of other factors seen as rewards (Hewitt, 2015; Nienaber, 2010; WorldatWork, 2010a).

Total rewards can be described as the sum of the values of each element of an employee's reward package and may include everything that employees view as important and of value within their jobs (Bussin & Van Rooy, 2014; Fernandes, 1998; Nienaber, 2010; WorldatWork, 2006). Reilly and Brown (2008) defined total rewards in terms of the value proposition the business has to offer to the employee:

a firm's entire employee value proposition, including direct and indirect financial rewards, positive characteristics of the work itself, career opportunities in the firm, social activities associated with the workplace, and a variety of other conveniences and services provided by the employer. …

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