THE IMPORTANCE OF PAY IN EMPLOYEE MOTIVATION: DISCREPANCIES BETWEEN WHAT PEOPLE SAY AND WHAT THEY DO
Sara L. Rynes, Barry Gerhart, and Kathleen A. Minette
A majority of human resources professionals appear to believe that employees are likely to overreport the importance of pay in employee surveys. However, research suggests the opposite is actually true. We review evidence showing the discrepancies between what people say and do with respect to pay. We then discuss why pay is likely to be such an important general motivator, as well as a variety of reasons why managers might underestimate its importance. We note that pay is not equally important in all situations or to all individuals, and identify circumstances under which pay is likely to be more (or less) important to employees. We close with recommendations for implementing research findings with respect to pay and suggestions for evaluating pay systems. © 2004 Wiley Periodicals, Inc.
It is easy to overestimate the frequency with which adults actually go to the opera and underestimate the frequency with which they watch TV cartoons on Saturday mornings, based on their self-reports. (Nunnally & Bernstein, 1994, p. 383)
Rynes, Colbert, and Brown (2002) presented the following statement to 959 members of the Society for Human Resource Management (SHRM): “Surveys that directly ask employees how important pay is to them are likely to overestimate pay’s true importance in actual decisions” (p. 158). If our interpretation (and that of Rynes et al.) of the research literature is accurate, then the correct true-false answer to the above statement is “false.” In other words, people are
more likely to underreport than to overreport the importance of pay as a motivational factor in most situations. Put another way, research suggests that pay is much more important in people’s actual choices and behaviors than it is in their self-reports of what motivates them, much like the cartoon viewers mentioned in the quote above. Yet, only 35% of the respondents in the Rynes et al. study answered in a way consistent with research findings (i.e., chose “false”). Our objective in this article is to show that employee surveys regarding the importance of various factors in motivation generally produce results that are inconsistent with studies of actual employee behavior. In particular, we focus on well-documented findings that employees tend to say that pay
Correspondence to: Sara L. Rynes, Tippie College of Business, 108 PBB, University of Iowa, Iowa City, IA 52242-1000, tel. 319-335-0838, Sara-Rynes@uiowa.edu Human Resource Management, Winter 2004, Vol. 43, No. 4, Pp. 381–394 © 2004 Wiley Periodicals, Inc. Published online in Wiley InterScience (www.interscience.wiley.com). DOI: 10.1002/hrm.20031
HUMAN RESOURCE MANAGEMENT, Winter 2004
In general, there appears to be a consistent (but incorrect) message to practitioners that pay is not a very effective motivator—a message that, if believed, could cause practitioners to seriously underestimate the motivational potential of a well-designed compensation system.
is less important to them than it actually is. This is an important point because if employees’ reports are taken at face value, HR professionals are likely to seriously underestimate the motivational potential of pay. Moreover, a quick survey of the journals or magazines that are most often read by practitioners (in particular, HR Magazine for HR professionals and Harvard Business Review for general managers) suggests that they, too, tend to take employee surveys at face value without carefully examining the behavioral evidence related to pay and motivation. In the section that follows, we first present evidence demonstrating the gap between what people say and what they do with respect to pay. We then show that practitioner journals present claims about pay importance that are inconsistent with research about the actual motivational effects of pay....
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