Total rewards strategy for a multi-generational workforce in a financial institution

Abstract

Orientation: Different generations may value and perceive employee rewards differently. This impacts on reward strategies in the workplace which have been specifically developed to attract, retain and motivate staff. A one-size-fits-all approach to reward strategy may not achieve the objectives intended, leading to direct and indirect financial implications for businesses.Research purpose: This study investigated whether perceptions of reward strategy differed across generations in a large financial institution in South Africa. This context was specifically chosen due to the significant competition to attract and retain staff that exists in the financial sector. To contribute to the practical challenges of reward implementation, the study investigated whether specific reward preferences associated with generation exist, and whether offering rewards based on these preferences would successfully attract and retain staff.Motivation for study: South African businesses are competing for skilled staff and rely heavily on a total reward strategy to compensate all generations of employees. Given the financial incentives to retain and attract the most effective staff, it is essential that reward strategies meet their objectives. All factors impacting the efficacy of reward strategies should be considered, including the impact of generational differences in preference. This is of relevance not only to the financial industry, but to all companies that employ staff across a variety of generations.Research design, approach and method: A quantitative survey design was used. A total of 6316 employees from a financial firm completed a survey investigating their experiences and perceptions of reward strategies. Statistically significant differences across different generations and reward preferences were considered.Main findings: Significant differences in reward preferences were found across generational cohorts. This supports international literature.Practical/managerial implications: The results indicate that there is an opportunity for businesses and managers to link components of the total reward strategy to specific generations in the workforce by offering a wider variety of reward options to employees. Employee perceptions indicate a willingness to have reward strategies tailored to their needs and to have a greater say in their reward strategies. The challenge is in presenting the options in a fair and transparent manner, in providing choice and in tracking long-term retention and motivation based on the reward strategy.Contribution: The study found that generations value rewards differently, which will enable management to develop more strategic approaches to reward. This research extends international evidence to include workplaces in emerging economies, which have the additional challenges of high rates of unemployment, but also scarce skills and competition for skilled staff. The findings of this research go some way to support the need to develop more dynamic, flexible and generation-specific reward strategies to support staff retention and attraction.