Monetary rewards are a significant motivator and may also contribute to the sense of purpose employees feel. Rewards based on the entire organisation’s performance are considerably gaining ground. In addition, successful companies also reward their employees more.
At the start of this year, Mandatum commissioned a reward survey that aimed to identify both the supplementary reward models in use by Finnish companies and personnel’s and management’s views on how motivating and effective these models are. Mandatum’s previous reward survey was conducted at the start of 2020, right before the pandemic broke out in Finland. These exceptional times have not reduced the need for employee compensation and rewards.
The latest survey results show that monetary compensation is still the most important motivating factor. Employees find reward schemes clearly more motivating than company executives estimate. One new finding is that successful companies also reward their employees more. In industries where competition for employees is tough, a winning reward model that is perceived as fair can offer a decisive competitive edge.
Taking part in the survey were 325 business executives and 1,000 personnel representatives from the fields of industry, technology, services, trade and construction.
“The responses show that companies are very actively developing their reward schemes right now. Various forms of compensation and rewards, such as personnel funds, have become a major trend,” says the Director of Mandatum’s Reward Services, Kiisa Hulkko-Nyman.
Employees want clarity, transparency and realistic targets
Most of the respondents considered it a good thing that employees are rewarded for a job well done. A reward scheme works best if the measurable factors are clear and in balance with the company and the job description. When an employee has a genuine opportunity to influence the achievement of targets through their own work, the reward has meaning. When that happens, the reward scheme that has been built works from both perspectives.
Employee reward schemes are often tied to the entire organisation’s performance (73%) and to individual performance (51%). According to the survey, rewards based on the entire organisation’s performance are considerably gaining ground (2020: 53%).
“Corporate social responsibility is nowadays more prominent in the criteria for compensation and rewards. Sustainability indicators have become increasingly common in management’s rewards,” Hulkko-Nyman points out.
Of the companies that responded to the survey, 43% had linked a sustainability indicator to personnel’s supplementary rewards, and 40% to management’s supplementary rewards. The most commonly used indicators were related to employee well-being or commitment, customer satisfaction and occupational safety.
A large proportion of the responding companies had plans to develop their reward scheme. The companies planned, e.g. to expand their reward scheme to cover all personnel, to develop more relevant reward and compensation indicators and to include other forms of remuneration, such as employee benefits.
The survey results also indicated that personnel would like to see more open communication and transparency in the reward scheme. Personnel clearly have a weaker experience of communication on the reward schemes and the basis for rewards than employers. If the employees do not know the basis for determining rewards and compensation, the rewards also will not motivate them or positively influence the employer image.
More information about the survey:
Mandatum’s survey was carried out by Innolink. Taking part in the survey were 325 business executives and 1,000 personnel representatives. The responses from companies were collected in phone interviews and an online questionnaire in January and February 2022, and employees were surveyed during a panel survey conducted in January 2022.
Further information:
Kiisa Hulkko-Nyman, Business Director, Reward Services kiisa.hulkko-nyman@mandatumlife.fi, tel. +358 50 337 5482
Niina Riihelä, Vice President, Marketing and Communications, niina.riihela@mandatumlife.fi, tel. +358 40 728 1548