It’s interesting to note that people earning less than the voluntary living wage typically view their pay as unfair while those earning in excess of this regard their salary as fair. The amount of money they earn is just as important as how they earn it.

However, if you increase levels of pay and benefits it doesn’t necessarily feed through into significant benefits for the company. If you increase pay and benefits, this has only a moderate impact on job satisfaction and a weak impact on enthusiasm, effort and intentions to quit. Albeit we can assume that pay levels do play an important part in getting a person to join a company.

What are the implications of what research would suggest and the insights for how we manage people, including how we reward them?

It doesn’t mean that pay and benefits are not important, but the impact is influenced by other aspects of what makes for a good job, such as terms of employment (permanent, temporary, etc), job design and the nature of work, work-life balance, voice and representation, etc.

This means that it doesn’t matter how good your reward package is, its impact will be challenged if, for instance, employees are not satisfied with their health and well-being at work, the quality of relationships with others, or the opportunities they have in the company to speak directly to mangers, or through their communication channels and forums.

It also indicates where competitive advantage can be found. It’s not through reward and recognition polices themselves, which can be copied, but through how these policies are implemented in ways that support the other people management activity.

Similarly, the effectiveness of a company’s reward package ‘the deal’ will be enhanced if other aspects of people management, such as how jobs and work is designed, are aligned with the company’s reward philosophy, mission and vision, as well as how it puts its reward policies into practice.

In conclusion, the point of pay is that from the company perspective it is a means to an end, rather than an end in itself. It plays a part in supporting the company’s people management practices, while the company’s people management practices play a role in supporting its approach to pay.