Compensation Doesn’t Drive Employee Engagement

As part of our recent consumer benchmark, we examined a number of attitudes and behaviors of more than 5,000 U.S. employees. One of the things we analyzed is what makes people want to do something good for their company even if it’s not expected of them.

To understand this dynamic, we looked at seven attitudes employees have towards their employers. It turns out that compensation is not the strongest driver of this behavior and it may even be one of the weakest. Instead of trying to gain employees’ engagement solely with pay increases, leaders should look at sharing the gift of intrinsic rewards. As you can see in the figure below:

  • Employees who periodically receive unexpected rewards are the most likely to do something good and unexpected for their employer.
  • Employees who don’t think they are contributing to the success of the company are the least likely to do something good and unexpected for their employer. Employees who feel like they are contributing are 39 points more likely to do something good (the largest gap).
  • Employees who believe that they are compensated fairly are only eight points more likely to do something good than those who do not (the smallest gap).

DoSomethingGoodThe bottom line: Don’t rely on compensation to motivate employees

Written by 

I am a customer experience transformist, helping large organizations improve business results by changing how they deal with customers. As part of this focus, I examine strategy, culture, interaction design, customer service, branding and leadership practices. I am also a fanatical student of business, so this blog provides an outlet for sharing insights from my ongoing educational journey. Simply put, I am passionate about spotting emerging best practices and helping companies master them. And, as many people know, I love to speak about these topics in almost any forum. My “title” is Managing Partner of the Temkin Group, a customer experience research and consulting firm that helps organizations become more customer-centric. Our goal is simple: accelerate the path to delighting customers. I am also the co-founder and Emeritus Chair of the Customer Experience Professionals Association (, a non-profit organization dedicated to the success of CX professionals.

2 thoughts on “Compensation Doesn’t Drive Employee Engagement”

  1. Hi Bruce – Very interesting research!! Thank you for sharing this with us. Will you review the graphic with the results and let me know if the subtitle should say “Employees who are likely…” and not “Consumers who are likely…”. To me, it makes more sense if it’s Employees so I’m just asking for clarification. Thank you!

    1. Hi Jodie: The graphic is about employees. The subtitle accurately describes the data as being about consumers, because the base is made up of “consumers who are employed.” Having said that, it would have been cleaner to say “employees” in the subtitle. Thanks for the feedback!

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