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Pay & perks drive satisfaction, but HR perceives differently

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in Compensation and Benefits,Employee Benefits Program,HR Management,Human Resources,Leaders & Managers,Leadership Skills,Management Training

What's the most important factor in an employee's job satisfaction? A new study says HR professionals and employees have completely divergent answers to that question.

While employees cite compensation and benefits as the top factors, HR professionals predict that "relational" aspects would hold employees' highest priorities, according to the Society for Human Resource Management's 2006 Job Satisfaction Survey report.

The survey, which polled more than 500 HR professionals and 600 U.S. workers, asked respondents to rate the importance of 21 various aspects of job satisfaction from "very important" to "very unimportant."

Employees' top five satisfaction factors:

  1. Compensation.
  2. Benefits.
  3. Job security.
  4. Work/life balance.
  5. Feeling safe in the workplace.

HR professionals' perception of most important employee job satisfaction factors:

  1. Employee relationship to his/her immediate supervisor.
  2. Management's recognition of employee job performance.
  3. Benefits.
  4. Communication between employee and management.
  5. Compensation.

So, why do HR professionals underestimate the importance of compensation and benefits? The problem, in fact, may be that HR professionals overestimate how important employees' relationships with their supervisors are to their overall satisfaction.

That may occur because, when employees decide to leave an organization, they frequently cite poor relationships with supervisors as the reason.

"HR professionals typically hear more complaints about relationships, communication and recognition (or lack thereof), which may lead them to believe these issues are more important to employees than they really are," said Evren Esen, author of the SHRM report.

Bad managers may be a key reason why employees leave, but a good comp and benefits package is a key reason why they stay. In fact, eight of 10 employee respondents to the survey said that they're satisfied in their current jobs.

Bottom line: Make sure you provide employees with a personalized total compensation statement each year that highlights their "hidden" compensation and benefit rewards, from paid leave to life insurance.

Take note, however, that high compensation isn't enough to differentiate a company as an employer of choice. As the labor market tightens, you may need to increase communication about your positive work environment, corporate culture and appreciation for good performance.  

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