Engagement survey research often seeks to isolate “key drivers” of engagement (based on statistical analysis) to illuminate a narrow set of survey items that will most promote engagement. When engagement drivers are derived using key driver analysis, compensation items very rarely manifest as drivers of engagement. This has been and continues to be a widespread finding. These repeated results have led to views that “compensation” is not a powerful trigger for building a highly engaged workforce and has perpetuated a view that compensation should not be a priority when attempting to achieve a highly engaged workforce. Instead, other factors like relationship health with supervisors/managers, teamwork, growth and development, confidence in senior leadership are more commonly cited as engagement drivers.
Using Saint Luke’s Health System’s (SLHS) 2016 employee survey data, we embarked on a groundbreaking study to reconsider the relationship between compensation and engagement in a new way —and our findings show that compensation is far more important than typically noted. First, using the typical “key driver analysis” approach, we determined that five survey items powerfully impact engagement at SLHS. These include items about professional growth/development opportunities, role clarity, understanding how senior leaders’ actions translate to competitive advantages, knowing how daily work supports SLHS's mission, and being confident the quality of care SLHS offers. Compensation was determined to exerted virtually no impact on engagement at all—the typical finding from key driver analysis.
Next, using a more sophisticated technique (moderation modeling) we explored how items that were determined not to drive engagement, may be interacting with SLHS's drivers of engagement. The results of this analysis revealed that while compensation is not a direct driver of engagement, it has a moderating effect—powerfully enriching engagement indirectly by directly influencing its key drivers—this relationship can not be observed through a traditional key driver analysis. This means when employees view compensation favorably, it enables them to also feel more favorably toward key drivers of engagement—optimizing the pathway to building high engagement. Conversely, when employees are unfavorable about compensation, it impedes positivity toward engagement drivers and restricts engagement from accelerating.
This emerging research does not mean that typical drivers of engagement we commonly see (e.g., relationships with supervisors/managers, teamwork, career growth, etc.,) are no longer the most important pathways to building engagement. However, it does thrust compensation into an incredibly important position, until now, not widely recognized—it shifts us away from the typical view of compensation as a less important factor in building engagement to compensation as a foundational and initial trigger enabling engagement to be built more efficiently and powerfully than previously thought. Building upon these findings, we describe the many steps that SLHS is currently pursuing to build favorable views toward compensation. We also describe the return on investment—showing statistically how more favorable views toward compensation trigger more favorable views on drivers of engagement, and how much engagement movement will be achieved within this sequence of events—with improvement in compensation views being the initial triggering mechanism.