104 TOTAL REWARDS FOR TECHNICAL WORKERS

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examined the degree to which the practices were more effective in high tech firms than in low (shown in columns labelled “Effectiveness”). In the columns, “yes” indicates that the study found the practice more prevalent or more effective in high technology firms, “no” indicates no significant difference, and “-“ indicates the practice was not included in the study. These studies suggest several conclusions. R&D workers do not value pay as highly as do other workers. R&D workers prefer most of their pay to be fixed, but believe that some should be in the form of individual and team incentives. In firms for which R&D is of high strategic importance, risk sharing and an emphasis upon personal capabilities are the two pay practices most consistently found to be related to firm performance. Discretion for managers, individual incentives and long term orientation also receive some support. These results support the proposition that R&D workers should be compensated differently to achieve worker satisfaction and firm performance. Benefits Only two papers have empirical data on the role of benefits. O’Neal (1998) reports that, for workers in general, benefits rank just after pay in the order of reward importance. Kochanski and Ledford (2001) found Benefits ranked behind Work Environment and tied with Pay and Learning and Development in ratings of reward importance. This suggests that Benefits should be receiving more empirical attention than has hitherto been the case. Conclusions from the Literature Review This review of the empirical research on reward importance and practices in R&D shows the literature to be rather thin, but it does suggest a number of conclusions and directions for future work. The following seem warranted. 1. All four rewards categories are important to R&D workers and should be systematically included in rewards programs for them, and a Total rewards framework is a promising approach to doing so. This is shown in Table 2 which summarizes the studies which compared more than one reward category. It is also seen in the studies looking at only one reward at a time. R&D workers consistently rated all categories of rewards to be important. However, there is a paucity of research that includes all four categories in the same study. Such research is necessary if the rewards are to be systematically compared and the complete employee value proposition for R&D workers is to be understood. The relationships of these different rewards to organizational performance should be explored empirically, as has been done for pay. 2. Work environment is more important to R&D workers than it is for most other workers and accordingly should be given more emphasis in rewards management programs for them. Medcof_ASAC2005 111
In the comparative empirical studies summarized in Table 2 Work Environment is consistently rated as the most important reward category for R&D workers. Although it can be argued that this may not indicate that Work Environment is ultimately more important than competitive Pay and Benefits, it surely indicates the high importance of Work Environment. The Job Characteristics Model (Hackman and Oldham, 1980) focuses upon the work itself, one important component of the Work Environment. That model proposes that workers with high growth need strength respond better to enriched jobs than do workers with low growth need strength. Hackman and Oldham’s data show that “Professional or Technical” workers have a very high growth need strength compared to most of the other job categories they studied. This is consistent with the studies reviewed above showing that intrinsic rewards from the job itself are very important to R&D workers, more important than they are to most other categories of workers. 3. Work Environment should not be treated as a single reward category for R&D workers but should be divided into several rewards which are treated separately in Total Rewards programs. For example, quality and importance of the work itself, quality of relationships with coworkers and recognition of work accomplishments have been found to be separately important to R&D workers. Given the overall importance of the Work environment category and the empirically demonstrated importance of these sub-categories, their individual importance should be acknowledged, included in Total Rewards plans, and articulated to R&D workers. 4. Pay is an important category of rewards for R&D workers and should be prominently included in Total Rewards programs for them. Despite the results shown in Table 2, Pay practices have an important effect upon organizational performance, as shown in Table 3. However, overestimation of the importance of Pay is a temptation to be avoided. Research shows that Pay practices for R&D workers are, and should be, different from those for others. Risk sharing, person emphasis, aggregate incentives, discretion, individual incentives and long term orientation are practices that work in R&D. Evidence on others is mixed and more research is needed. 5. Organizational circumstances can have a significant effect upon the effectiveness of Total Rewards programs. There is a number of situational variables that can affect Total Rewards and the growth and evolution of high technology firms provides a good example. When Microsoft was young the value of its stock rose at a phenomenal rate over a number of years. During that period the lure of company stock and the huge amount of money it could bring could easily overshadow the effect that any other rewards might have upon employees. Now that Microsoft is large and has a more stable stock value the monetary gains available through stock options are no longer as spectacular Medcof_ASAC2005 112
Page 1 and 2: ASAC 2005, Toronto, Canada John W.
Page 3 and 4: Proponents of Total Rewards have pa
Page 5 and 6: leave R&D for other parts of the fi
Page 7: person rather than by the job. Pay
Page 11 and 12: Rewards does not mention these cons
Page 13 and 14: Diaz, M.D.S. and Gomez-Mejia, L.R.

104 TOTAL REWARDS FOR TECHNICAL WORKERS

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