Orientation- Competition for scarce human capital have emphasised the need for
organisations to develop effective attraction strategies that entice knowledge workers
(employees with scarce skills). Consequently, it is important for organisations to
understand which elements of the Total Reward Model are perceived as attractive
rewards or inducements for knowledge workers to ensure that their attraction
strategies are aligned with the rewards that are valued and preferred by knowledge
workers.
Research Purpose- The aim of the present study was to investigate a set of chosen
financial reward elements (remuneration, employee benefits and variable pay) to
determine whether knowledge workers would perceive them as attractive inducements
when considering a job position.
Motivation for the Study- Financial rewards such as remuneration have traditionally
been a defining feature of an employment relationship. In order to attract knowledge
workers and maintain a competitive advantage, it is necessary for organisations to
understand whether knowledge workers are attracted to different types and levels of
financial rewards. This is applicable in South Africa where the shortage of talent is a
largely due to the exodus of scarce skills (human capital) as there are often more
lucrative opportunities overseas. Therefore attractive financial rewards or
inducements are needed to attract talent in South Africa.
Research Design- The study followed a quantitative research approach and a 23
fullfactorial
experimental design (field experiment) was used. There were three
independent variables, namely remuneration, employee benefits and variable pay
(financial reward elements). The dependent variable was perceived job attractiveness.
The three financial reward elements were manipulated and attached to a job position.
This resulted in eight different versions of a job advertisement which were used as a
stimulus to determine the effect of financial rewards on perceived job attractiveness.
A single questionnaire was used to measure participants? perceived attractiveness of
the job. The programme Qualtrics was used to randomly assign participants to each
experimental group and to ensure that each group consisted of a similar number of
2
participants. A convenience sampling approach was used to distribute the
advertisements and questionnaire to different organisations throughout South Africa,
as well as corporate members of the South African Reward Association (n= 169).
Data was analysed using descriptive statistics and factorial ANOVA.
Main Findings- The results showed that participants considered high levels of
remuneration (remuneration above the 75th percentile of the market) to be statistically
significantly more attractive than lower levels of remuneration (remuneration at or
below the 50th percentile of the market). Similarly, having benefits as part of a reward
package (where the employer contributes 100% of total retirement fund contribution
plus highest level of medical cover) was perceived as statistically significantly more
attractive than having no benefits, and variable pay present as a reward package (13th
cheque as well as a performance bonus and share options) was statistically
significantly more attractive than having no variable pay.
The results of the ANOVA revealed that all three financial reward elements of the
Total Reward Model had statistically significant main effects on job attractiveness. In
contrast, gender, race and age did not have statistically significant main effects on job
attractiveness.
Practical Implications- The use of an experimental design verified that financial
reward elements, including high levels of remuneration and providing benefits and
variable pay as a reward are attractive to knowledge workers. Therefore, organisations
should incorporate the proposed types and levels of financial rewards into their
attraction strategies.
Theoretical Contribution- Using an experimental approach adds to the body of
social science research as no prior studies have identified the attractiveness of
financial reward elements in a controlled environment. There is also limited empirical
research in South Africa which highlights the level and combinations of financial
reward elements that are attractive for talented employees.