Reward preferences of knowledge workers in technology firms and their influence on attraction, retention and motivation

Abstract

Orientation: In the global war for talent, companies competing in the new knowledge economy face global shortages of their most precious resource – human capital in the form of knowledge workers. In organisations that are at the forefront of the information age, such as information technology (IT) firms, the competitive advantage comes from the intangible value of the knowledge residing within pools of highly skilled employees. It is imperative to be able to attract, retain, and motivate these scarce resources. Research purpose: The purpose of this study was to deepen understanding of the reward preferences of IT knowledge workers in South Africa, specifically as these relate to attraction, retention, and motivation of knowledge workers. Motivation for the study: The world of work is evolving, and the nature of relationships between knowledge workers and their employers has changed distinctly, leading to a change in the type of the rewards they prefer. The nature of these preferences in the local, industry-specific context is poorly understood. With technology increasingly changing the way we work, the workplace is also irrevocably changing. Combined with the demanding nature of the company’s most valuable people, the shifting workplace paradigm gives rise to knowledge workers valuing different rewards than before. Research design approach and method: The research was a quantitative, empirical, and descriptive study of reward preferences, measured in a self-administered survey and analysed using non-parametric tests for variance between dependent and independent groups, internal consistency testing, and non-parametric analysis of variance (ANOVA). Main findings: This study identifies the most important reward components in the competition for knowledge workers. It further found that reward preferences differ for attracting IT knowledge workers to a company, for retaining them, and for motivating and engaging them in their jobs. Managerial implications: The study’s findings show that a holistic approach to total rewards is required, failing which, companies will find themselves facing increased turnover and job-hopping. Importantly the study also highlights that different rewards need to form part of knowledge workers’ relationship with their employer in three different scenarios — attraction, retention, and motivation. Contribution: This study suggests a competitive rewards model that builds on the study’s findings and on previous theory, to illustrate the most pertinent reward preferences that should be considered in a holistic total rewards package for South African IT knowledge workers.