Salary can be an important factor for employee satisfaction. It is therefore obvious, when engagement or low employee net promoter score (eNPS), thinking of a pay rise as a solution. However, this is not always possible for many organisations as many are bound by collective bargaining agreements, budgetary constraints or sector-dependent salary scales.
However, not being able to increase your employees' salaries need not always be a problem. In fact, salary is far from being the only determinant of employee satisfaction.1 In this article, we therefore discuss the role of salary in relation to employee satisfaction and the eNPS, and show how organisations - even with limited financial resources - can build engaged, inspired and productive employees in other ways.
The link between salary and eNPS
The eNPS measures how likely employees are to recommend their organisation to others. As such, it is a good indicator of employee satisfaction and engagement within your organisation. Salary, on the other hand, is a so-called hygiene factor: if it is not right, dissatisfaction arises. But once the pay is perceived as 'fair' and market-based, a higher salary has little additional effect on motivation or loyalty. Then other factors, such as work atmosphere, appreciation, autonomy and development opportunities, take over.2
When does salary play a big role?
So salary becomes important precisely when other aspects in the work environment are under pressure. Think unclear communication, lack of recognition or few development opportunities. In such a context, salary can become a kind of compensation become: employees stay not because they feel valued, but because the pay is good.3
The danger? As soon as a higher offer comes in elsewhere, they still leave. As a result, a higher salary only temporarily binds employees.
On the contrary, when does salary become less important?
In organisations where the foundations are solid, with a healthy work-life balance, a positive corporate culture and opportunities for growth, salary often takes a back seat. Employees then stay not because of their pay, but because of their sense of meaning, commitment and appreciation.4
This presents opportunities for organisations that cannot compete on salaries but do want to invest in sustainable satisfaction.
What can you do if pay rises are not an option?
Fortunately, there are many ways to increase eNPS - even without directly investing in payroll. Below are four general strategies that can make a difference:
1. Create a culture of appreciation
A culture of appreciation means that people feel seen and appreciated for their efforts and results. It goes beyond the occasional compliment: it is a structural way of working in which recognition is taken for granted. This strengthens trust, increases motivation and promotes cooperation. Leaders play an exemplary role in this by actively expressing appreciation and encouraging colleagues to do the same. This is how you build a positive and engaged working environment together. A simple 'thank you' or making achievements visible through internal channels can already do a lot. Regular recognition makes employees feel like they matter.
2. Encourage growth and development
Employees want to keep developing and use their talents. By actively encouraging growth - with training courses, coaching or challenging projects - you show that you are investing in their future. This not only increases their knowledge and skills, but also their commitment and loyalty. An organisation that makes learning and development a matter of course remains agile and attractive to talent. For example, offer training courses, coaching or challenging projects. Not every organisation can give pay rises, but investing in personal growth is often appreciated at least as much.1
3. Strengthen autonomy and trust
Give employees space to make their own choices and take responsibility. Autonomy shows that you trust their expertise and judgement. This motivates, increases ownership and stimulates creativity. By providing clear frameworks but not micromanaging, you create a working environment where people feel safe to take initiative and do their best work. Employees who experience control over their work - for instance through flexible working hours or self-organisation - feel more responsible and motivated.
4. Ensure flexibility and well-being
A healthy work culture takes work-life balance into account. Flexibility in working hours and locations helps employees better align their work with their lives. In addition, attention to well-being is essential: from mental health to physical vitality. Actively focusing on this shows that you care about your people, which reduces stress, increases satisfaction and helps reduce absenteeism. Think hybrid working, mental support or physical health initiatives. Employees who feel good, function better and stay engaged longer.
However, every organisation is different, and what works in one may not necessarily be effective in another. Doing employee survey helps determine the key drivers for employees. This gives organisations a better understanding of what employees actually care about. This helps organisations invest in the components that really matter to their employees: whether that is development, appreciation, leadership or workload.
Conclusion
Salary remains an important factor for employee satisfaction, but it is rarely the decisive reason why someone recommends their employer. A competitive salary is a good basis, but not a guarantee of high engagement. Organisations that focus on the relevant drivers such as culture, appreciation, autonomy and development can sustainably improve their eNPS.
- Jung, S., & Lee, J. (2022). Impact of financial and non-financial rewards on employee motivation. Sustainability, 14(19), 12557. ↩︎
- Judge, T. A., Piccolo, R. F., Podsakoff, N. P., Shaw, J. C., & Rich, B. L. (2010). The relationship between pay and job satisfaction: A meta-analysis of the literature. Journal of Vocational Behavior, 77(2), 157-167. ↩︎
- Narisada, A., & Schieman, S. (2022). Which job qualities compensate for unjust pay? Socius: Sociological Research for a Dynamic World, 8, 1-12. ↩︎
- Mosquera, A., Ferreira, R., & Alves, C. (2021). Intrinsic rewards and employee performance with the mediating role of motivation. Frontiers in Psychology, 12, 667387. ↩︎