Achieving Job Satisfaction through a balance of Effort-Reward
Job Satisfaction

Achieving Job Satisfaction through a balance of Effort-Reward
Key to optimising work performance

Our motivation to work is strongly linked with the benefits and rewards we receive relative to the effort we put in. Rewards can be extrinsic, such as money and recognition, or intrinsic, such as the sense of accomplishment, professionalism, and skill progression one feels when a challenging task is done well. If we do not receive the right sort of appreciation, the amount and quality of effort can decline.

So, what is the “right sort of appreciation”? In the book Payoff: The hidden Logic that shapes our motivations, Dan Ariely, a behavioural economist, suggests it is “a whole lot of stuff” that includes money, but also includes achievement, purpose, status, pride, and as he says, “all kinds of other elements.” These “other elements” are highly individual, meaning the sense of recognition/reward experienced by employees can vary greatly. Consequently, there is no universal solution to the reward side of Effort Reward Imbalance (ERI). Good managers recognise this and tailor their actions accordingly.

Ariely describes something he calls the Sisyphic Condition. Through a series of experiments, he concluded that the numbers of repetitive tasks conducted were higher if the work was meaningful compared to when it was Sisyphus (futile tasks).

As human beings we have a tendency to do mundane repetitive tasks again and again IF we are given some level of recognition and sense of achievement for the work done. If we don’t receive sufficient recognition, or even worse, the employer ignores our work or doesn’t share feedback, the motivation to do that mundane task can decrease by as much as 50%.¹

Low morale, low sense of achievement, and poor employee health compounds the issue of poor recognition even further.

To help our understanding, occupational health researchers devised a model called Effort-Reward Imbalance (ERI) to help explain how employee satisfaction and happiness can be correlated with overall health of the employees.² This was part of their own effort to identify the relationship between the workplace environment and employee health.

Achieving Job Satisfaction through a balance of Effort-Reward 

ERI was studied initially in the famous “Whitehall study”, conducted on British civil servants, where it was concluded that high effort/low reward jobs led to low job satisfaction and an increased risk of developing coronary heart disease, cancer, diabetes and several other diseases. Subsequently, it was discovered that ERI was linked to high levels of cortisol (a stress hormone) in the employees that had high effort/low reward roles.³

High levels of effort in terms of workload, responsibilities and deadlines need to be rewarded with adequate monetary benefits, recognition from management and peers, along with growth prospects and job security, otherwise an effort-reward imbalance occurs.

Most employees are willing to put in extra effort if the compensation and rewards are adequate. If companies expect employees to work overtime, but do not maintain a policy for extra compensation of any kind, the willingness to put in extra hours of work will only diminish.

It’s clear ERI encapsulates the concept of job satisfaction. Job satisfaction is defined as the “positive mental and emotional state of an employee that results from the work they do”. If employees don’t feel happy about their work due to inadequate rewards and high demand job roles their job satisfaction is at risk of being compromised.

Consider for a moment, we’re not happy with our job role, we have excessive workload, and on top of that we don’t receive the expected rewards for the extra effort we put in. Sounds like the perfect storm for higher stress. As a result, cortisol levels are likely to increase, and in the long run our immune system will be compromised leading to increased risk of “opportunistic” diseases such as CVD, diabetes, cancer, many other health issues.

On the other hand, if the company provides adequate reward and appreciation, job satisfaction and employee health is very likely to improve leading to increased productivity. According to a study by Alex Edmans, a professor of Finance at London Business School, companies with high job satisfaction outperform their peers by 84-184% in the long run. That’s a substantial win-win for executives/managers and employees alike to maintain a balanced effort-reward system for the company to increase overall job satisfaction.

By understanding the importance of ERI and its role in the satisfaction of employees, employers can provide adequate monetary and non-monetary benefits to keep their staff happy and motivated.

SHAPE takes a comprehensive look at ERI in the Job Satisfaction Explorer and further links it to mental health, commitment, engagement and other factors that can combine to improve overall performance.

¹ Ariely, Dan. Payoff: The Hidden Logic That Shapes Our Motivations. Simon & Schuster, 2016.

² Vegchel, Natasja Van, et al. Social Science & Medicine, vol. 60, no. 5, 2005, pp. 1117–1131., doi:10.1016/j.socscimed.2004.06.043.

³ Ferrie, J E. Journal of Epidemiology & Community Health, vol. 56, no. 12, 2002, pp. 922–926., doi:10.1136/jech.56.12.922.

Edmans, Alex. SSRN Electronic Journal, 2012, doi:10.2139/ssrn.2054066.

Job Satisfaction