2 in 3 Flemish employees in favour of pay increases based on their performance

Results of the extensive study on remuneration by Vlerick Business School and vacature.com

Key conclusions
  • The satisfaction with the total reward package leaves room for improvement - employees are specifically dissatisfied with the way in which salary increases and bonuses are determined
  • Although a minority of employees have a mobility budget, such a budget appears to have a rather large impact on reward satisfaction.
  • If employees were given the choice when it came to determining salary increases, 2/3 of respondents would choose individual differentiation based on performance (66%) over fixed steps (34%).  

Flemish employees are only moderately satisfied with their pay. Mobility budget can be a crucial element in increasing their satisfaction. Moreover, Flemish employees have also proven to be in favour of determining their increase in fixed pay by their individual performance. Vlerick Business School and vacature.com came to this conclusion following a survey of 3,622 salaried Flemish employees. The sample* consisted of a balanced cross-section of the population, in which all ages and income brackets were represented.

The scope for salary increases and seniority-based remuneration are topics that are currently being hotly debated. For this reason, Professor Xavier Baeten and researcher Bettina De Ruyck are looking for the first time at how satisfied employees themselves are with their salary and benefits package, and what their specific preferences are.

Download the research report

Satisfaction with reward package leaves room for improvement

When employees were asked about their satisfaction with their current reward package, all aspects were considered: fixed salary, variable salary, benefits and company policy on pay rises or bonuses.

  • There is a large difference in satisfaction between managers (a score of 4 out of 5) and operational white-collar workers (3.4 out of 5). The fact that managers are more often remunerated on the basis of their performance seems to contribute to this satisfaction.
  • Moreover, employees are not so much dissatisfied with the absolute level of the salary, bonus or benefits; instead they are dissatisfied with the way in which salary increases and bonuses are determined, or with the lack of transparent communication about this.

Mobility budget appears to be an important driver to increase reward satisfaction

  • The elements that contribute the most to satisfaction are: 1/ the number of benefits (insurance policies, luncheon vouchers etc., IT, company car and mobility); 2/ the salary level; 3/ having a mobility budget.
  • Just 13% of white-collar workers and 21% of managers have a mobility budget. Those who do can generally choose between a bicycle, a car and a season ticket for public transport. Car sharing or bike sharing are less common.
  • The striking thing is that those who currently have freedom of choice for mobility are very enthusiastic about it.

The figures show that for businesses, there is still a lot of scope for introducing a mobility budget as an element in employees’ satisfaction with their pay,” Professor Xavier Baeten explains. “Unfamiliarity breeds suspicion, but the relatively limited group of employees that currently has a mobility budget does attach a great deal of importance to it. This is a clear signal to both the government and employers to make a stronger commitment to the mobility budget, as one way of increasing employees’ satisfaction with how their pay is determined.”

Basing salary evolution on individual performance?

  • If employees were given the choice when it came to determining salary increases, 2/3 of respondents would choose individual differentiation based on performance (66%) over fixed steps (34%). Moreover, it is mainly managers and white-collar workers who want to see this kind of system; blue-collar workers (55%) tend to prefer the same pay rise for everyone.
  • It is also striking that employees attach more weight to collective criteria for variable remuneration than to individual performance.
  • Almost 80% of white-collar workers under the age of 30 prefer performance-based pay increase; among over-45s this falls to 50%.
  • 7 out of 10 salaried employees would like to have a pay rise every year.

Given the strong preference for performance-based remuneration, it is clear that we need the courage to tackle the debate,” Xavier Baeten concludes. “However converting these ideas into practice certainly does not need to be black and white.”

Xavier Baeten is therefore calling for a combination of the best of both systems: “Experience still counts, but only in the first few years of a new job, when the employee has the fastest learning curve. Once the employee has built up the necessary experience and has reached a defined maximum salary which is in line with market expectations, a system of variable remuneration should come into play. It is still possible to earn more, but this depends on performance. Collective forms of remuneration might also be an option. In that case, the employer not only looks at an individual’s performance, but also at that of the team or the whole company. Research also confirms that the impact of a collective system like this has a more positive effect on performance than individual systems do.”

*About the survey
  • Survey by Vlerick Business School and vacature.com amongst 3,622 salaried employees in Flanders
  • 15% blue-collar workers, 30% operational white-collar workers, 28% professionals/experts, 22% management, 5% healthcare/education.
  • 35% women, 65% men
  • 30% aged under 35, 21% between 36-45, 29% between 46 and 55, 19% over 55
  • The median net salary is 2,400 euros

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