By Chris Deubert
Constangy, Brooks, Smith & Prophete, LLP

The United States is experiencing a historically tight and transient labor market.  Employers seeking to remain competitive in such a market would be wise to re-evaluate the nature of employment in their industry, the roles within their company, and related pay and benefits according to a time-tested theory.

In 1959, Frederick Herzberg, a psychologist and professor at the University of Utah, published what would become a landmark treatise: The Motivation to Work.  In that book and subsequent work over the remainder of his career until his passing in 2000, Herzberg laid out a “two-factor theory” for evaluating employee satisfaction in the workplace.  While many employers may recognize Herzberg’s theory in practice rather than name, it is important for employers to understand the theory and revisit it from time-to-time.

The two factors referenced in Herzberg’s theory are the hygiene and motivational factors of employment.

Hygiene factors are the basic or core components of employment, such as pay, title, benefits, job security, working conditions, and company policies.  Studies by Herzberg and others show that an employee’s perception of the hygiene factors in their employment correlates to their level of job dissatisfaction. In other words, if an employees do not believe they are receiving the pay they deserve or have to work in an environment where inappropriate conduct is common, they are likely to be dissatisfied with their job.

Motivational factors include challenging work, recognition, responsibility, and personal growth.  These factors are generally intrinsic to the job – they speak to the degree to which an employees enjoy the subject matter of their work and believe they have meaningful control over their work and career.  Motivational factors are associated with employee job satisfaction.

The distinction between hygiene and motivational factors is important because they address different components of employee happiness.  As explained by Herzberg, “[t]he opposite of job satisfaction is not job dissatisfaction but, rather, no job satisfaction; and similarly, the opposite of job dissatisfaction is not job satisfaction, but no job dissatisfaction.”  Thus, if an employee is content with pay and benefits but has little control over the work or prospect for advancement, the employee will not be satisfied with the job – they will only not be dissatisfied.

Employers should understand the difference between the two factors in evaluating employee happiness.  While it is clear that employers should be striving to create work environments in which employees feel adequately paid and excited about their work, that is not always realistic.

Consequently, where employers are unable to meet one factor as well as they would like, they can try to do more on the other factor.  For example, if an employer is unable to pay high wages because of the company’s financial situation, it should try to make up for it by providing employees a chance to take on projects in which they are interested, and that give them a meaningful role in the company.  Conversely, if employers are in an industry where jobs are inherently uninteresting or lacking in creativity, they will need to provide better pay and benefits.

Nevertheless, in either of these situations, the employer is likely to face recruitment and retention challenges as employees seek jobs which satisfy both hygiene and motivational factors.

Understanding where you as an employer fall is particularly important in today’s labor market.  Employers who pay well will generally attract talent, but whether that talent stays is another question.  Where employers cannot pay generously, they should view certain hygiene factors easily within their control, such as clear and fairly enforced policies, as a bare minimum, while engaging with their employees to identify and harness their motivational factors.