Salary and time off are two aspects of a job that significantly contribute to both employee stress and motivation. In many organisations, both compensation and the amount of paid time off available are rarely negotiated individually. Instead, they tend to be offered as a ‚take it or leave it‘ package in the hiring process. And once working for the company, employees often have an even harder time seeking an increase in either of them. But what is the true impact of pay and time off on your team?
Is there anything you can do, as a leader, to positively influence these aspects? Considering managers typically have limited (if any) wiggle room in a pre-established corridor of compensation and that the number of paid time off days seems to be attached to the seniority of a role or ‚band‘, how can you make a positive impact?
But first of all, let’s take a look at how pay or compensation affects employees.
The true impact of pay or compensation on your staff
Research shows that low pay is one of the key contributors to low satisfaction with your job and to high levels of stress (Badil & Rehman, 2018). In fact, according to the 2021 Work and Well-being Survey of the American Psychological Association, as many as 56% of employees say that their low salary has a significant impact on their stress levels.
Looking beyond stress, however, it appears that the salary of a position impacts other factors too. In particular, it contributes to how people choose to answer some of the questions they ask themselves about a prospective job (Gupta & Shaw, 2014):
- Do I want to apply for this job?
- Will I accept this role if offered to me?
- And if so, how long will I stay in this role?
This leads to the conclusion that depending on the salary or compensation offered, the quality of the people you bring into your fold and then manage to retain will considerably vary. And it’s not only the quality of the staff that’s impacted but also their motivation and level of performance.
Considering the compensation system as a whole
When talking about pay, we’re not looking at salary alone. In fact, it’s helpful to consider the ‚compensation system‘ of a company in its entirety, including base salary, bonuses, incentives, and rewards. All these aspects can fall under the terms ‚pay‘ or ‚compensation‘ and drive critical outcomes for the business. Examples of such critical outcomes are safety, quality, creativity, and innovation. But there is more.
For example, in a review article, Buchko (1993) highlights that one crucial countermeasure to employee turnover is the compensation scheme, which needs to be “fair, just, reasonable and transparent”.
What can leaders do to leverage or influence the compensation system?
So how can you, as a leader, make an impact on these crucial aspects when you have to work within the boundaries the company sets? Here are a few ideas for you to consider:
- When creating a new role, benchmark the salary to ensure the best talent wants to work in your team.
- When it comes to performance appraisals and salary negotiation, be open and transparent about what’s possible and what isn’t. Also, always explains any decisions you make.
- Ensure you’re aware of any rewards and incentives that are within your discretion to use. Are there any vouchers, one-time payments, or other additional benefits you can offer your team? Whatever they are, use them wisely and yet fully.
- If monetary compensation isn’t an option, find other ways to show your appreciation and acknowledge the contribution that each of your team members makes. You can do this by offering feedback or providing opportunities for growth and development, for example.
Further considerations on the impact of pay
Money is certainly an effective tool – sometimes even too effective. So always use rewards and incentives wisely and fairly and in a way that doesn’t steer people into decisions and behaviours that could harm the company objectives.
Also, be aware that monetary compensation is an extrinsic motivator that tends to stimulate compliance, rather than true commitment. As humans, we adapt to anything. This means that as time goes on, in order to remain effective, rewards will need to get bigger and bigger.
And lastly, a higher salary shouldn’t be a means to ‚guilt trip‘ employees into longer working hours as this could potentially create conflict at home (Rubenstein, 2022).
As a next step, I would like to invite you to reflect on the compensation and benefits situation in your team. How much attention have you paid to it until now? Are you aware of the options you have? Do you know which of your team members prefers financial incentives or whether other factors matter more to them?
The true impact of time off work on your staff
Let’s now switch the focus on time away from our jobs. Taking time off work is obviously an important way to replenish our energy, stop the drain of our internal resources, and also start gaining new ones.
There are two main ways we can take time off work:
- Paid time off, including paid annual leave, claiming back overtime worked, or Bank Holidays.
- Days off sick (paid or unpaid). This comes into play when we’re physically or mentally ill, for example.
However, taking time off for health reasons may be due to other factors too. Burnout, for example, can result from the strain of being exposed to high levels of stress at work for an extended period of time. Or you may have a situation where your employees claim to be off sick when they’re not receiving the transfer or promotion they asked for, when they’re in the middle of a dispute with HR or with management, or when they perceive an injustice being committed in the organisation. This is known as absenteeism (Westman & Etzion, 2001).
The effects of time off work on stress, burnout, and absenteeism
In a way, simply staying away from work (whether consciously or not) may be used by employees to cope with the stress they face and to recharge their batteries. It’s a chance to escape from stress or boredom (even if only for a little while), and it allows for coming back strengthened (Westman & Etzion, 2001). The same study also showed that both burnout and absenteeism are reduced after taking time off. This, therefore, proves that taking time off can definitely act as a stress-management technique.
However, the positive impact on job stress and burnout fade gradually over time. In fact, this can happen as early as two weeks after returning from taking time off work. And any positive effects are almost entirely gone after six weeks.
This shows that while taking breaks from work is crucial to replenishing your energy, redesigning the workplace is equally as important. And the focus should be on in particular on reducing overload, ambiguity and conflict. Or, in the words of the researchers, “Preventive stress management is more effective for the individual and the organisation than stress management.”
The importance of taking frequent breaks
In another study, Etzion (2003) looked into the impact that the duration of time off work in the form of a holiday had on both job stress and on burnout. And again, the impact on both was significantly reduced upon return from taking time off work. Studies also found that burnout stayed low in the three weeks after returning, but the “level of stress had reverted to its initial pre-vacation level”. And that’s within only three weeks!
Because both long and short-term holidays were found to have this effect on stress, taking multiple week-long breaks over the course of the year (rather than longer holidays) might be more beneficial. This is because in either case, the positive effect from time off work doesn’t seem to last very long. And therefore, shorter but more frequent breaks would allow staff to reap the stress relief benefits that come from taking time away from work.
Holidays aren’t the only way we can take a break from work though. There are also weekends, evenings, and shorter breaks during the work day. All of these have been linked to a number of benefits (Fritz et al, 2013), including a positive mood, improved well-being, increased creativity, better job performance, increased work motivation and life satisfaction, and better sleep quality. On the flip side, we also have a less negative mood, decreased exhaustion, fatigue, burnout, and disengagement.
What should we do when taking a break from work?
So we looked at the impact of taking a break, how the duration of that break affects stress levels, and we looked at the benefits of taking frequent shorter breaks over longer ones. But does it matter what we do while we’re taking time off work? According to a study by Fritz et al, 2013, it most certainly does, and some of the activities that help are:
- Relaxing experiences, such as taking a walk or reading a book.
- Learning something new.
- Mentally and physically detaching from work.
- Social activities, such as spending time with family and friends.
- Exercising or being outdoors.
- Thinking about the positive aspects of work.
On the other hand, activities that aren’t positively impacting our stress levels while taking time off work include working during breaks. Examples of this are checking emails, making phone calls, and thinking about the negative aspects of work.
But other factors also contribute to how well we recover during our breaks from work. For example:
- A high workload and long working hours.
- Conflicts at work.
- Lack of information or bad equipment to complete one’s tasks.
And the reason why they matter is that when these elements are at play, we’re less able to detach from work mentally.
So how do you typically spend your time off work? What, in your mind, makes for a true break (long or short) from work? What makes it effective? Also, which activities and experiences help you best replenish your energy? What needs to be in place, in your personal life, and at work, to get the most out of your time off?
Practical suggestions to support your team with taking breaks from work
If you’re wondering what you can do as a leader to support your team when it comes to time off and taking breaks, here are some practical suggestions for you.
1. Encourage your employees to take breaks and time off work
Because we now know that the restorative effect fades within only a few weeks, do suggest that your staff take multiple breaks throughout the year, if at all possible.
2. Help your team detach from work
In order to maximise the positive benefits that taking time off can have on stress levels and burnout, it’s important that you encourage your team to truly and fully detach from work during planned time off, weekends, and evenings. That means no emails, no phone calls, and no requests for meetings.
Also, help your staff plan their work and redistribute tasks so they aren’t fearing the workload they might face when coming back. You may also want to encourage people to write to-do lists for the week ahead – on the previous Friday, for example. Because as we already learnt when looking at high workload, this improves well-being, even when the amount of work is still the same.
3. Encourage mini-breaks during the work day
And last but not least, allow for lunch breaks and encourage employees to truly detach. This means not scheduling meetings at lunchtime, and perhaps even suggesting to your team members that they go for a walk or sit down and have their lunch away from their desks. These make for micro-breaks at work, and as we’ve seen, they are important. So aim to inspire, lead by example, and create a “work environment that allows for learning, a sense of meaning, and connection with others” as this can help your team “feel more energized and less fatigued at work” (Fritz et al, 2013).
So here are some final questions for you to consider:
- What do you know about how your team members prefer to take their breaks from work?
- Can you ask them how rested they feel once they come back to work after a break? Are they energised and engaged?
- Also, how often do you ‚interrupt‘ their break time?
- And what example (or implicit norm) do you set with your own behaviour (by sending emails after hours, for example)?
- Do you encourage lunch breaks and micro-breaks for socialising?