Security, Social Rewards Could Be More Important than Pay for Workers Affected by Threats of Anthrax, Terrorism

BUFFALO, N.Y. -- Faced with growing concerns about workplace safety as a result of Anthrax threats and the events of Sept. 11, employers hoping to retain employees and lessen employee fears should change the way they reward them, says an expert on compensation and human resources.

Companies with at-risk employees should begin to emphasize security and social rewards as much, or more, than salary, says Jerry M. Newman, SUNY Distinguished Teaching Professor and interim dean in the University at Buffalo School of Management.

"Post Sept. 11, 2001, there are groups of workers for whom the social contract between employer and employee has changed," explains Newman, co-author of "Compensation," a top textbook in the human resources field. "There are workers who are receiving compensation for service that previously had no associated life threats."

"The first inclination among companies is to offer these employees higher compensation, which probably should be part of the package, but it shouldn't be the most important element," he adds. "The Number One thing we've learned from the history of employment in America is that money doesn't compensate for insecurity, money doesn't compensate for a lack of safety."

Newman says some sectors of the American workplace are experiencing a reversion from the modern notion of job security -- constancy of wages and employment -- to an early 1900s definition that equates security with safety.

As a result, employers who don't address insecurity among employees risk losing them and could incur negative economic effects associated with a decline in productivity, increased stress-related illness among employees and training of replacement workers, he says.

"We live in a society where workers will become mobile if they feel unsafe. Paying them more money is not the answer to retaining them or getting more productivity from them in these difficult times," Newman says.

In "Compensation," Newman ranks 13 job rewards most valued by employees. In light of recent events, Newman says three rewards have increased in value for employees, and must be addressed by employers. They are:

o Security rewards -- Newman says employees seek regular feedback on what is being done to improve workplace safety. Employers should provide additional safety training and invest in technologies that take employees out of harm's way.

"Throughout our history we've developed new technology to make the workplace more safe," he says. "This will be one of the biggest outcomes of the events of Sept. 11."

o Social rewards -- Newman says companies should provide opportunities for employees to discuss their insecurities among themselves and with counselors. "After Sept. 11 companies addressed the crisis in two ways," he says. "Some said, 'This is a minor glitch, get back to work.' Other companies encouraged workers to form psychological linkages to help them cope. We'll probably find that the latter is a much better strategy for retaining and motivating employees."

o Recognition rewards -- The public outpouring of praise received by firefighters and policeman after Sept. 11 is an example of how recognition can be a reward for employees, Newman says. He recommends that employers follow that example by citing the efforts of employees who perform duties that are hazardous or have become hazardous.

The overall effect of this shift in priorities, Newman predicts, will be a return to the traditional notion of employers and employees as members of an extended family.

"The game has changed and workers need incentives other than pay to stay productive in the face of what they perceive to be increasing danger," Newman says. "The only thing that will keep employees going in times like these is a belief in the company as a source of refuge."