It isn’t clear exactly when the term “emotional salary” was coined, referring to the non-economic satisfaction that work gives us, which has a decisive influence on your team’s wellbeing. However, it is increasingly evident that, as executives, it is extremely important to bear in mind how powerful this concept can be, both in attracting and retaining talent.
What exactly is emotional salary?
It may be, as IESE professor Mike Rosenberg points out, that talking about “emotional salary” is rather reductive, as many of us – himself included – have, at times, found ourselves clocking into an office that has a terrible atmosphere, even though we were looking to the future and wanted to learn.
Within a company, wellbeing is like placing weights on a scale: on the one hand, there is the salary, and on the other, a complex network of intangible assets, with infinite connections that are entirely subjective, but which may prove decisive when it comes to accepting or rejecting a job offer.
“Your relationship with a company is multifaceted,” emphasizes Rosenberg. He continues, “There is one critical factor, which is feeling that we belong to something greater than ourselves”.
Emotional salary is a such a complex concept. It is not just about what we receive or feel in a company, but also how we perceive this company, and whether or not we believe that “being a part of that organization aligns with our life’s purpose,” he explains.
In this respect, 96% of those surveyed in the Randstad Employer Brand Research report state that feeling in harmony with the values of the company is fundamental to their satisfaction, so much so that half the participants also maintained that they would never work for a firm that had a bad reputation, even for a higher salary.
“If you want to hire the most talented people, you need to be environmentally conscious, or you won’t succeed. Sustainability has become an imperative for any type of company,” points out Rosenberg.
How can executives consider emotional salary?
As emotional salary is subjective, and closely tied to emotions, the key elements that you need to consider change over time. For example, “nowadays, equality of opportunity between women and men is very important. It always has been, but previously people didn’t pay as much attention to it,” indicates Rosenberg.
IESE professor Núria Chinchilla is exploring the importance of harmony between company and personal purpose. “After the pandemic, people want a job that has meaning, with a why that makes it worthwhile,” she explains.
More than emotional salary, Chinchilla talks about climate and human ecology within the company. “Because that climate helps us be better people, both at work and in our family lives. In addition to climate change, we also have to assess the climate within companies to see whether it is toxic or refreshing,” she adds.
However, above all, for Chinchilla, the most relevant concept when it comes to team wellbeing is the promotion of loyalty, not retention. Meaning, helping employees define their professional and personal mission, and trying to align it with the company’s mission. “For example, IESE’s mission is to ensure that its participants become leaders who have a spirit of service, and excellent professionals. As a professor, in my work, I am using my abilities to contribute to the achievement of this objective. And this aligns perfectly with my mission, which is to help students think, and be better professionals,” explains Chinchilla.
“More and more studies are in agreement, showing that the majority of workers who leave their jobs – more than 60% – do so because of an executive style that does not take them into account as people: being mistreated either in relation to schedules, conflicts, or not being allowed to have an opinion when it comes to decision-making,” concludes the professor.
In the end, the leaders of a company are the ones who have an impact on people’s daily experience. For this reason, as an executive, it is essential that you learn to be a good leader, and that you are prepared to listen to those who you are responsible for, and do everything you can to ensure that they are happy with the development of their role and their career.
8 tips for implementing emotional salary in your company
- Cultivate a culture of recognition: implement programs or practices that promote recognition and appreciation of your employees’ achievements and efforts.
- Provide constructive feedback: offer feedback on the performance of employees regularly, highlighting their strengths and areas for improvement.
- Balance work and personal life: support policies and practices that enable employees to maintain a healthy balance between their work and personal lives, such as flexible schedules, or remote working
- Facilitate opportunities for development: offer options for professional growth and development through training, mentoring programs, or assigning challenging projects.
- Encourage a positive work environment: create a work environment in which respect, collaboration and effective communication between team members is promoted.
- Establish clear, achievable goals: define specific, realistic objectives, ensuring that they are aligned with the organization’s vision and values.
- Boost participation and autonomy: allow your employees to have a voice in decision-making, promoting participation and authorizing a certain degree of autonomy in carrying out tasks.
- Promote emotional well-being: offer resources and programs that promote the emotional wellbeing of the employees, such as psychological support services, wellbeing activities, or flexibility to deal with difficult personal circumstances.
IESE’s programs for executives will help you to progress in your career, and to become the impactful leader that your company needs, putting the wellbeing of all those who are part of the organization at the center.