employee engagement, HR

Emotional Compensation: An Employee Engagement and Retention Tool | CA Employee Benefits Firm

First came the pandemic, which was followed by The Great Resignation and the labor shortage, and now quiet quitting. Employers are challenged to attract and retain employees among all these upheavals, keep them engaged, and maintain a psychologically safe work environment.

Higher wages, hiring bonuses, increased benefits packages all sound like possible solutions. If your current retention strategy is not having the impact you want, it’s time to think beyond traditional financial incentives. Consider exploring emotional compensation, which Michael Lee Stallard, cofounder and president of E Pluribus Partners, a think tank and consultancy, believes will be increasingly important and valued by employees.

Emotional compensation is based on meeting seven universal human needs that allow people to thrive at work. They are respect, recognition, meaning, belonging, autonomy, personal growth, and progress. Stallard says that the resulting sense of connection from having these needs met engenders positive emotions and makes us feel connected to our work and our colleagues. Developing this connection dramatically increases an organization’s chance of retaining employees.

Let’s look at each of these universal needs with a focus on what managers can do. Since they work closely with their team on a daily basis, they are well positioned to take action. There are so many things that leaders in organizations can do to create a culture of respect. It starts, of course, with living the values. Beyond that:

Show Interest

Precisely, show your current staff the kind of interest you took in them when you were recruiting them to join your organization regardless of their tenure or how well you think you know them. Ask sincere, open-ended questions and listen carefully to their responses. You will probably be amazed at what you learn.\

Ask Their Opinion

Since they are closest to the work, ask about possible solutions to real problems. Listen to their answers and give feedback. If you can’t adopt their idea, let them know the business reasons why. If you can use it, give them credit publicly and if possible, reward them too. Being asked lets employees know you value their knowledge and intelligence.


One of the simplest things a manager can do to express employee appreciation and recognition is to say thank you—and it costs nothing to do so. With all the hand wringing over employees quitting their jobs, employee recognition should be paramount on every manager’s task list.

Let them know their work matters. Let people know often how much value they and their work bring to your organization. Let them know they make a difference. Send personal, handwritten notes. You’d be surprised how powerful that can be. Silence, on the other hand, can send a negative message—that the work and the worker has no value.


We all want to do work that matters—that has a purpose. Every employee wants to feel a connection to their organization’s mission and values.

Explain where they fit. Let each employee know how their work fits into the work of your department, and how the department’s work fits into the organization’s strategic goals, mission, and values. For example, describe to support staff, like procurement or accounting, how their work supports the sales and engineering departments, which bring in the organization’s revenue.

Talk more about why you do certain things in your department. It can make a big difference if people know not just that some tasks must be done but why those tasks are significant to the big picture.


Make room for light-hearted fun in the workplace. When people are having fun, they are happier, friendlier and open, fostering workplace friendships. Workplace friendships taps into the basic need for a sense of belonging and removes any feeling of being in competition with coworkers.

Light-hearted fun has such a positive impact on productivity, engagement and retention. It lets employees know that they belong—belong to a team and an organization that values their emotional well-being. It also unleashes creativity, which can result in higher productivity.


Autonomy and flexibility are critical for retaining staff, especially now. In this world of virtual work, autonomy allows for a degree of control over one’s working conditions and processes. It includes the flexibility of where work and when is performed. Managers must examine what work hours, scheduling, and patterns are best for individuals and their teams; how work is organized and accomplished; and how flexibility impacts productivity and outcomes to meet the needs of all.

Employees must still be accountable to get the work accomplished and be available for meetings, calls, and other collaborative efforts.

Assuming you can offer your employees more autonomy, listen to them and understand their needs. One thing we learned during the pandemic: If employees are treated in a supportive and humane way, productivity doesn’t suffer.

Personal Growth

Employees want the opportunity to learn and grow. It’s one reason cited for them leaving their jobs. And it’s so much easier to recruit internally than externally, especially in tight labor markets.

Create a Learning Culture

Encourage your employees to be lifelong learners. It starts by modeling lifelong learning behaviors, such as sharing podcasts, TedTalks, and YouTube videos. Consider developing a resource library including books, articles, webcasts, podcasts, and Massive Open Online Courses (MOOCs). Encourage employees to contribute to this resource and to share the things they are learning. It will keep them engaged and expand their professional and personal interests.


You’ve made growth opportunities available to your employees, but how do you know if progress is being made? Follow up with an employee once they’ve taken advantage of an opportunity. Ask them what they’ve learned, what needs clarification, if others might benefit, and how they might apply what they learned.

Such questions and feedback provide managers an opportunity to consider new assignments, projects, or tasks—perhaps a growth assignment—that could help prepare the employee for future roles with the organization, a way for an employee to progress.

Of course, employees must take responsibility for their growth and progress, but managers guide them through this journey and help set realistic career goals.

According to Gallup, employee engagement has declined for the first time in more than a decade, from 36% engaged employees in 2020 to 34% in 2021—and now 32% in 2022. What better time for organizations to focus on how to create the connections people want and organizations need?

By Cornelia Gamlem and Barbara Mitchell

Originally posted on HR Exchange Network