A fundamental premise of any compensation strategy is that the system of rewards has (as noted in our text) “a powerful effect on behaviour.” This effect can be positive if the rewards system is built within the framework of organizational justice. If individuals perceive that rewards provide for fair outcomes resulting from fair processes, they will believe and behave in a way that supports the rewards strategy. This forms part of the psychological contract with the organization.
On the other hand, if individuals do not believe that the rewards system is equitable or fair, their behaviour follows a negative path of dissatisfaction, disengagement, and, ultimately, total disconnection from the organization. This disconnection is either voluntary, in the form of a quit, or involuntary, as the organization has to make the ‘quit’ decision for the individual. The result is that both the physical employment contract, as well as the psychological contract, with the organization are severed completely.
When we expand the concept of the organization to the broader social community, we can see the direct and powerful impact of rewards system(s) provided by government relief programs through the continuing pandemic crisis. Millions of Canadians are out of work, and they face devastating consequences if they cannot afford to pay for basic provisions, such as food and shelter. Financial income programs, such as the Canadian Emergency Response Benefit (CERB), are able to provide some relief to many unemployed Canadians, which allows them to meet, to some degree, their basic needs. This emergency rewards system is not perfect, but it does alleviate some financial pressures. Furthermore, the distribution of the CERB funds appears to be based on a perceived system of organizational justice where the process and the rewards are equitable, meaning that the same rules apply to everyone and the distributed funds are the same.
Does the CERB funding provide for an increase in the psychological contract within our social communities? According to Maslow’s hierarchy of needs, when survival and basic needs are met, individuals are able to move toward social needs. This need is one of social belonging, which, from a compensation strategy application, speaks to membership behaviour and commitment. Once individuals have a sense of belonging, they can progress along Maslow’s theoretical hierarchy to meet esteem and self-actualization needs. When people are able to function beyond meeting their basic needs, they are able to be engaged and committed to the larger community.
With this in mind, the question of continuing funding, such as that provided by the CERB, as a universal basic income strategy for all Canadians, comes into play. It may be time to continue the path to a universal basic income strategy, as companies and economies start the very slow path to recovery from the pandemic. The positive aspects on a global perspective of a basic income strategy are explored in this article posted by the CBC. The article presents an interesting perspective that a basic income strategy provides for more motivation for individuals to work, which seems to link directly to the positive aspects of a psychological social contract. John Michael McGrath provides us with this opinion piece, in which he explores the impact of ongoing economic change, including the need for a basic income strategy, as we move into a post-pandemic world of work.
As noted in both articles, and based on our own pandemic experiences, we know there is no going backward once this crisis is over. The movement forward, however, provides such great opportunities for social change and economic justice. Let’s make it work for everyone.
Discussion Questions:
- In your opinion, how does the concept of a universal basic income align with the principles of procedural and distributive justice?
- How would a universal basic income provide a remedy for the four causes of reward dissatisfaction?
- In your opinion, would a universal basic income increase or decrease the personal motivation of individuals to find paid employment?