Leadership's Role in the Emotional Paycheck: Cultivating Great Cultures

Apr 24, 2024

The workplace has undergone tremendous change over the last few years. A topic we have discussed at length in terms of why exemplary leadership is more important than ever. We have seen The Great Resignation, The Great Gloom, The Great Reshuffle…all of which often had a less-than-great impact on organizations and highlighted why it is imperative that leaders tune into what their people want in order to attract and keep top talent. Moving towards a more people-centered approach has made the difference as to whether or not organizations have weathered the storms since 2020.

A recent trend to emerge in the world of work is the “emotional paycheck.” Defined as the less tangible benefits of work, the emotional paycheck includes flexibility in work location and working hours, gym memberships, meditation app subscriptions, positive work culture, and more. They are the non-financial gains that employees obtain that motivate and engage them on a more emotional level and lead to greater wellbeing and job satisfaction.

The latest research from Wiley Workplace Intelligence on the topic discovered that above all else, respondents prioritized a positive organizational culture – even in some cases above competitive pay. That is how important good culture is to organizations.

As passionate advocates of leadership development, we wanted to dive further into the research and understand how effective leadership impacts organizational culture. Do leaders have as large of a role in workplace wellbeing and retention as we think they do? Are good leaders crucial to creating great workplaces?

The answer is yes.

Good Leadership is Crucial to Retention

Of those surveyed, almost all respondents (97%) said that effective leadership is a main factor in staying with a company. The good news for organizations looking to create a culture of leadership, is that leadership skills can be practiced and developed like any other skill.

97% of leaders said effective leadership is the main factor in staying with a company. (Source: Wiley Workplace Intelligence, 2024) Illustration of thumbs up.

Utilizing the framework of The Five Practices of Exemplary Leadership®, every individual has the power to learn effective leadership behaviors. The Five Practices® encompass behaviors that The Leadership Challenge authors Jim Kouzes and Barry Posner discovered in their research. When leaders experience their personal best, they display five core practices: they Model the Way, Inspire a Shared Vision, Challenge the Process, Enable Others to Act, and Encourage the Heart.

The Future of Work Depends on Great Leaders

Working to build these skills in your organization now is crucial as our research showed that 86% of leaders said leadership is important for future success in the workplace. Quite literally, the future of the workplace is dependent on exemplary leadership.

As we have learned over the last few years, effective leadership is essential. Fostering innovation, adapting to change, attracting and retaining talent, building resilience, promoting diversity and inclusion, and driving purpose and meaning are all imperative to the success of your organization. Organizations that invest in developing strong leadership capabilities will be better positioned to thrive in the dynamic and evolving landscape of the future of work.

From doing what you say you’ll do and inspiring those around you with clear, attainable visions for the future, to celebrating the wins of the people on your teams, there are small and actionable ways everyone can start to embody The Five Practices and thus become more effective leaders.

By engaging The Leadership Challenge®, whether through a facilitated learning experience that assesses leadership competencies and teaches these skills, or simply starting to employ the behaviors outlined in The Five Practices, these steps will help create a more positive organizational culture and contribute to the all-important emotional paycheck that elevates the meaning of work.

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