It is not clear what the agree and disagree refer to. My thought is that high morale is the most important factor in a happy staff because people need to feel valued and part of something important. However, the factor of financial incentive can not be downplayed, and together these two will contribute to employee retention.
Companies would help themselves with employee retention by offering competitive salaries and engaging in higher moral practices. In today's economy, companies don't place a high value on employee retention, which lowers their perception by the public, creating a slippery slope. Employee loyalty, better financial incentives, and more moral practices would help many companies with employee retention.
Financial incentives help stave off employee loss due to better pay elsewhere. If the financial incentives balance out the gains they'd get from leaving, then they have less reason to leave. High morale practices, on the other hand, are not necessarily going to keep employees in place. If they need the higher pay, then they'll likely leave for it, no matter how much they like the morals or values of the company.
Certainly, a happy employee is more likely to stay in a job than an unhappy one. In today's uncertain financial times, one of the best ways to keep an employee happy is to pay them well and to add financial incentives on top of that. An additional, unexpected bonus helps keep the employee around to see what pleasant surprise lies around the corner.
If you are feeling valued in your workplace, you will do better work. You will also be more inclined to want to stay in an environment where you feel you are wanted and your work is appreciated. Compensation, and a culture that is more positive, tends to keep workers happy.
In these tough economic times, many companies have been demanding more and more from their workers, and giving less and less, in terms of money and respect, to get it. This can only work so long, and if you treat your workers badly, they will definitely remember how the company behaved when the market starts to pick up. As an example, the tech market in Hartford has started to pick up, and I know of at least one company that was on the fast track to growth, but was paying its employees badly; as a result, they are now suddenly experiencing a "brain drain" of their best talent, and furthermore, are having a lot of trouble getting potential candidates in the door, or getting those interviewed to ultimately accept employment.
The first thing potential employees usually ask their potential employers is if there are any incentives that come along with being a part of the company. Financial incentives are one of the main reasons a person either decides to take a position or decline a position.
Morale also plays a major part in whether or not a person will decide to accept or reject a job offer. If you are in a place of employment where the financial incentives are non-existent and the morale is low, you are more likely to lose an employee faster than you can hire them
While there are some employers who view employees as cogs in their corporate machine, employees are human beings first and foremost and respond positively to tangible, financial demonstrations of employer appreciation for a job well done. Most workers also respond positively, and bond more surely with a company, when working conditions and practices demonstrate respect for them and their needs and make their workdays more pleasant.
The idea that you could work harder for no extra pay is a dead trait in today's workers. This is mostly because the CEOs and executive-level employees get billions of dollars in bonuses for doing next to nothing, and the workers know this. The workers see the guys at the top getting extra money for doing something good, so they expect the same kind of compensation or they will not bother to go beyond the bare minimum required, and are more likely to quit if they can be better off elsewhere.
The above statement is almost too obvious. What the statement is essentially saying is that, if we pay our employees copious amounts of money, or practice good ethics, people will want to work for us. This should be common sense, and anyone who would debate that statement has not thoroughly thought it through.