Corporate Perks: Engagement Catalyst?

If not done strategically, some perks may backfire, resulting in an adverse impact on morale and engagement, said Allison O’Kelly, CEO and founder of Mom Corps, a professional staffing and training company.

The main lesson: Know the audience. For instance, giving all employees gift cards or other tangible rewards could come across as an insult to some, O’Kelly said.

The individual perk isn’t a bad thing, but employers should ensure it’s not considered superficial by the person receiving it. Instead, the perk or reward should take into account what employees value.

“If you were in a small Internet startup and everybody happens to be 25 years old, then they’re likely all looking for similar things,” O’Kelly said. “But when you’re in a company where people are going through different stages in their life, having Friday happy hours might be something that’s actually stressful.”

Another word of caution: some perks can move the engagement needle when they are first introduced but have a short shelf-life because employees come to expect them, said Sayed Sadjady, a principal with PricewaterhouseCoopers’ people and change practice.

Perks also shouldn’t be relied upon too heavily to drive engagement because they cost money. When money is tight, many perks used to drive engagement are the first to get cut from the budget.

For instance, Sadjady said in 2008 during the financial crash and ensuing economic recession, companies hunkered down and many perks were first on the chopping block.

“Even something as simple as holiday parties, some [companies] eliminated them and some scaled them back significantly, or corporate off-site annual conferences were really scaled back,” he said. “These were the types of things people had taken for granted — they were part of the operating model — and when they are taken back, [it] actually [has] a negative impact.”

Elizabeth Dunlap, senior vice president and chief people officer at restaurant chain Panera Bread, said the first step is to understand what employees want to ensure that time, money and energy is spent optimally.

“We look across everything that we offer to our associates as the total value of employment,” she said. “So it could be their base compensation. It could be one of a number of benefit programs. It could be training and development. It could be our culture — whatever it is. Anything that we spend money on or time on or energy or effort against that is purely in the spirit of benefiting our associates, we would put under that total value of employment. If you have a benefit that’s not valued, or the value of it is not consistent with the cost that it takes to provide it, there’s an opportunity to reshuffle that.”

For instance, flexible work arrangements might be a significant motivator for some employees; they also may not cost the organization much to offer. But everyone doesn’t necessarily want a flexible work policy because employees tend to want different things at different stages of their working lives.

Catering to employees’ values and needs also can be applied to rewards and recognition in terms of driving engagement. One way Aon Hewitt drives engagement internally is by taking a holistic approach in terms of total rewards. That means recognizing that different employee groups value different things. Adler said the company offers its rewards accordingly.

Millennials, for example, may value take-home pay more than benefits because, to them, cash in hand might be handy to pay off student loans. Baby boomers, on the other hand, may place a higher value on benefits; many are older, nearing retirement and are more likely to have immediate health care needs.

“We look at them as a basket of rewards and understand that what’s in that basket needs to be adjusted to the particular person,” Adler said. “So you’d be spending the same money on each employee, but you spend it in a different way that maximizes its motivational and engagement impact for the particular employee.”

There are many proven techniques to drive employee engagement, but there is no one-size-fits-all model that can be applied across the board. Talent leaders should start by studying the motivational — and psychological — habits of the workforce, finding the most realistic and cost-efficient means, and remaining agile and flexible in whatever approach is ultimately chosen.

When organizations grow complacent in terms of keeping employees engaged, it is more likely that employee motivations and values already have begun to change.

What’s Ahead: Is Involvement the New Engagement?