No doubt, the down economy is changing the way employers are looking at the more fun side of benefits. According to an October 2008 Challenger, Gray, and Christmas survey on employee perks, 20% of companies were forced to cut down on or eliminate perks in order to lower costs. Meanwhile, 35% of HR/benefits executives did not cut perks but utilized low-cost rewards.
But no matter the approach to cost-cutting, communication is key.
When employers are deciding whether to cut perks they should "come at it with a new energy, and say, 'Now is the time to rally around cost-cutting ideas [that support our company's mission],'" says Bob Nelson, Ph.D., author of "1001 Ways to Reward Employees."
Ideally, Nelson says, employees will "rise to the occasion [asking], 'Do we really need this?'"
If employers need to remove perks, they should try to renege on those that affect the least amount of people, such as adoption assistance or shifting costs on day care to those who utilize the service, affirms Nelson.
No matter what, it should never be about cost-cutting, but rather about how employers can instill the company mission and goals into their staff's psyche by rewarding them for a job well-done.
It is imperative that employers are frank and inclusive when determining which perks go and which stay, as many employees may see the disappearance of bagel breakfasts and leap to the conclusion that the company is going under.
When considering a change in perk offerings, experts recommend asking workers what they would like to see, while honestly presenting the company's need to cut costs and increase revenue.
Once decisions have been made, employers can remind employees that the eliminated perks can always be reintroduced.
Further, perks should not be simply eliminated, rewards pros say; rather, employers must use positive communication and tools to renew enthusiasm in the face of difficult financial times.
Perks with no price tag
Employers don't need to pay a dime for the most effective perk, contends Razor Suleman, CEO of Toronto-based I Love Rewards Inc.; a simple 'thank you' from a supervisor will do. Positive reinforcement or a spontaneous doughnut breakfast from a manager, rather than the company, will mean more to the employee, according to Nelson.
Intangible, interpersonal perks are most favored by employees, according to a poll conducted by Nelson, with 67% of employees reporting that they liked receiving positive e-mails from colleagues and their employers.
Even small employers can offer positive reinforcement with no cost by acknowledging star employees on a bulletin board.
Creating 'point-a-holics'
Suleman tested prospective rewarding methods that reinforced his company's values and purpose on his 27-person staff before tailoring the strategies to clients such as Microsoft Corporation, Delta Hotels and Marriot Hotels.
The most popular rewards system, both inside his company and out, is "point-a-holics," a point system where employees can reward their peers for exceptional effort. Employees can choose to trade their points for iTunes gift cards and movie passes, or can save them to cash in at a later date for big-ticket items like a mini-coupe car or condo.
Much progress has been made since the company launched the program a year and a half ago. Initially the program had no controls and ended up overbudget. When they explained the situation to employees, the group decided that handing out points every week would be a more realistic goal. The change not only earned the company 10% of whatever they saved in points, they increased participation from 20% to 96%.
As a client of I Love Rewards since early 2008, Marriott Hotels in Canada has adopted the peer-to-peer point program encouraging colleagues to reward "basics" on the job, such as team work, good first impressions or anticipating a guest's needs. They also receive points for marketing and charity events.
Marriott has also installed the employee-referral system, which rewards employees for recommendations and an additional amount if the individual is hired. When tested within Suleman's workforce, they increased employee referrals from 1.1 referral per employee in 2006 to 2.4 in 2008, once they began rewarding employees for referrals, successful or not. In the end, one out of 12 referrals turns into a successful hire — many drawn in by the positive perk offerings.
"[Our rewards program] has become a recruiting piece as well," explains Mike Truscott, the director of human resources at Marriott Canada. "We [introduce the program] when recruiting at colleges and refer to it as a cutting-edge referral program. So far we've had positive feedback — even a few 'wows.'"
Suleman recognizes, however, that this technique will not work in every business setting and advises that to discourage a feeling of entitlement, employers should keep workers on their toes by using both negative and positive reinforcement.
If employers fail to publicly praise or reward exceptional employees, they stand to lose them, Nelson contends. "Treating everyone the same leads to mediocrity."
In these troubling economic times, that's the last thing an employer wants.
It's all in the little things
Employers might want to think twice before removing coffee machines from the office. Not only may employee morale suffer, but productivity also may plummet, as employees may lose work time by leaving the office for their caffeine fix.
According to a 2008 McKinsey Social Networking Study on behalf of Mars Drinks North America, 42% of employees believe that hot beverages have a positive effect on their work productivity. Approximately 57% felt that employers cared about their well-being when employers provided them with "good hot beverage options at work
EBN spends "Five Minutes With ..." Razor Suleman
Razor Suleman, CEO of Toronto-based I Love Rewards, provides his staff and clients with innovative ideas on how to spend little but gain big results in productivity and morale through reward programs. Download his "Five Minutes With ..." podcast to ear his advice on how employers can perk up their rewards program without depreciating the bottom line. Visit ebn.benefitnews.com/podcasts.
