Think Perks Are an Incentive? Your Team Doesn't.
Earlier this year, we completed research for our book, The Employee Experience: How to Attract Talent, Retain Top Performers, and Drive Results. In writing the book, we looked at why individuals joined, stayed and contributed to the success of the organization. In addition to analyzing over 24 million survey responses (that’s a lot of data!), we had the opportunity to see a lot of great companies (and a few not-so-great companies), and how they addressed what we call “The Employee Experience.”
There was little controversy in what we found: a great employee experience leads to a great customer experience and strong organizational success.
One thing that fascinated me as we examined the research, particularly as we see an increased emphasis on employee perquisites in the workforce today, is the idea of perks and the role they play in employee engagement. It’s amusing, amazing, kind of cool, comical, sad and a bit mystifying, all at once, when I hear stories of company perks including laundry services, massages, dog walking, nap pods, foosball tables and Margarita Mondays. In our review of survey responses and hundreds of organizations, we ran across countless variations on the theme of perks. But, do they create engagement?
The short answer? No.
I love Taco Tuesdays as much as the next guy but organizations are missing the point (and value) of perks. It’s not the perk that adds value; it’s what the perk represents.
Consider a simple example from our book, MAGIC: Five Keys to Unlock the Power of Employee Engagement, to illustrate this point. Let’s suppose you find a person attractive. You’d like to get to know this person a little better, and finally get up the nerve to ask the person to dinner. You clumsily say, “I love your sense of humor, and I would like to get to know you better. If you don’t have any plans on Friday, would you like to join me for dinner, and then maybe catch the band playing next door?”
Okay, not the smoothest line, but I’ve been out of the dating scene for a while. The point is, you would stand a decent chance of getting a “yes.”
Now, consider this alternative request: “I think you’re attractive and funny. I’ll pay $100 to spend Friday evening with me.” Ouch! Not only is this approach more likely to get you a slap in the face than a date, you had also better hope the person you are asking out isn’t an undercover police officer. You may find yourself in handcuffs with some serious explaining to do. At the very least, you sound desperate, and the object of your affection is likely to be deeply insulted.
While both scenarios may end with the inviter spending $100 on the invitee, the first implies a relationship in which the invitee feels valued. The second scenario creates a quid-pro-quo expectation: “I’m forking out money, so you owe me.” Inappropriate.
So, back to the organization. Perks are important, but are often used to create a quid-pro-quo relationship. At the very least, they are often perceived that way. It’s important to focus on what perks represent. Health and wellness extras are typical of organizations where employees are encouraged to be their best and reach their full potential. Telecommuting and sabbaticals not only encourage a “whole person” view of the employee, they also promote autonomy, a key driver of engagement. Bonuses may be transactional, but they are also signals of respect and appreciation. Showing that a company understands and appreciates an employee’s home life is more likely than ever before to lead to an open, trusting, engaged culture.
A number of years ago, my boss called me into his office. I had been traveling extensively over the previous six months, doing not only my “day job,” but handling many of the personnel details of an acquisition. With a wife and four young boys at home, I was beginning to wonder whether things would slow down enough to see my family, as well as focus on my day job in training and development. As I entered the boss’s office, I was prepared for a discussion around how my training deliverables were slipping.
Rather than a deserved chastising around the need to re-focus on my organizational training role, my boss, who was the CEO at the time, thanked me for my work and commended me for juggling multiple priorities. Then he did something that still amazes me nearly 20 years later -- he handed me a substantial check which, for me at that time, amounted to just over 15 percent of my annual salary. As I looked at the check, I realize the name on it was not mine -- it was my wife’s!
As I looked up, he thanked me, telling me that this check was, indeed, a check for my wife. He then told me that he realized the past six months had taken a toll on my family, and that he recognized my family was at the top of my priority list. In addition to the check being a “thank you” for my efforts, it was a recognition that I had sacrificed family time for the company, and that this hadn’t gone unnoticed. My boss understood my relationship with my wife enough to know that the bonus would be used for my family, and that it would still be “our bonus.” He sent a not-so-subtle message that my work was a family sacrifice that couldn’t have happened without an effort on the part of my entire family.
Interestingly, later that year I also received a company bonus -- in my name, this time -- for the success of the project. That bonus was more than the bonus my wife received. The second check (mine) was spent and gone within days. That first check (probably spent in the same amount of time) continues to be an example to my family two decades later. What’s more, I doubt that my boss would disagree with the notion that, in terms of my loyalty and work, the first bonus earned a return of many times the dollar amount on the check.
If an employee feels that she is tied to the organization because of certain perks, she will feel that some of her choices are being taken away. If she feels that the perk is transactional, and is there only as a carrot, she will not appreciate the perk. She may, in fact, see it as coercive. It’s critical to recognize, then: Perks are important, but it’s what they represent that engages an employee, not the perks themselves.
As we researched our last book, it was clear that perks and rewards play an important role in the employee experience. However, those perks have a shelf life. They may create employee satisfaction (“I’m happy to be working here”) and play an important role in the hiring process, but they don’t create engagement.
There’s another danger in perks -- the “adaptation principle.” This is the concept that we reset levels of satisfaction by quickly adapting to situations until they become the norm. In other words, I become accustomed to having Taco Tuesdays at work, and I appreciate them. In fact, if you take them away I will start a rebellion, even though it is a nice perk the company offers me. But I don’t behave any differently because the company has provided me with a culinary Mexican fiesta every week. I have adapted. That’s the danger of perks; it’s going to take the addition of Fajita Fridays for me to get excited again. And, eventually, I’ll adapt to that perk as well… until another is added. And thus continues the perk cycle.
Within the employee experience, perks play a role. But, you can’t perk your way to engagement.