Why your boss wants to give you a freebie
Free meals, massage chairs, haircuts, pets allowed: there are perks aplenty on offer in some workplaces these days, but are they more motivating than a good old pay rise?
companies, and not just multinational IT giants, are part of the trend to provide extra facilities in their offices, he says. One of Macquarie Group’s Sydney operations has cafes and bars in its building, he points out. But it’s mainly IT companies such as Atlassian that offer a wider variety of perks such as yoga, pool tables and regular time off for charity or voluntary work.
In his recent book Work Rules! Google's senior vice-president for people operations, Laszlo Bock, describes the array of freebies offered to employees: dogs at work, nap pods, gyms, doctors, and even washing machines, along with the free meals and snacks. A list shows some are low cost or free for Google to offer, but high-cost items include food and subsidised childcare. “All of these programs work to create efficiency, community or innovation,” he writes. The pay-off for the company was having a workplace where employees were more productive.
A set of perks as part of the mix offered to employees as well as salary can have a different motivating effect, Jackson says. In a way the perks replace money, and make you feel you have more balanced rewards. “And intrinsic motivation is being boosted” he says. “Pay is extrinsic motivation.”
But what appeals to one set of employees doesn’t always work with other cohorts, according to seasoned human relations executive Rhonda Brighton-Hall, until recently executive general manager of organisational development at the Commonwealth Bank. Employees on lower salaries, for example, would prefer more in their pay packet than having someone decide what benefits they get, she says. “They would rather the money than have someone tell them where it was spent. There’s a generation of people who haven’t seen these perks, but 25 years ago many businesses had a subsidised cafe, and then it went away. The offering of benefits that really excites people now is where you have freedom of choice.”
Most employees want to ensure they are being remunerated fairly and if the answer is no, then all bets are off with other benefits, she says. And savvy employees can check how much they are worth through checking similar roles on the internet – and make sure their manager knows too.
As well as fair pay, the other important elements are having meaningful work, such as including time for volunteering or charity work, and development opportunities that upgrade transportable skills. Tenure in people's jobs is much shorter now, says Brighton-Hall, and you need to feel when you leave a job you will be more valuable and have expertise that is relevant to the market.
Getting the mix right is about understanding which rewards are needed and are also practical. “People might expect free food if they go to a meeting but may not see it as a benefit,” she says. “We went through a stage (at the Commonwealth Bank) where we would put a list together and people could choose but that didn’t work because of tax treatment of benefits.”
And the impact on commitment – or engagement – levels was also important. With the amount of employee data large companies have available these days, there was a lot more latitude to survey employees. “Even if people vote for lunch as an enabler that doesn’t correlate to higher engagement. It’s about ‘is my boss any good and am I being developed?’ They are by far bigger elements in engagement,” she says.
Increasing motivation levels to boost productivity has been a management obsession for decades. It’s long been accepted that fundamental human needs can be divided into strict categories using the famous Maslow hierarchy. But some experts believe the well-known pyramid has been interpreted too literally – a concern of Maslow himself, according to US psychologist Susan David. Maslow didn’t even come up with the pyramid in his original 1943 article on motivation, she wrote in the Harvard
Business Review last year. Created in a subsequent textbook, people latched onto the diagram immediately but forgot about the notes Maslow made about “the dynamic messiness of human motivation”, says David. The idea that we move from having basic needs met such as food and shelter, through pay, and then move to a demand for higher purpose doesn’t apply to the world of professional work, she adds. Salary and benefits can enhance motivation but other factors are just as important. “A motivation checklist would be nice. But we’re not working with a fixed or universal process. There are many factors that contribute to engagement, including teams, autonomy, interesting work, recognition and individual recognition,” David writes.
And you certainly need to keep shaping the perks, Jackson points out. “If everybody feels we always get a free lunch, does it get seen as an expectation? There’s a cycle through which organisations go. Rewards mean different things to different people. You have to pay your bills and so much of the modern world depends on how much you earn and I think money does count. But some people will appreciate money, some prefer perks and some like a way of tying you in through shares in the business.”
Many HR practitioners now work with lots of information and don’t apply a standard approach to the entire workforce, Brighton-Hall says. “I think people still talk about the hierarchy of needs as though it’s an authoritarian voice but without a real understanding of what it is. In business it’s been down to developing insights based on real feedback and building up things that matter.” That also means taking into account the cultural factors, she says.
What makes sense in a Silicon Valley IT firm with employees in a younger age group may not apply in a bank in Australia. “Perks that keep people tied to the workplace – I don’t know if it’s a long-term sustainable way of running a business. I think people like some space between their employer and their life. I think it’s more important now that people get to control how they work, and they don’t want to ask permission. I do think the idea of the work you do being valuable and useful is so obvious but we haven’t talked about it for a long time.”
There’s a difference between benefits that make workplaces more welcoming and the ones that end up tying you to your desk, particularly as flexibility becomes a hot topic, Jackson says. “More and more people are working from home but management still likes to have control and see what we are doing, when and how we do it. But people will have to give that up in the future and concentrate on results.”
Google’s Bock rejects the idea the perks offered are designed to keep employees shackled to the desk and claims the company focuses on outputs, not where you work. And it’s not just IT companies that can offer the same deal, he claims, as other organisations will find many of these perks are inexpensive. Fears of things going wrong or rising expectations from employees were mostly unfounded.
There’s no single or simple answer to motivating today’s tech literate and job-hopping employees in a knowledge economy. Theorists and practitioners alike see little use for the strict hierarchical thinking of the past and a need to blend rewards and formal pay to match current expectations.
But there’s a well-worn rule that still holds true – there’s no such thing as a free lunch.
“If everybody feels we always get a free lunch, does it get seen as an expectation?” Chris jackson, professor of business psychology, UNSW of Business