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?

The Australian - The Deal - - Front Page - Read­ing: Work Rules! Las­zlo Bock, John Mur­ray 2015 Make sure your em­ploy­ees’ emo­tional needs are met, Su­san David, Har­vard Busi­ness Re­view July 8, 2014

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

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