PERKS, PAY RISES
OR BOTH?
Understanding whether employees prefer perks or a pay rise can be
a difficult decision. Mina Pampus investigates.
R
egularly rewarding your team
is a key driver of employee
satisfaction and a big step
towards building an engaged
team. In fact, a study
released by Deloitte
suggests that in
organisations where
recognition occurs,
levels of employee
engagement, productivity
and customer service are
14% higher than in those
where recognition does
not occur.
It is widely accepted
that recognising and
rewarding employees
who excel is key to
building a motivated team.
The question is: which
rewards have the biggest
psychological effect?
SHOW ME THE PERKS!
With millennials quickly filtering into
the workforce, adapting to suit their
needs and requirements
has become of great
importance. With a
different outlook on life,
what millennials look for
in a reward is different
to any generation before
them. In fact, PWC’s
study called Millenials at
Work stated only 44%
cite wages as the most
important factor when
looking for a job. Their
preferences are having
an impact on others in
the workforce.
“When we
think about
how people
work,
the naïve
intuition we
have is that
people are
like rats in a
maze, only
motivated
by money.” *
The results speak for
themselves: Glassdoor’s
recent Employee
Confidence Survey found
that 79% of employees
would choose an increase
in benefits over an increase
in pay. Benefits can act as
a good alternative to pay
rises in many respects.
Millennials value a good
work life balance and
employers who take
this into consideration
will emerge with a
competitive advantage.
Pay rises have become
the default motivator of
our times because of their
measurable and tangible
36
nature. They have earned the reputation
of being a good motivator because they
are universally accepted and an easy
fix from a management standpoint.
Glassdoor’s report also revealed that
50% of employees were found to
actually expect to receive a pay rise in
the next year.
However, when a pay rise becomes
an entitlement, it can actually act as a
demotivator and this is a trend, that we
are seeing emerge. Perks as a reward
can come as a surprise to the recipient
and are thus a creative way to reward
employees, in a way that is unexpected.
Offering your employees perks that align
with their interests and needs shows
them that you are considerate of their
lives outside of the workplace, and will
encourage them to associate the value
of the benefit directly back to you,
forming an emotional connection.
MONEY TALKS
This isn’t to say that pay rises don’t
motivate employees. The criticism that
‘discounts don’t pay the rent’ is rife is
true: benefits should not come at the
expense of deserved increases to salary.
But what is becoming clear, is that
benefit offerings and pay rises should
enhance one another. The solution lies
in striking a balance; the two should
exist not only harmoniously, but should
serve to complement each other, too.
*Behavioral economist Dan Ariely (TED Talk:
What makes us feel good about our work?)