Trust vs treats: Why perks are not the motivator

by FM Media
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Creating a great workplace doesn’t mean spending money on perks, says ZRINKA LOVRENCIC, managing director of Great Place to Work Australia.

 

The most common objection we hear from senior executives about transforming an organisation into a great workplace is ‘we don’t have the budget’. At first I did not understand the connection between engagement and budget, but as this excuse surfaced time and time again, I realised that executives have been conditioned to think that engagement equals perks.

Yet this outlook, which seemed to me irrational at first, is somewhat plausible once we consider the factors at play. Australia has been experiencing labour shortages for some years now, with no solution in the foreseeable future.

Organisations face the challenge of retaining talented people amid fierce competition for talent and, when it comes to attracting new talent, we seem to revert to increasing salary in a bid to outbid other interested organisations. Managers see motivation in terms of the size of the compensation. Media constantly talks about perks being what employees are after, and those emails about the Google head office restaurants keep on making the rounds.

Finally, non-financial ways to motivate people require more time and commitment on the whole from senior managers, so we turn to perks as a less taxing solution.

There could not be a better time to reinforce more cost-effective approaches. The traditional role of money as the dominant motivator is under pressure from declining margins, sagging stock markets and increasing scrutiny by regulators, activist shareholders and the general public.

Unfortunately, we have over-complicated yet another aspect of our organisations. A light bulb moment for me was at the 2011 Great Place to Work conference where Ernst Lieb, then president and chief executive officer of Mercedes-Benz US, opened his presentation about what makes Mercedes-Benz a great workplace by stating, “I am sorry but what I am about to share with you is just common sense, sadly we have forgotten how to use it in the workplace.”

ESTABLISH TRUST

Over the past 30 years, Great Place to Work has been surveying employees and analysing workplaces worldwide, with two objectives in mind: to find out what engages employees and to determine what they consider to be the issues that make their workplaces great ones.

Looking at employees from companies irrelevant of industry, location and company size, we have found that the magic ingredient for improving employee experiences, heightening their sense of pride and reinforcing levels of commitment is trust, not treats.

Trust is established through genuine relationship-building and caring for employees as people, not cogs in the wheel. High levels of trust are sustained when companies provide their workforce with unique, useful and all-inclusive programs that address employees’ needs as individuals.

The good news is that every company already has the means and capability to develop and implement practices that increase engagement, productivity, creativity and risk-taking. Such increased commitment on the part of employees yields high returns and contributes to a healthy bottom line.

MAKE WORK MEANINGFUL

Often when holding focus groups to get to the core of the factors creating a poor workplace, we hear complaints about how employees do not find their work meaningful anymore, how they feel that management is too focused on increasing profit and that no one values their input or communicates with them on the company’s mission.

Recognition from immediate managers, leadership attention and a chance to lead projects or task forces are more effective than cash bonuses, increased base pay and stock or stock options. A recent McKinsey survey revealed that the top three non-financial motivators play critical roles in making employees feel that their companies value them, take their wellbeing seriously and strive to create opportunities for career growth. These themes recur constantly in most studies on motivating and engaging employees.

But, why is finding meaningful experience at work so important? When employees find meaning in their work, that their input is valued, they feel a sense of ownership. Their work and their progress has personal significance to them, and they take accountability for its success.

When people take ownership of their work, they become more motivated and more committed, and that eventually results in a better performance for the organisation as a whole. This can be achieved via management placing importance on communicating the mission of the organisation and sharing the organisation’s goals. All employees, regardless of position, need to understand how their role contributes to achieving the company goals.

Additionally, senior leadership needs to lead by example and model the company values in the manner in which they behave. Finally, it is important to align the organisation’s external and internal brand proposition. If we are selling to our customers that our products are cutting edge, but internally we don’t offer avenues for sharing of ideas, then we cannot expect employees to feel connected to the company.

FOCUS ON RECOGNITION

To inspire thoughtful discussion about what motivates employees, management needs to place the focus on recognition instead of reward. One-on-one meetings between employees and their leaders are hugely motivational as they encourage a sense of worth in employees.

It is a great opportunity to raise any concerns that the manager or employee may have, work out what the employee’s goals are and how to align these goals with the organisational goals, as well as offer one-on-one feedback on performance.

The only sort of perks that are successful motivators are the ones that have a strong link to the organisation’s mission and values. Whether you wish to thank your employees for going above and beyond the call of duty, whether you use them as caring initiatives such as healthy snack options, or whether you want to motivate your employees to keep trying harder, ensure that your perks are aligned with your organisation and the employee brand proposition.

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