Do employees value perks and incentives over pay rises?

Friday, 04 May 2012 12:10

Reward schemes can help to motivate staff

Reward schemes can help to motivate staff

Everyone would like to be paid more, which is why you will see even very well remunerated people asking for improved salaries. However, only an unwise business owner would seek to rely solely on pay rises to motivate their workforce.

Handing out wage increases on a regular basis is too expensive a policy for most companies to pursue and there is no guarantee that employees will engage with their job more just because they have a larger pay packet. In fact, there is evidence to suggest the opposite could be true.

A study conducted by the University of Leuven in Belgium found staff motivated by financial rewards were less likely to be happy at work and often had a negative attitude. Lead researcher Maarten Vansteenkiste concluded that rewarding workers only with material benefits "could be counter-productive for both the organisation and the employee".

Businesses keen to avoid falling into this trap need to evaluate what kind of perks and reward schemes would be suitable and affordable for them. Getting it right can result in improved performance by employees and a lower turnover of staff, both of which will help the firm to reduce costs.

Workers tend to respond best to incentives that help them to feel they have achieved something and that their contribution is valued by the company. The reward itself is not necessarily as important as the recognition it symbolises.

Major companies often run holiday incentives for their sales forces, with the best-performing staff invited to a week in the sun at a luxury resort. These schemes are beyond the financial reach of most organisations, but it is easy to understand why they work so well – they offer a high degree of recognition and a direct reward for personal achievement.

There are less costly alternatives that use the same principles. For example, you could offer your employees the chance to earn gift vouchers for high street stores in return for good performance. Whether you wish to reward improved productivity, better sales, excellence in customer service or personal development, the important thing is that you give your staff something to work towards and demonstrate to them that they are valued.

It is too much of a leap to suggest that workers prefer incentives to pay rises; after all, everyone aspires to a decent standard of living. However, it is clear reward schemes can play an important role in motivating staff and keeping your workforce happy.



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