Expensive Employee Perks? Don't Waste Your Money.

Published 09/21/2020

The Perks You Provide Your Employees Probably Don't Work Like You Think



Extra time off, foosball or ping-pong tables, an on-site health club all sound good, but do they really entice employees to accept a job offer or stay once they’re on-board? Research shows that most incentives have limited impacts on employee recruitment or retention.


An on-site gym sounds great, but will you worry that your boss will be watching your time while your counterparts are keeping their noses to the grindstone? After that tough meeting, a quick game of ping-pong sounds like just the thing to relax – but what about the folks who weren’t in the meeting who are trying to work while you’re playing games?


If your employees are already putting in overtime or routinely working a ten-hour day, it’s unlikely that their spouse is going to agree with an extra hour or two spent at the gym while they’re home dealing with the domestic issues of the day.


Offering additional vacation time seems like a good perk, but, in the U.S. especially, it doesn’t work well. As reported by Eleanor Cummins in Popular Science – The office will never be the same, “Americans have always been terrible at taking vacations. In 2018, they left 768 million days of paid time off on the table. This is all in one of a few developed nations that doesn’t even guarantee paid time off (PTO) in the first place. The problem is only magnified by the pandemic: Even if workers took their days off, they’d have nowhere to go”.


Even if these perks are attractive, COVID-19 and the increase in employees working from home makes them of dubious effectiveness. In her report, Ms. Cummins adds “The percentage of employees in the US working remotely full-time rocketed from just 5.2 percent before the pandemic to roughly 50 percent at its peak in May”.


The tech world has been leading the way in devising new perks to lure and retain employees. Some of these incentives include sweeteners such as mini-golf, on-site laundry, in-office salon offerings, as well as gourmet meals. As reported in the same Popular Science article, “Even as perks have grown more common (and more elaborate) over the last few decades, many Americans have remained discontented with their jobs. Only 34 percent of workers reported they were “actively engaged” in their work, according to a 2018 Gallup poll. A full 13 percent were “actively disengaged,” and the rest fell somewhere in between.


It’s no surprise perks haven’t increased performance or engagement, says Neel Doshi, co-author of Primed to Perform: How to Build the Highest Performing Cultures Through the Science of Total Motivation. Most leaders “use various forms of sticks and carrots to create motivation to drive performance,” he says. This includes the traditional schemes, like raises for good work (a carrot) or the threat of firing for poor behavior (a stick). But it can also include more modern concepts, like guilt over making use of the company’s unlimited vacation policy or valet parking at the office. While the carrots are increasingly colorful, Doshi says “motivation is a lot more complex.”


Drawing on the work of psychologists like Richard Ryan and Edward Deci at the University of Rochester, Doshi identifies two types of motivators: direct and indirect. Direct motivation includes play (the things you naturally find fun), purpose (the ability to see your contributions have an immediate effect), and potential (the belief in a longer-term goal). Indirect motivation, by contrast, includes emotional pressure - think guilt or FOMO (Fear Of Missing Out), economic pressure (the desire to be rewarded and avoid punishment), and inertia (when you mindlessly keep going).


Many organizations are oriented around indirect motivators. That’s fine when all you need from employees is what Doshi and his co-author Lindsay McGregor call “tactical performance”—the kind of tasks that follow a script, keeping things simple and efficient. But if you need more of the quick-thinking, creative, and spontaneous work that Doshi and McGregor call “adaptive performance,” indirect motivators will destroy your employees.


Unfortunately, even when companies have tried to create a sense of fun or purpose, they’ve often taken an indirect approach. “To serve play, organizations give you a ping-pong table,” Doshi says. “To serve purpose, they give you a mission statement.” But play, purpose, and potential need to come from the work itself.


By continuing to focus on indirect motivators, no matter how cool, companies may be inadvertently contributing to a culture of dissatisfaction, high turnover, and burnout.


Instead of stocking a bar or installing scooters in the office, Doshi says they need to make sure that employees have jobs that are varied and interesting enough to excite play, feel purposeful enough that no one is easily expendable, and make everyone believe that they and the company are both headed somewhere big.


The pandemic may offer employers an opportunity to reorient workplaces around employees’ true desires. “Maintaining a life outside of work—that’s a real perk,” says Sweeney, the founder of Facet, a start-up connecting tech workers with industry employers. Everyone wants more flexibility in their schedules, both in the hours they keep and the places they can work from. Millennials want more benefits in the form of student loan repayment, reasonable maternity leave, and professional development, according to Gallup. And a survey of 1,614 North American workers found the number one “perk” is not free lunch, but natural light.


These motivators are a mix of direct and indirect. But all of them suggest that rather than playing foosball in the office after dark, employees want to go home at the end of the day with the resources and support they need to live their lives right.