If you read nothing else, read this…

  • Employee engagement surveys can help employers determine what really motivates their staff.
  • If employers measure staff turnover and retention rates, they could calculate whether the motivational benefits they offer are effective.
  • Working out the potential return on investment prior to implementing motivational benefits can save time, money and effort.

Employee engagement surveys can help employers understand what makes their staff tick in terms of motivation. But employers should bear in mind that calculating ROI needs to be a continuous process, not just an annual event linked to an engagement survey.

Cary Cooper, professor of organisational psychology and health at Manchester Business School, believes that employers should carry out calculations in three key stages. “Measure perceptions before the motivation begins, three months after, and six months after to see its effect,” he says.

The type of questions that employers ask their workforces in engagement studies is also significant. Cooper explains that open-ended questions are ineffective and counterproductive, while asking staff to rate their experience of a motivational benefit is vital.

Bill Alexander, chief executive officer at experience day and gift provider Red Letter Days for Business, says: “Employers should leave at least one blank space on a survey for staff to leave comments on. This gives organisations a call to action and makes employee engagement improve more quickly.

“Employers need to benchmark their engagement levels and find out where they currently are. There are a few questions employers can ask their staff to gauge their engagement, such as: ’Does your opinion in your place of work matter?’; ’Have you recently had a conversation about development in your workplace?’; and ’Have you received praise or recognition lately?’. They can then figure out what they are trying to change and do another survey to see the progress.”

However, William Smith, group reward and performance manager at Britvic Soft Drinks, says such surveys can be unreliable. “You cannot base employees’ genuine feelings about the place that they work on one particular day,” he says.

Ian Dowd, marketing director at NGA Human Resources, adds: “There’s always a difference between what people say motivates them and what actually does.”

Staff retention and turnover

To better understand whether their motivation strategies are effective, employers could measure levels of employee retention and turnover. It may also be useful to calculate the costs involved with losing a member of staff. Alexander says: “Work out recruitment costs and [employers can see how much a disengaged employee could cost. Employers need to bear absenteeism in mind because it reflects who is engaged with their place of work and who isn’t.”

ROI before motivation

Employers could make sure the motivational benefits are worthwhile prior to implementation, for example through staff engagement measurements.

Manchester Business School’s Cooper explains: “Employers need to ask themselves: ‘What are the outcomes I’d like to see?’ and ‘Why am I doing this motivation?”

According to 2014 EMEA Employee choice survey in benefits report published by Mercer Marsh Benefits in June 2014, 82% of employers in Europe, the Middle East and Africa (EMEA) cite the increased financial burden on their benefits budget as the leading barrier to implementing benefits, so it is important that employers ensure the schemes they offer staff are needed and wanted before implementation.

As Alexander says: “It is very difficult to work out return on investment, so many employers simply do not want to do it.”

But if employers do want to understand the ROI on motivation strategies, they should utilise employee engagement surveys, staff turnover and absenteeism figures, and cautious planning to calculate it as accurately as possible.

Graphic to come

Column: Employers must consider the type of return they want

Returns can be created through either income generation or cost avoidance, but in different businesses at different times, one of these might be more important than another. All employers should consider this when presenting the overall return on investment (ROI). For example, an employee engagement project might improve customer service (income), as well as reduce absenteeism (cost avoidance).

Many workplace benefits and projects will have elements that are more or less certain, so although assumptions will have to be used for some of the numbers, employers should try to stick to values that can be easily measured and supported.

Also, depending on whether a project will be considered on its own merits or be compared to other projects could mean the ROI will be considered in a different way as part of the decision process. Employers should also consider timescales; a high ROI that delivers returns in the future may not be as appealing as a lower ROI with returns in a year.

Different elements could be highlighted depending on who makes the final decision about the motivational benefits. For example, if the financial director has final sign-off, it might be more helpful to highlight the financial and commercial elements than present an HR argument.

Sarah Purnell is senior compensation manager at Lucozade Ribena Suntory

Case study: Kantar Worldpanel feeds employee motivation

Kantar Worldpanel motivates its 1,134 staff with a number of benefits, including a free lunch every Friday.

For example, on 4 September, employees enjoyed a traditional English roast betwenn 12pm and 1pm, followed by the rest of the afternoon off. The organisation is also planning similar lunches with Indian and Italian themes.

The market research organisation spends approximately £10,000 per month on these team lunches, which are a chance for staff to get together in a relaxed environment. Tim Kidd, managing director for the UK, Ireland and US, keeps track of the cost. “The time cost is pretty much nothing as employees seem to get their duties done by the time the lunch comes around and these lunches really feed into motivation and engagement,” he says.

Kantar also measures its staff turnover rate, which currently stands at 20%, using its holiday trading scheme, which it added to its flexible benefits plan in July 2015. “Only staff who are with us for at least the medium to long-term will use the holiday buy and sell benefit,” says Kidd. “They are not going to book holiday from work if they think they won’t be there in a couple of months.”

This year, the organisation spent £500,000 on refurbishing its decade-old offices. Kantar staff used to have their own desks, but now the office space has a more communal, agile feel with shared desks, hammocks, beanbags and tables around the sides of the office to help staff relax but also keep them together.

It also conducts two annual employee engagement surveys; one internally and one for The Sunday Times’ 100 Best Companies to Work For list, in which it ranked 67th in 2015. The survey found that over three-quarters (77%) of Kantar staff feel their job is good for personal growth and 67% feel they have a positive work-life balance.

Kantar also invests money in its LMC (Leads, Motivates, Cares) scheme, which asks staff to provide anonymous feedback about their managers, as well as upskill managers based on employees’ responses. This relates to Kidd’s philosophy that “business success comes from having motivated staff, rather than the other way around”.