All parts of reward carry messages, either explicit or implicit.
While considerable attention is given to the extent to which money is a motivator (my view is that for the vast majority of people, it is not), little is said about the role of benefits in employee motivation.
With the money spent on salaries and bonuses normally dwarfing the cost of benefits, they are often overlooked. It is pretty common to find a patchwork of benefits that have grown up over time with little strategic intent or examination of the messages they carry or the impact they make.
While I do not see benefits having much of a role in motivation as such, I do believe they can play an important role in building, or damaging, engagement. The range of benefits and their design can say a lot about the values of the organisation.
As Shaun Tyson, emeritus professor of HR management at Cranfield University School of Management, says in Human Resource Strategy, published in 1995, ”Monetary rewards may not motivate in the long term, but they certainly symbolise the value that corporations attach to specific behaviours, for example rewarding long service, interpreted as loyalty, or rewarding performance above other attributes.”
Align with employer’s values
Because benefits carry messages about what is important in the organisation, they need to be thought through so that they align with what the employer says it values. If not, they will simply generate confusion between what may be seen as the rhetoric against the reality, and this conflict between the desired culture and the design of reward programmes can contribute to disengagement.
A good example is employee service versus contribution.
Very few businesses espouse length of service as a value; rather, they talk about contribution, teamworking, customer focus, and so on. Yet, particularly with the constant changes in technology, experience built up in another organisation can be more valuable than that built up within this organisation. But it is common for benefits to increase with length of service, and so carry the message that service itself is valued. If such misalignment exists, it needs to be reviewed and, if possible, fixed.
As styles of management have moved from the old command-and-control model, organisations want to encourage contribution from all staff with less of a hierarchical and directional approach. Because benefits can be more visible than an individual’s pay, it may be particularly important to consider the alignment of benefit eligibility with this culture. Moving to single-status benefits, or at least reducing the number of differences by grade, can reinforce this value.
Traditionally, benefits packages have been fixed and imposed on employees, reflecting a somewhat paternalistic culture. But organisations have flattened and sought to push accountability to those closest to the customer, giving them more flexibility in their decision-making.
The old traditional benefit model no longer fits this culture and could be a source of disengagement. One of the messages that flexible benefits carry is that they treat employees as adults and respect their ability to make their own decisions on the benefits they want. So a move to flexible benefits, particularly in this context, is likely to improve engagement.
A potential source of disengagement is employees’ perception of their reward package, rather than the reality. This may mean how competitive it is in the market and/or the value of the benefits on offer. So it is critical to spend time to explain both really well. This may be done by emphasising total reward using total reward statements, or introducing flex. But whatever the approach, upping the communications as well as the design is likely to pay dividends.
Michael Rose is director or Rewards Consulting and author of Reward Management, published by Kogan Page