If you want your employees to be at their best, it makes sense for them to have a say on their reward package. As a result, I believe flexible benefits are fundamental.
Importantly, flexible packages are a way for employers to show that they care about their employees by offering a range of relevant benefits and, where possible, negotiating advantageous group rates for, say, healthcare and critical illness cover.
Employers paying for a valuable benefits package must ensure that the options are properly explained. Pensions, for example, are both massively important and massively complicated, so organisations should make sure employees understand what is available and how they can get the best from the package.
But while financial reward is important and should be in line with industry benchmarks, other factors can be more influential. Employers are frequently unaware of low-cost ways of boosting employee engagement.
For example, management teams can legitimise and encourage the adoption of self-expressive job titles as a supplement to a formal job title. In this way, employees can highlight the unique value they bring to the team. This encourages them to reflect on the core purpose of their role, which can engender a greater sense of engagement and understanding.
Similarly, you can allow freedom within the ‘corporate frame’. Encourage employees to tailor aspects of their jobs around their unique skills, according to the needs of the organisation. This also encourages individuals’ ownership of their work, and can motivate them in way that financial rewards cannot match.
I also encourage managers to enable staff to meet clients or end-users to experience the impact of their work. This is irreplaceable in helping people to understand the purpose of their jobs – and hence the impact of their effort.
So, yes, flexible benefits are essential for today’s employer. But to get the best out of staff, employers need to look beyond financial rewards to build a sense of purpose.
Dan Cable is professor of organisational behaviour at London Business School.
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