Recently, John Lewis announced that it had cut staff bonuses to 6% of salary, the lowest rate since the 1950s. Co-Operative Bank, meanwhile, has been
Recently, John Lewis announced that it had cut staff bonuses to 6% of salary, the lowest rate since the 1950s. Co-Operative Bank, meanwhile, has been unable to pay its staff bonuses for almost a year.
There are many reasons why businesses may need to revise the financial incentives they provide for their employees. Decisions like these are obviously the prerogative of the employer, but organisations need to be mindful of the impact that such decisions can have on staff morale – and consider what alternatives can be offered instead.
We spoke to James Malia, Director of Employee Benefits at Sodexo Benefits and Rewards Services about his views in this area.
It’s about the day to day
Most employees value their bonuses not for the money itself, but for how it fits into their day-to-day living. By providing rewards such as discounted travel or in-work childcare, businesses can cut out the need for lump sum bonuses and at the same support greater staff wellbeing.
Without a doubt, a satisfied workforce will deliver significant benefits for a business, both in the short and long-term. In addition to higher levels of productivity and staff retention, employees are far more likely to strive for results when they feel valued and cared for by their employers.
Make it about the recipient
However, businesses that are thinking about making changes to their employee rewards scheme should keep two considerations in mind. Firstly, companies must ensure that every employee is motivated by the rewards that he/she is receiving. A fully-paid gym membership might appeal to a single fitness enthusiast, but may be less attractive to a working parent who lacks the time to take advantage of this benefit.
To address this issue, some companies are now offering multi-store gift cards as part of their benefits and rewards scheme. By offering a gift card that can cater for different preferences and tastes, businesses are effectively providing a reward that is unique to each recipient.
Is your strategy still relevant?
Secondly, firms have to ensure that their benefits strategy remains relevant. Fifteen years ago, many employees would have been pleased to receive a business mobile as part of their benefits package. Now, staff in many industries would take this as a given. Similarly, the offer of reduced-price yoga classes might have been met with confusion a decade ago. Nowadays, with staff wellbeing a key priority for many businesses, rewards like these are becoming increasingly popular. To ensure this level of variety, some companies are now using online portals or discount platforms that include many different rewards that employees can choose from. Not only does this approach give employees the power to choose a reward that they value, but it is also much easier for employers to add and remove rewards according to the latest trends.
By placing a greater emphasis on rewards that truly drive their employees to succeed, employers can fulfil their duty of care to existing employees and become an attractive prospect for talent outside of their organisation at the same time. With this approach, companies can begin to move beyond financial rewards alone, and instead build a creative benefits and rewards strategy that actively motivates employees their employees to go above and beyond the basic requirements of the job.