Incentives and motivation schemes are the natural answer, and the amount spent on them is staggering: according to Brett Howell Associates 2000 Financial Benchmarks, some 900 million was spent by UK corporates on non-cash incentives in 1999. The figure was compiled from the revenues of UK agencies that provide such incentives, and some in the industry estimate that the real amount spent is actually double if you take into account that many companies carry out their own schemes without involving agencies or consultancies. In the US, the comparable figure for the same period was $5 billion.
With this amount of money being spent, it would be fair to assume there is widespread recognition among informed HR directors across all sectors and industry disciplines that salary alone is not enough to motivate and in these days of fluctuating labour markets retain staff.
Yet, according to John Fisher, who uses Jamess statement as the opener for his book, How To Run Successful Incentive Schemes, there is a tend-ency in the West for managers to treat staff like single-cell organisms that respond in a predictable way to offers of more money. Everyone assumes that if only they could give their staff more money, then they would be more productive.
Unequivocally, this assumption is not true. According to accepted man-management theory (based on findings published by the famous social scientist, Frederick Herzberg), employees respond to hygiene factors such as security, pay, conditions and benefits.
These are called dissatifiers get them wrong and your staff become quickly demotivated. Motivator factors include personal growth, freedom to organise their own work and creativity routes. These are satisfiers get them right and you create staff loyalty.
Fisher argues that the Wests tendency to adopt a Victorian way of doing business leads staff to respond accordingly. He advises: The way to ensure a loyal and ever-improving workforce is to provide enough of the satisfiers, and then target specific, desired process behaviour through reward schemes.
The list of staff issues that can be tackled by satisfiers or staff benefits as they are more commonly known range from reducing absenteeism, encouraging higher efficiency and teamwork and increasing productivity, morale and recruitment, as well as improving budgetary control, safety, timekeeping and such.
Despite Fishers misgivings, managers in this country are learning exactly what turns their staff into more productive individuals.
The UK is still around five years behind the US when it comes to acknowledging that employers have responsibility for their staffs work/life balance and a duty to do something about it, says Penny de Valk, managing director of the UK office of Ceridian Performance Partners, which is US-owned. But as the labour market tightens up here, the UK is catching up.
Helping employees create a better work/life balance may sound a little like finding the Holy Grail, but the following are some ideas that can be and are used by HR directors to achieve just that.
Concierge services
In HR parlance, this is what is referred to as employee assistance programmes (EAP), but whatever you call them, they are becoming increasingly popular especially in the legal, financial and advertising sectors.
The service enables time-poor staff to book everything from plumbers and baby-sitters to travel tickets via one telephone call, and the key thing about this is that it is a corporate benefit for all the family in a way that private healthcare or company cars arent, says Tom Shorten, managing director and co-founder of the lifestyle management company, Enviego.
EAPs are perceived as costly and only for top-tier staff, but Shorten claims this too is changing. Those on a junior executive level are just as eligible, if not more so, and were finding that companies are starting to use the service for those earning 20,000-35,000. And in the US, these services are used as an attraction tool for young graduates.
Colm Gormley, senior interest rates options broker for the City firm, Eurobrokers, finds the service useful because it saves me time so I can be doing what Im paid to do. I can use the service for everything from booking football tickets to sorting out my dry cleaning one call does it all and if I moved, Id take it with me,he enthuses.
The dotcoms are taking this sort of incentive even further some are actually offering free membership to dating agencies as part of their incentives packages.
Recognition
Awards schemes operate in almost every organisation in some way or another, whether through end-of-year awards at the staff Christmas party or a scheme that runs throughout the year. Recognition works on a variety of levels theres Maslows theory that belonging to a peer group is a basic human urge and its a common need to rival and surpass others. Supplying fodder for these basic urges increases performance.
What drives employees who are already in the comfort zone is recognition by peers or management. According to Gill Hill, HR manager at the Forte Hotel Group, to be successful, recognition schemes have to be attainable. Having an employee-of-the month scheme thats attainable only to the high-fliers can disaffect and demotivate large numbers of staff, she says. Forte has been working on its XL scheme for the past four years and employees at all levels of the organisation across Fortes three main hotel chains are eligible. Silver and gold lapel badges are awarded and presented at a function where winners are made a fuss of. Winners also get a break or Forte Leisure Vouchers as part of the prize.
We call it the service/profit change. Weve used various ways, including training, to get our corporate message across, and the reward structure underpins the value of that message in our business, where customer loyalty and retention are paramount, says Hill. Where our staff are happy and motivated, that feeds back to our customers, and since we started the scheme, our measurement has shown increases in both staff and customer satisfaction.
Money
As you would expect, money is a thorny issue, especially on the motivational scene. According to research by Watson Wyatt (HR, December 2000), it is still the most important incentive, and Doug Ross, who headed the survey team, says paying more and in the right way can improve shareholder value by up to 3.7%.
Fisher disagrees, arguing that cash is the least successful way to get people to work harder or be more productive, especially for staff already in the comfort zone. When money is used as an incentive, UK managers are consistently disappointed by its lacklustre effect and there are more effective ways to motivate, he states.
Yet in the US, financial reward is used through avenues such as employee referral programmes (ERP) to attract new staff by incentivising existing employees. According to Jonathan Rice at the Boston-based advertising agent, ASRI, the amounts are staggering: Financial rewards are much greater here, in the technology arena particularly. Virtually every company, from Nortel to the latest start-up working out of a cupboard, has an ERP with significant benefits, he notes. Anything from $10,000 to a new Mustang Convertible can be up for grabs and some firms, such as Stratus Technologies, have opened up their scheme to the public. And by and large, these rewards are tax-free.
When it comes to motivating those who are in the comfort zone, US firms are offering vacations anywhere in the world, fully-expensed and, critically, without employees having to take time off as part of their precious holiday entitlement. Its a gift of time, as much as anything else, and this can also include concierge and cleaning services, says Rice.
Flexible working
Anybody who travels to work will know that one of the biggest stresses of the day is actually getting there.
According to Penny de Valk, managing director at Ceridian Performance Partners, the ideal solution for an effective work/life balance is a flexible working programme. She acknowledges that for a majority of firms, this is far from reality, but quotes Lloyds TSB as an experienced practitioner. The bank operates a very effective, flexible working scheme that incorporates part-time work, and job-share schemes as well as teleworking, and all that responds to peoples basic need to have some control over their working environment, she says.
Its not about working fewer hours, its about working different hours, which not only opens up the marketplace in terms of recruitment but also has a positive effect on retention, reducing absenteeism and morale.
Work environment
There was a time when this meant introducing a fish tank or rug into the reception area to meet the all-encompassing objective of creating a better working environment. Now it has become more specific and more accountable and it means understanding the needs of your staff to enable them to do their job, first and foremost.
Phil Hitchinson, creative director at the architects and workplace consultants, BDG McColl, says you have to understand the needs, expectations and aspirations of your workforce to create an effective work environment. Loyalty is geared around people having a great working environment, which means different things to different people. So you have to create a variety of environments that most people in the organisation need and to do that you have to ask them what amount of time they spend at the PC, in meetings and such, and design accordingly.
Staff benefits can include elements such as ATMs, a shop, a gym and so on. Additional benefits are services that make employees lives easier. BDG McColls solution for PricewaterhouseCoopers Brussels head office includes arranging for online shopping, where staff order what they want, and a refrigerated lorry comes to the office to deliver. BAs street environment at its headquarters near Heathrow also provides the same service.
Vouchers
These are the most common incentives, an easy and cost-effective alternative to money. Research carried out for Promotions & Incentives magazine in association with Leisure Vouchers shows that vouchers offering some sort of activity incentive are very high on the list of staff preferences, and this is where redemption is high.
But when it comes to addressing everyday work/life balance, childcare and to a lesser degree eldercare vouchers are becoming popular. Childcare vouchers have been around since 1989, according to Steven Stanburg, director of business development at the employee benefits voucher provider, Accor Services. They came about as an alternative to the workplace nursery which only one blue chip, HSBC, runs to any significant degree, even today. But more than 400 firms use childcare vouchers their one great financial advantage being that they are exempt from National Insurance tax that by law is applied to every other voucher, including those for eldercare. Accor already issues eyecare andluncheon vouchers, and on the stocks for the near future are dry-cleaning and transport vouchers.
The car
It was 60s man that elevated the car to the point where it was a measure of an individuals success. But according to Robert Winning, Shell UKs UK personnel manager, theyre merely part of the package now. Theyre still an emotive issue, and you still get certain levels who get a certain car, he admits. But firms are starting to think more creatively about how they offer this particular part of the package.
Bryony Beales, HR manager at Eastern Counties Newspapers, asserts that the motor is still very much a status symbol, certainly in field sales. Yet she admits that people are changing their perceptions of cars as a staff benefit, especially given the tax burden on both the employee and the employer.
Car allowances are more popular now, and options to trade up and down, as well as opportunities to buy your company car are also being introduced. Beales adds: We are looking at other ways of incentivising staff where cars are concerned.
Holidays and travel
Next to time and money, travel and holidays is high on the list of effective incentives. Tina Mills, director of the incentive travel firm, Landround, says they are effective because the perceived value of a travel incentive is much greater than the amount the employer actually pays. Our Choose a Cruise scheme costs 9, but has a perceived value of around 400, she says. She claims staff redemption on travel schemes is very high, and one of the only drawbacks comes with holiday schemes, which can be costly if you offer what staff sometimes expect an all-expenses paid trip.
Another angle is to do what the Sir Richard Bransons and Julian Richers of the world do take staff home to your country mansion for a few days. According to Richer Sounds recruitment and training director, John Clayton, theres no better way to instill loyalty. Staff turnover is less than 2% at the electrical retailer, well below the sector average. We have lots of different benefits, financial as well as things like taking all new recruits to Julians country home for their first three days of training. Julian also takes all employees who have been with the company for longer than five years away on holiday, and we have holiday homes that employees, at whatever level, can book when they want to. The belief is that if you look after people, they work harder.
Office layout
Whats motivational about the office? Just as the Morgan Lovells and BDG McColls have made a psychological study of the effect of the wider work environment on performance, so office layout is thought to have a similar impact on productivity.
Bridie Pullen, HR manager at the digital solutions consultancy, Razorfish, believes offices play a huge part in company culture. All Razorfish employees work in an open-plan office, presided over by the managing director who sits in the middle. This may sound nightmarish to some but Pullen asserts that for the agencys culture, it generates energy and greater productivity. We started as a small group and the open-plan office began then; as we grew, that evolved, but were now consciously keeping our environment open project teams sit near each other, theres constant communication and immediate feedback on ideas. Rather than creating a flustered environment, it energises the people who work here.
Most commentators believe that hierarchies, where the individual office is an emblem of success, are becoming flatter in all but the most traditional sectors and todays management wants instant access to their front lines, on the shop floor.
Not everyone agrees, however. In the Financial Times in January Lucy Kellaway refers to a Fortune report which included an item on Plante and Maran, a small accounting firm that had been rated the 10th best company to work for. And what has it done to distinguish itself? she asks. Each staff member is assigned an office (with a door) and his or her own desk and computer, says the magazine. Never mind the fact that some of us remember individual offices and desks first time around, says Kellaway. Offices doors are a fad I can relate to.
Listening
I hear you. Weve all heard and said this, but Jenny Rogers, a coach and executive director of Management Futures, doubts that many actually listen. An awful lot of organisations adopt the broadcasting route emitting information about the organisation without any effective route for staff to feed information back, she says. It may be unwitting but the consequences can be disastrous.
Rogers compares the NHS with Virgin Atlantic to prove her point. Virgin is a go-for-it organisation. People refer to Branson as Richard and Virgins people feel they can get direct access to management. Its not to do with money the cabin crew arent particularly well paid but they do have recourse to the top without any gulf and that contributes to an optimistic environment. As a result, Virgins staff turnover is 2%.
The NHS tells a different story, Rogers observes. Theres low morale, its not unusual for a local authority to have a 20% staff turnover and 15%-18% of staff off sick. There is a definite gulf in communication between nurses and doctors and management. These are the tell-tale signs of how effective communication practices in the workplace are.
And its not enough to give employees an arena to speak, or ease of access, to senior management: employees need to see how their comments or ideas have been acted upon, or communicated, advises Rogers.
Further reading
How to Run Successful Incentives Shemes by John Fisher, Kogan Page (2000)
