The downsides of generous workplace perks
FOR many employees these days, the only fringe benefits they can hope for are decent health-care cover and a working coffee machine. Others, however, enjoy free gourmet meals and snacks, on-site gyms and nutritionists, house cleaning and nap rooms.
Upping the ante in what has been called a perks arms race is unlimited holiday time for some employees from companies such as Virgin, Netflix and the Ladders, while Facebook this year said it would reimburse its female employees up to $20 000 (R286 330) for freezing their eggs. Apple plans to follow suit in January.
More typically, extras often include paid maternity and paternity leave, on-site child care, flexible work hours and 100 percent paid health benefits.
Most of these incentives exist in the tech world or fields where there is competition to attract certain skilled workers. Nonetheless, even in those industries, some say there is little evidence that they motivate employees, and they can serve the more nefarious purpose of making sure employees rarely leave the office.
Gerald Ledford, a senior research scientist at the Center for Effective Organizations at the University of Southern California’s Marshall School of Business, said: “People in the rest of the country look at the Silicon Valley perks and think, ‘What wonderful companies to work for,’ The first thing to remember, though, he said, is “this is by far the most competitive job market in the country. It’s an arms race to come up with the jazziest rewards.”
Second, and more important, he said: “These benefits are not being offered out of generosity. It’s done because organisations want employees to work 24/7. If you never have to leave to get your dry cleaning, to go to the gym, to eat or even go to bed, you can work all the time. They’re golden handcuffs.”
Lotte Bailyn, a professor emeritus at the MIT Sloan School of Management, said that while some of the perks offered flexibility such as paid leave and options to telecommute, for example, it is “important to differentiate between those policies that give people more control over what they do and those that allow people to work longer and longer on site”.
One example, she said, is that of companies that provide care if a child is sick. “Well, the last thing you want to do is have a stranger stay with a sick child,” she said, but with that option, it is more difficult to request to stay home.
The same can be true of unlimited holiday time. It can be a good thing, by demonstrating that a company trusts its employees to make wise decisions. But “it all depends on the norms and expectations in the workforce”, Professor Bailyn said.
If taking time off is explicitly or implicitly frowned on, then people may use even less holiday time than under more formal policies, she said.
Even the newest benefit, reimbursement for egg freezing, has sceptics who say that while this could be a welcome choice for some women, it could also be seen as workplaces paying women to put off childbearing.
The companies, on the other hand, say the perks are all about making their employees’ lives easier.
SAS, a software company that employs about 7 000 people at its headquarters in Cary, NC, was ranked Number 2 on Fortune’s 2014 list of the 100 Best Companies to Work For in the US, right behind Google.
SAS offers free personal trainers at its on-site fitness centre, an indoor pool, hair salon, free on-site health care and work-life counsellors.
The benefits and culture as a whole help “minimise the stresses that affect employees every day,” said Jenn Mann, an SAS spokeswoman. “We want employees to be there on the first day of school or take an aging parent to the doctor. Life happens. SAS, in turn, is committed to reducing stress and distractions so that staff can do their best work.”
But do all these perks do what they are supposed to, that is, attract, retain and motivate employees?
Dr Ledford said while such extras might attract and even help retain employees, it did not show that it motivates them.
In fact, he said, some research shows that highly competitive workers are more interested in the individual rewards that they can receive for their performance than what goodies are available for everyone.
“Companies can be a lot smarter in how they spend benefit dollars,” he said, particularly those, unlike most of the hi-tech ones, that do not have deep pockets.
For example, offering fresh fruit and healthier food for employees seems a sensible benefit, he said.
One growing trend, micro-markets in workplaces, is responding to that need. Set up similar to those kiosks or markets available at airports – except self-service – they are modular units that provide snacks, salads, sandwiches and drinks.
While the meals are not free, the idea is that they are quick and relatively cheap. Workers scan a prepaid card or a debit or credit card to pay for their meals, or they can link their thumbprint to their preloaded card and simply scan that as they leave, said Jim Mitchell, the president of Company Kitchen.
So far, Company Kitchen’s operators, which function similar to franchises, have set up more than 1 000 micro markets around the country, with more than 7 500 for the industry as a whole, Mitchell said.
Another bonus? Employees can view their buying history on their computers and see if they are eating too much salt or fat. Companies can also do that for employees as a whole – without looking at individual workers, Mitchell added – so they may choose to drop some less healthy items.
The AMC Theatres corporate headquarters in Leawood, Kan, on the outskirts of Kansas City, had Company Kitchen install a micro-market last year when it moved buildings, and now about 500 employees and contractors use it.
The micro-market demonstrates how perks can have both a downside and an upside. Ryan Noonan, a spokesman for AMC, said that in the old building, he might walk to a nearby restaurant, which has the advantage of a short outdoor work break.
But if he did not eat out, he would either go hungry or buy chips or candy from the vending machine.
Now he can just run down a flight of stairs for fresh food.
While that may not rank up there with a free massage or housecleaning, being able to grab a salad and a fruit rather than a stale candy bar is one nice perk for most of us.