How 'Cool' Perks Land Business Owners in Hot Water

A happy worker is a productive worker, common sense says, but despite some studies that claim to reveal this correlation, over 70 years of research has not yet proved the axiom true.

Little wonder: It’s a tough thing to measure. These are subjective concepts, after all. What it means for an employee to be “happy” and “productive” changes from study to study and organization to organization. No single definition could ever fit all businesses.

We sat down with China Gorman, HR consultant and former SHRM chief, to discuss why entrepreneurs, when picking perks for employees, often choose the “bread and circuses” model popularized by Silicon Valley technology firms and the mainstream media.

Small business owners who offer these perks many times find, in short order, that keeping their workers happy requires more appreciation than algorithm and that workplace cultures decide for themselves what perks they find most appealing.

Same Perks, Different Meanings

Today’s big-business leaders are warming up to the idea that hiring and retaining talent is one of the best ways for companies to keep productivity high and avoid large dips in revenue, Gorman told us. If it can add even single year onto the tenure of its talent, a business adds a great deal of revenue to its bottom line, she suggested. The role of workplace perks, then, is to amplify the goodwill that keeps valued employees in their seats rather than looking for a larger paycheck elsewhere.

They may be onto something. Gorman suggests that multiple smaller perks, provided consistently, may buy worker loyalty more cheaply than equivalent rises in salary, that the spike of appreciation employees feel from receiving, for example, an $5,000 annual bonus can disappear within a month, whereas smaller perks received throughout the year keep motivation steady or even build it over time.

That doesn’t necessarily mean taking cues from whimsical, perk-generous cultures such as those at Google and Facebook, but it’s not hard to see why many entrepreneurs might think so.

“It’s human nature to say, ‘Bring your dog to work, wear flip-flops and shorts, have foosball games and free food,’ and that’s what makes workers happy,” Gorman said, adding that leaders infatuated with Silicon Valley-style perk programs may fail to understand why what works at big tech firms won’t necessarily work at companies in other sectors.

“They’re all going after the same talent,” she said. “When you talk to employees from those world-class company cultures, they feel like ‘these perks mean my leaders care about about me as a person and a human being.”

For those employees, most of whom are highly recruited tech talent, taking free food home from work means they don’t have to cook and can spend more time on personal projects. If their work takes care of their dry cleaning, they may have more time on weekends to watch their kids play sports.

By contrast, employees in other types of organizations, who hail from vastly different educational and demographic backgrounds, may have a different reaction. Free food and dry cleaning to them may suggest their employers expect more effort and more hours for the same compensation. Same perks, opposite interpretations.

Employees, then, aren’t so much motivated by perks as what they represent.

“Human beings have all kinds of needs,” Gorman said. “We have esteem needs; we need to be told from time to time that we’re doing good work.” Organizations that don’t say “thank you” enough will have difficulty obtaining talent and an even harder time hanging onto it, while those that do will consistently outproduce their competitors, she added.

Your Company, Your Culture, Your Perks

For entrepreneurs to decide what perks they should bring into their workplaces, they must look beyond what’s popular and rethink the fundamental economic relationships they have with their employees.

Start by forgetting the foosball table and instead ask employees what perks would help them the most. The answers you’ll may surprise you, says Gorman, as many of today’s workers will mention things that would have been unheard of only ten years ago.

Among them:

Scholarship money for their children’s educations.
Additional maternity and paternity leave.
Meaningful consultations with health care provider and insurance professionals.
Access to dedicated financial advisors beyond a few cursory meetings.

Perks Should Be an Expression of Care

Most importantly, entrepreneurs should never try to use perks as a way to mask an otherwise unhealthy workplace culture.

“That’s bait-and-switch,” Gorman said. “It makes it harder to attract great talent, and you have to pay more for it.”

Savvy employees won’t be fooled, anyhow. Thanks to employer reviews websites and other new technologies, applicants now have many ways of seeing what goes on at companies behind the recruitment window-dressing.

If, on the other hand, entrepreneurs are honest about their cultures and do their best to invest in employees, a few simple perks consistently given can add years to meaningful and productive workplace relationships. Just don’t tell that to Google.

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