The importance of employee benefits and rewards in every workplace

Employee benefits

An effective employee benefit is one that allows the employee increased access to resources and services that reduce the energy they spend on overcoming difficulties and therefore make their lives easier!

An employee assistance program, or EAP, for example, gives greater and easier access to therapists and psychologists that reduce the employee’s mental workload. That could be in the form of teaching them stress management techniques to use at work, or helping them navigate, build, or repair personal relationships outside of work (amongst many other things).

Flexible working, parental leave, additional superannuation contributions, and other common policy-based benefits all contribute to the bigger picture of employees balancing work and life.

Other benefits, that are not as heavy on policies, include things like discounts that support financial health, access to wellbeing resources (for example, gym memberships and meditation apps), personal and professional development resources, and various perks that cater to all interests, lifestyles, and living situations.

Overall, employees just want things that make life easier! We conducted a survey asking employees what they want most from their employers, and the overall trend was many small things every day that add up over time.

While it’s good to run campaigns to drive awareness and usage of your benefits, for example celebrating Ride2Work Day and encouraging physical activity, benefits have the most impact when they’re easily accessible and redeemable at any time. Having a digital home for all your benefits and perks is essential to ensure your employees know what is actually available to them and how to access it.

Why should all companies offer employee benefits?

While some people hold firm to the belief that a salary should be enough to satisfy an employee, if you were an employee and looking for a job, and got an offer for two roles that were exactly the same in every way, except one company offered a few small benefits (let’s say a team social day once a quarter), which one would you choose?

When you’re presented with an objective choice between the bare minimum and slightly above bare minimum, you’ll always pick the second option.

Benefits are part of an organisation’s Employee Value Proposition, or EVP. An EVP is essentially why an employee should work for you instead of your competitor. Offering a few benefits that are within your capabilities goes a long way to making you an employer of choice.

Larger businesses have more budget and resources to build out a host of high impact benefits and additional perks, but that doesn’t mean small businesses can’t too. Flexible work, pets in the office, and even matching superannuation contributions up to a certain amount are all things that small businesses can do.

Using benefits as an employee retention tool

Once you’ve attracted the talent, it doesn’t stop there. Many business owners agree that retaining employees is even harder than hiring them. With the right mix of benefits and perks, your employees will be healthier, happier at work, more productive, and more willing to go above and beyond in their roles.

When the cost of hiring a new employee can be up to 2.5 times as high as the salary of the position itself, it’s cost effective to invest in benefits that work to retain employees.

One such benefit is learning and development resources and budgets. Employees who feel they’re progressing in their careers are 20% more likely to stay in their role, so it’s important to have career progression plans as well as personal and professional skill development.

Reward and recognition

According to Tuckman’s Five Stages, all teams are constantly cycling through the stages: forming, storming, norming, performing, and adjourning. No matter the team, they’re all going through this cycle, and they will always restart it. Restarting the cycle could be triggered by a team member entering or leaving the team, the start or end of a project, unexpected obstacles, or a change in leadership.

In some stages, like performing and norming, where the team is stable, salary and positive team relationships may be enough to motivate employees. But that’s only 40% of the time. For the remaining stages, there’s instability and conflict. These stages can’t be skipped or avoided, but you can speed through them if you plan right.

During these unstable stages, positive reinforcement of attitudes, behaviours, and contributions will speed you through them. By focusing on what your employees are doing well, you can clearly set the direction of where you are and where you want to go. You can do this by using a strategic recognition program, and highlighting behaviours worthy of a reward, signaling to your team to never accept defeat or mediocrity.

When should rewards be given to employees?

In our example above of an employee building a process to prevent mistakes, a reward could be appropriate depending on the mistake and the employee. Is this display of leadership new for that employee? Is it a skill they have only recently learned and you’d like them to continue developing it? Will this process save the organisation time or money? Did catching the mistake save the team from a major setback?

If the answer is yes to any of those, then adding a reward would be fitting. It’s up to you what constitutes that reward — it could be buying the employee a coffee, a gift card to their favourite store, a mentoring session with your CEO, or an extra day off.

Note that although our example uses a single employee, rewards and recognition can and should be sent to teams as a whole, too. Group achievements, collaboration, cross-communication, and achieving targets are worth celebrating together!

Again, it’s important to be explicit about why the reward is being given. Making the recognition and reward public helps to set expectations in other employees about what level they need to reach in order to earn rewards.

How is a recognition program different to saying “good job”?

Your recognition program should include a definition of what constitutes and deserves recognition. For example, a team member quickly fixing a mistake is definitely deserving of a “thank you” and a “good job”, however, a team member that spots a mistake and then documents a process on how to avoid making that mistake again in the future and educates their team members on it deserves a more formal recognition.

For recognition to be viewed as different to a straightforward “thank you”, it needs to have a different structure.

Here at Perkbox we recommend that a formal recognition is recorded in a dedicated space, and includes a message stating why it was given, and where applicable how it links to the organisational mission or company values. Other employees should be able to access these recognitions so they can see what is and isn’t deserving of receiving recognition.

A weekly or monthly round up of recognitions that have been sent is an easy, quick, and simple method to capitalise on them. Here at Perkbox, we do a weekly shout out (in our whole-team meeting, but you could also do it in an email or newsletter) for both the employees who gave recognition and those that received them.

What makes a ‘good’ reward?

If you were to receive the same gift on your birthday every year, you’d be sick of it pretty quickly. You might even start to anticipate it, make jokes about it, and eventually you actively dislike it. Employee rewards are the same.

For an employee reward to be effective, or ‘good’, there’s a few boxes they need to tick;

• The size of the reward needs to match the size of the achievement
• The reward itself needs to be seen as desirable by the employee receiving it (AKA personalised)
• The reward needs to be delivered on time - no belated birthday cards!

The size of a reward can be varied, and does not always have to have a budget attached to it. Starting small, it could be buying a coffee for the employee. Here at Perkbox Australia we run weekly polls with different themes and the winner gets a coffee a day for the following week — that’s less than $25 a week, and spreading it out means the behaviour is reinforced each day.

Larger rewards can be gift cards to retailers that are relevant to the employee’s current life. If they’re doing a home renovation, then $50 at a hardware store will be very much appreciated. Cinema tickets are great for employees with children and for younger employees who enjoy going out. Other ideas are meal deliveries, event tickets, and even the basics like groceries.

There’s also the non-monetary rewards. These are far more meaningful than any other type of reward, but can be difficult to think of. The exact reward really depends on what your business can offer, but some great starting points are;

• One-on-one mentoring sessions with the CEO
• A sleep-in, early leave, or extra paid days off
• The ability to choose or influence the next team event
• A priority parking space
• The ability to shadow a senior employee (of their choice) for a day
• Speak to them about a implementing something they would like to see the business embrace, for example supporting a charity
• Allow the employee to attend an event or meeting they usually would not be invited to

Reward and recognition is a proven motivator

Employees that report having a reward and recognition program at work have high employee experience scores. Higher employee experience scores are linked to higher performance, higher mental resilience, and higher financial outcomes.

35% of employees in a post-covid19 study cited recognition as their number one ask for employers. The same study found that one in three employees hadn’t received recognition in the past six months — a shocking finding!

However, the positive effects of receiving recognition last roughly one week, so it needs to be an ongoing effort.

Perkbox provides employee benefits, rewards and recognition all in one easy-to-use platform. To take your employee experience to the next level, learn more about the Perkbox platform and request a demo today!