In this tough economy, many companies are looking at other ways to reward employees besides the traditional raise. A new article makes ten distinct suggestions, but will these increase productivity or just damage morale further?

Published by the Fox Small Business Center, the piece explains:

Millions of companies simply cannot afford to give their employees raises or bonuses at this time, regardless of how much they may deserve one. But, that doesn’t mean you can’t show those employees that you care and appreciate their services.

“Not giving out raises can have a real negative impact on employee morale and motivation. You may even lose some talented individuals,” explains Dr. K. Habib Khan, Chief Academic Officer and acting Dean of the School of Business at Stratford University. “But if you still take the time to show that you appreciate them during this rough economic time, they will be more likely to hang in there and remain dedicated and loyal employees.”

All of this sounds perfectly reasonable. However, take a look at the proposed “rewards” (emphasis added):

1. Provide additional paid time off. Even if it is just one or two days out of the year, it will be appreciated.
2. Give them the ability to have a flexible schedule. Many people would appreciate being able to work four 10-hour days per week, or working one day per week at home.
3. Allow a casual dress code, even if it is just one day per week (like casual Friday).
4. Provide a catered lunch or pizza party once a month.
5. Celebrate each employee’s birthday with a cake and gift card.
6. Once a month have everyone’s car washed on-site by a mobile wash company.
7. Periodically, bring in a massage therapist to provide everyone with a complimentary chair massage.
8. Keep stashes of things to occasionally give away to those going above and beyond the call of duty. This could be gift cards, concert or event tickets, or health club memberships.
9. Set up a relaxation or recreation roomwhere employees can de-stress and/or have some fun. You may want to include a TV, pool table, or an air hockey game.
10. Offer them a title change, even if you can’t afford to pay them more they appreciate being able to have a new title, which will provide them additional benefits for years to come.

Imagine for a moment that you are an overworked, underpaid employee in a difficult economy. (This may not be hard to imagine.) Don’t most of these ideas sound patronizing at best? Take a look at the breakdown of items below:

Suggestions #3 (“casual dress”), #4 (“pizza party”) and #9 (“rec room”) sound as if they came out of a kindergarten classroom. Items #1 (“more paid time-off”) and #2 (“flexible schedules”), merely remind employees that we don’t trust them enough to manage their own time.

A birthday (#5) is not a workplace accomplishment, so celebrating with a gift seems inconsistent with giveaways for “going above and beyond” (#8). In either case, science has confirmed that rewards are the worst technique for motivating people.

Idea #6 (“car wash”) and #7 (“massage”) seem more reasonable. These are probably routine maintenance tasks that employees would pursue anyway, so having the company provide the service is a perk. However, there’s still an implied debt. It’s almost as if employers are saying Since we washed your car and took away some of your stress, you can work a few a more hours.

Unquestionably, however, the most troubling suggestion is #10 (“give new titles.”) Printing up new business cards when business is struggling is like rearranging deck chairs on the Titanic. Individuals won’t see this new title as a reward, but an insult.

Perhaps most surprising is that practically all ten ideas will actually reduce productivity. After all, suggesting that employees stop their work for a birthday party, a pizza lunch, a massage or additional time off will reduce the amount of time they can spend actually working.

Don’t worry about rewarding employees. Instead, focus on respecting employees. The best way to increase productivity and loyalty is to ensure people know how much you trust in their competence and creativity. Don’t belittle their efforts. Let them work. For more ideas on how to empower employees and develop more stakeholder satisfaction, contact Slaughter Development today.

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