Employee benefits: Don’t put your money where your mouth is

October 13, 2016 Geoffroy De Lestrange

Motivated employees are not only more loyal; they are more productive.  But how should companies best approach employee benefits and rewards?

Money is not necessarily the answer. You would in fact do much better to order your employees a take-away pizza to motivate them. At least this is what new research from Duke University revealed. When factory workers in Israel were all promised different rewards, money was shown to incite the least motivation. Surprisingly, employees who were offered no reward at all were in fact more productive than those who were offered money.

Why does money no longer motivate employees?

The nature of the workforce is changing and how they are rewarded needs to as well.

We now live in an age of instant gratification, and when it comes to rewarding employees, they expect no less. Employees receiving an annual bonus in December for a great piece of work that they did back in March makes the reward irrelevant. Employees may not even remember what they did to deserve that bonus.

Great work should be rewarded continuously so that employers improve motivation levels and boost morale throughout the year and that productivity remains consistent as well.

Are the alternative benefits any better?

Apart from the annual bonus, the most common office perk is free food. We all love the office biscuits, the introduction of donut Fridays or the monthly office burger lunch. The promise of pizza has now been scientifically proven to boost employees’ motivation. However, this short-term motivation does not equal long-term gain (apart from perhaps employees’ waistlines). Research has revealed that these kind of office benefits are actually diminishing employees’ wellbeing. Not what employers intended.

So, what are the best ways to motivate your employees?

Employers can still offer perks which have some sort of monetary impact, such as insurance or gym membership contributions. These offer more continuous recognition of employees’ hard work.

If your company does not have the budget for this, there are more creative and often far more effective ways to compensate your employees.


A lack of employee development is noted as a major reason for employees to quit their jobs. Our recent survey with IDC, which interviewed 1,352 HR professionals and business managers revealed career flexibility to be one of the greatest influences on employee ‘happiness’.  If employers ensure to provide opportunities for formal training and on the job learning, employees will not only stay but also be more productive. Managers and HR need to work together with employees to create proper development plans, including long-term opportunities for progression and internal mobility.


The IDC survey also demonstrated the clear correlation between employees working together and company productivity. Social learning improves employee engagement, performance and the achievement of both personal and as a result organisational goals. Companies need to encourage and enable their employees to share knowledge, learn and work together.

Work life balance

Providing your employees with flexibility and the option to work when and as it suits them. The possibility to work from home if they have a sick child to care for, or simply to receive an important package. It all makes employees feel valued and that you care and can cater to their needs.

The simple things

In the end, the best reward for employees is a metaphorical or even a physical ‘pat on the back’. Simply saying thank you. This should not only come from managers but also from colleagues. Recognition from peers has been shown to have an even more positive effect on employee engagement and productivity.

So, next time someone in your company does a great job, make sure to let them know. 

About the Author

Geoffroy De Lestrange

Product Marketing & Communication Director EMEA at Cornerstone OnDemand

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