Just Rewards: Reward Your Staff and Reap the Benefits

JUST REWARDS

Jamelle Wells gathered ideas for rewarding staff while working as a news and business editor and as a manager. She’s been editor of My Business Success magazine, and a features writer for several publications including My Money. Jamelle has worked for a number of media and government organisations, and is best known for her many years as a senior news reader, editor and business reporter for Radio 2GB and 2CH (the Macquarie Network). She’s currently a broadcaster for ABC NewsRadio and has an MA from the University of New South Wales.

JUST

REWARDS

Reward your staff and reap the benefits

Jamelle Wells

First published in 2004

Copyright © Jamelle Wells 2004

All rights reserved. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or by any information storage and retrieval system, without prior permission in writing from the publisher. The Australian Copyright Act 1968 (the Act) allows a maximum of one chapter or 10 per cent of this book, whichever is the greater, to be photocopied by any educational institution for its educational purposes provided that the educational institution (or body that administers it) has given a remuneration notice to Copyright Agency Limited (Cal) under the Act.

Allen & Unwin

83 Alexander Street

Crows Nest NSW 2065

Australia

National Library of Australia

Cataloguing-in-Publication entry:

Wells, Jamelle, 1963–.

Just rewards: reward your staff and reap the benefits.

Bibliography.

Includes index.

ISBN 1 86508 983 4

1. Incentives in industry. 2. Incentive awards.

3. Employee motivation. I. Title.

658.3142

Set in 12/14pt Garamond by Midland Typesetters, Maryborough, Victoria

Printed by Griffin Press, South Australia

10 9 8 7 6 5 4 3 2 1

For George, Charlie and Norman

Contents

Preface

1 How to choose the right rewards

2 Health and fitness initiatives

3 Family friendly practices

4 Cash bonuses and profit share

5 Community projects

6 Professional and personal development

7 Management style

8 Special events

9 Gifts and other non-cash benefits

10 A great work space

Bibliography

Preface

How you treat an employee, more than any other factor, determines their happiness in the job. And as the race to attract and retain the best personnel hots up, choosing the right rewards for your staff is more important than ever. Winning Australian companies are learning new ways to hang on to their staff. And it’s not all pay rises and bonuses!

This book outlines some of the rewards being used by Australian companies of all types and sizes. They’re rewards that range from a winning management style to family friendly practices, and health and fitness initiatives.

As a business editor and as a news editor, over the years I’ve come across inspiring examples of small companies who know how to reward their staff, yet the managers of small companies can be incredibly modest. Small business owners often say ‘we don’t have the big budgets to reward staff’—but as this book shows, you don’t need a big budget to recognise people for their efforts, because the best rewards can cost next to nothing at all.

What is evident is that employees who are rewarded for their efforts work harder and are likely to stay with a company for longer. Bosses who recognise the efforts of their employees are posting higher productivity and bigger profits.

We used to think of rewards as big pay packets and cash bonuses but those days are over. Global uncertainty, a string of company collapses and controversy surrounding big payouts to company CEOs has led to a winding back of cash bonuses. They’re still around, but they’re more closely linked to performance.

The rewards of today revolve more around family friendly workplaces, health and fitness initiatives, time off to do community volunteering and professional development. Pet days, lunchtime yoga, cafes and chill-out rooms, office car and laundering services, special rooms for sick children . . . bosses are finding better ways to keep their staff.

I’ve focused on Australian case studies and different examples of how smart bosses are using rewards to get results. While the main focus of the book is on interviews with employees and managers from companies with less than 1000 staff, there are case studies of larger companies as well. If you’re stuck for ideas on how to reward your staff, there are plenty of tips you might be able to adapt to suit your business.

In gathering information for the book I was struck by the extremes of how companies treat their staff in Australia. On the one hand there was the terrific generosity of a small business owner who organised surprise dinners for her employees and their families to thank the employees for their hard work. At the other extreme were the phone calls I received from one employee, who said their boss docked their pay by $4 for every toilet break. I’ve always loved listening to people who are passionate about their jobs and it was also refreshing to hear from a Kennards Hire worker who loved his job so much he persuaded his two brothers to come and work for the company. Also amusing was the tale of how when Virgin Blue airlines senior managers go out into the field to work alongside check-in and maintenance staff, there’s nothing the CEO enjoys more than throwing luggage around. Some companies can generate that sort of enthusiasm and passion in their workforce. We can learn from them.

Some of the rewards companies are offering staff have a distinctly Australian flavour. Like the Melbourne Cup Day functions, end of year parties on Sydney Harbour and yoga classes for workers at a mine in outback Queensland. There are rewards that are getting us recognised as role models overseas. Like the multi award-winning twelve level building MLC Financial Planning has rewarded its staff with in North Sydney.

Thank you to the employers, employees and other industry players who gave up their time for interviews.

Jamelle Wells

September 2003

1 How to choose the

right rewards

The idea of rewarding staff is not a new one. The most successful companies in Australia have been doing it for years, because they know that recognising the efforts of their employees gets results that range from increased productivity to higher profits. Employees who are rewarded for their efforts are more willing to go the extra mile for a company, to contribute their intellectual capital, and to stay around for longer. Staff who feel valued and appreciated are motivated and that’s good news for any company because motivated people can do a lot to contribute to growth and productivity.

Whereas once a big pay packet was thought of as the only way to reward employees, that perception has changed. So too has the notion that only large companies have the resources to reward their staff. Companies of all sizes have come up with ways to reward their employees that extend well outside the realm of salaries and cash bonuses. Many rewards don’t involve money at all, and if a reward is used the right way, it can achieve results, regardless of whether you employ 10 people, 100 or 1000.

There’s no one right way to reward a staff member because different rewards work for different people, according to their age and their individual interests. What particular rewards work for employees is likely to change throughout their life, and also throughout their career. However, the sorts of rewards employers are using are mostly tied to company culture. They are rewards that are influenced by the particular industry a company is part of, or by the ages and interests of employees. There are the rewards that are given for specific achievements or behaviours, such as meeting sales targets, coming up with a cost saving idea or attracting a new client. Then there are more general rewards given to say ‘thank you for working for this company, we value you as an employee’. These might include flexible work hours, time off to work on a community project or setting up a special work environment for employees. There are also workplaces that provide intrinsic rewards for people— that is, the good feelings they get from the work they do.

Rewards can be material or non material. Material rewards might very well include cash bonuses, profit share, gifts, tickets to events, holidays, prizes or superannuation top ups. Non material rewards might be time off to pursue personal interests, or organising a staff function or a special theme day once a month to boost morale.

Non material rewards might also include giving staff special training or projects to help keep their job challenging, broaden their experience and boost their worth in the job market. This is important because unlike our parents and grandparents, we no longer stay in the one job until we retire. Young Australians just making their way out into the workforce have witnessed a spate of company collapses and mass retrenchments both here and overseas. At home these collapses have included Ansett airlines, communications group One. Tel, HIH and FAI Insurance. Overseas there’s been the collapse of companies such as Enron. So young workers have a very different perception of company loyalty than that held by their parents and grandparents. While the younger age group is prepared to be loyal to their employer for a period of time, they’re increasingly asking ‘What’s in this job for me?’ and ‘What can I get out of it that will take me on somewhere else in a few years?’. Both men and women from this generation, sometimes referred to as generation X, are now choosing a more flexible lifestyle. Many new employees see their tenure as brief and want maximum return for a very short time. This view is a quantum leap from twenty years ago. There is even a perception held by some that if you’re in a job for too long, other prospective employers see you as stale, and not able to easily adapt to a new work environment or accept change.

Many Australians are changing careers quite late in life because they’ve been retrenched or they plan to retire much later than their parents did. Government think-tanks are constantly trying to come up with contingency plans for our aging workforce of the future. This aging workforce is also changing the perception of what a reward is. Employees are now asking for salary packaging which often involves an employer paying superannuation above statutory requirements, paying for income protection insurance policies for staff and contributing to health fund premiums.

Another big change in the Australian workforce is the large number of women who are leaving large organisations for smaller ones because they can’t break through the management glass ceiling of larger companies in some industries, or because they need greater flexibility to balance their work life with their family life. There’s also been a huge influx of employees from different cultural backgrounds, bringing new expectations about what a reward is.

Finding ways to keep good employees has become more important over the past two decades with people changing jobs more frequently. An employer is expected to pay employees a fair wage and to provide them with safe working conditions, and in return that employer is entitled to expect a fair day’s work. But to encourage people to more than just go through the motions, they need to feel respected and valued. Employees who take pride in what they do will not only contribute their ideas to the running of the business, but can also be an invaluable marketing tool. They can either enhance the image of the service or product your business provides, or they can discredit it. The saying ‘people like to do business with people’ rings true.

How many times have you not gone back to a shop or restaurant because you’ve received appalling service? We live in a society of choice, where many companies are vying for our business. Personally I don’t go back to restaurants where I have to trip a waiter over to get a menu, to shops where staff have no product knowledge, or to organisations where the person on the other end of the phone makes me feel as if my call is a huge inconvenience. Why should I, when just down the road there’ll be another organisation that also has a great product but can back it up with pleasant competent staff who provide fantastic service. Staff who feel recognised and rewarded can boost your reputation as a good employer, because they talk to other people in their industry about their job. Equally, staff who feel they’re being unfairly treated or never recognised for their efforts also talk, and news about bad employers travels just as fast.

Successful companies are also rewarding their employees because of the high cost of replacing them, and not just in monetary terms. When someone leaves, there’s the cost of advertising their job or going through a recruitment agency, the down time while interviews are being held and while the new person’s being trained. Not to mention the fact that staff who leave to work for one of your competitors usually take some of your customers with them. Then there are the indirect costs such as the stress it places on your other employees. If you end up putting the wrong person into the job, you usually have to live with them for a three-month trial period and this can create even more stress on co-workers.

Despite the many good employers in Australia, there are also those who expect staff to perform well, no matter how badly they treat them. There are also those who fail to pay award wages, those who break the law in relation to sick pay, holiday pay and maternity leave, and those who break anti-discrimination laws. Then there are companies who are simply petty in their treatment of people. I once had an employee phone me to report that their employer docked their pay by $4 every time they took a toilet break. An employee at another organisation claimed their pay was docked for having personal photos on a work desk. Yet the very same companies expect staff to turn up to work with buckets of enthusiasm.

By the same token there are other companies in Australia who have, over the years, retrenched large numbers of people due to restructuring, and have asked senior managers to take pay cuts, but have had initiatives in place to treat staff fairly and with respect in doing so. While money is important, it’s the day-to-day experiences people encounter at work that shape their perception of whether or not they are valued.

Most of the surveys conducted on the best companies to work for in Australia reveal some sort of link between preferred employers or ‘employers of choice’ and a healthy financial performance. One of the most comprehensive surveys has been conducted by Human Resource consultants Hewitt Associates in conjunction with the Australian Graduate School of Management and the Australian Financial Review’s BOSS magazine. For the past three years Hewitt Associates has sought feedback from hundreds of companies in Australia to come up with the results of the annual ‘Best Companies to Work for in Australia’ survey. The survey released in 2003 found that the best employers had 13 per cent revenue growth between 2000 and 2002 compared with only 7 per cent for other companies. The best employers also posted an average profit growth of 21 per cent in the same time period, in comparison to minus 44 per cent for other companies (Hewitt Associates 2003).

Over the three years the survey has been conducted, the researchers have also found some of the best companies to work for were often more likely to offer bonuses such as cash, shares, vouchers, or other forms of recognition for