According to Korn Ferry Hay Group’s 2016 Salary Forecast, wages in the United Kingdom are set to see a 2.3% growth for 2016 - but could gift cards and rewards be your alternative- and can they keep your best employees motivated?
Whilst phrases like ‘biggest pay increase in three years’ are enticing for employees who have worked through an economy recovering from a recession, there are many employers who simply cannot increase wages to this rate, or at all.
With great employees on board, you don’t want to lose them to the competition, so if you cannot increase your salary base levels, you need to be creative in how you reward and retain staff. So where do you begin?
The news on pay increases will interest you if you’ve read into the Adams' Equity Theory. (Not part of your bedtime reading? Simply, this is the motivational model that shows that our perspective can change dramatically when we make a comparison with a 'referent' (people we consider in a similar situation).
Employees expect a fair return for what they contribute to their jobs, a concept referred to as the "equity norm". However the concept of what their equitable return is becomes warped after any form of social comparison. In short – if after a chat, you discover your 6 friends, who all do the same job, all get paid twice as much as you, then the wage which you were pleased with before the conversation will suddenly feel a bit rubbish, to put it in basic terms.)
So will your employees be calling a strike and demanding a 2.3% increase - and should they?
You may believe that pay is the number 1 incentive for employees, however there is a distinction between pay and the perceived benefits of pay. In short, it is not just the cold hard cash that people are motivated or demotivated by, but instead, what they perceive to be sacrificing for their pay.
A study from led by staff at the University of Northern Iowa suggest that a raise needs to be about 7 to 8 percent in order for workers to feel pleased about the increase and motivated to work a little harder. Another fact is that an increased salary can often increase happiness for the short term, whilst resulting in longer time focus on comparisons. The study ‘Rising Income and the Subjective Well-Being of Nations’ shows “if you are offered a pay rise, but you cannot increase your household material prosperity your overall sense of well-being is unlikely to be positively impacted.” In short, salary increases sound like they must have a scale – the more money in, the more happiness out – but in fact, unless the change is significant, it might not stack up against the ‘perceived benefits’ of pay.
To really have a workplace where people are motivated, even if a competitor is offering slightly more – you need to offer value.
This is where incentives such as the following all can be used.
• Flexi time
• Health benefits
• Memberships and L&D
• Gift Cards
• eCodes and Vouchers
• Performance rewards
• Service rewards
• Behavioural rewards
(Why not read our blog on 'Quirky Perks' for some more ideas?)
There are a multitude of other rewards and incentives you can use and as gift card specialists we have seen time and time again the positive effects of gift cards in the workplace. Consider the latest Mintel survey which showed that in 2016, people are spending any spare cash they have left over on dining out, Books/DVD/CDs, food/drink related special occasions, days out and clothing. Instead of giving a salary increase, you might see a rise in productivity from offering these as your own employee perks or incentives via gift cards.
The caveat? Whilst perks will make people less likely to look for a job elsewhere in the short term, ultimately employees they should be recognised with appropriate financial rewards and promotion opportunities as soon as is it possible to do so – gifts cannot replace the market rate for great workers and building a reliance on being ‘a great place to work’ if the equity norm perception has changed will eventually lead employees to feel they give more than they get from the relationship.
However, in the meantime, a few benefits can’t help but keep your workforce motivated, something that in turn can increase your success!
Giving gift cards- whether regularly or as a one off reward has never been so easy to arrange. SVM Global offers gift cards and eCodes for over 130 brands and retailers – all in one place and we can order to your office, or send direct to recipients via post or email. Call and ask to speak to a member of the team today or email firstname.lastname@example.org to discuss an ongoing gifting solution or to make a bulk order of gift cards.
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