Friday, October 10, 2008

Here Come the Non-Cash 'Incentives'

With stock and bond prices cratering and the global economy spiraling into what could be a severe recession, employers expect to have less cash to dole out in bonuses and future paychecks. That's leading such blue-chip firms as Goldman Sachs to scramble for alternate avenues to maintain morale and retain staff.

"What kind of non-cash rewards can HR promote during such a market downturn?" a vice president in Goldman's human capital management division asked on LinkedIn Friday.

The responses were mostly predictable, such as an extra day off, flextime, and a company-sponsored lunch now and then. As for the less obvious suggestions, some were less obvious for good reason. One commenter cited the team-building value of a "Crazy Hat Day," where all employees wear their silliest hats to work. Another suggested luncheons that include prize drawings – "Something simple, like a toaster, blender, etc." (Alright, that one came from the president of a workers'-comp consulting firm, who I presume was talking about blue-collar workplaces. In my former industry, they'd have to give away a Rolex to create any goodwill. Or maybe a Tesla Roadster.)

Attention all cynics: if your employer suddenly gushes non-cash perks or low-rent group outings, it might be prudent to lower your bonus expectations even more than you already did.

On the other hand, some ideas that I think would matter to real employees – at least, the kind of real employees that a real employer would actually want to keep – were posted later in the thread by the same Goldman Sachs official who posed the initial question (giving part credit to a Target Stores HR manager). Those ideas focused on career advancement: "giving people extended responsibilities, assigning a senior mentor, ….role swaps, internal mobility opportunities and stretch assignments."

But perhaps the best answer of all came from the head of a foundation associated with another job board, which I won't name. She wrote:

"It may not be an incentive per se, but I have found that especially in difficult economic times, employees appreciate transparency above all else. Senior management talking openly about the economic climate and how it's being handled by the company will create strong goodwill and thus loyalty with employees. Reassurance that their job will be there in 3, 6, 12 months is more than reward enough. Those that are skeptical about the company's ability to sustain the storm may be ready to jump ship before it sinks."

"What kind of non-cash rewards can HR promote…." [LinkedHR; may require LinkedIn group membership]

1 comment:

Anonymous said...

In providing incentives you have to watch out for things that create taxable events to the employee.

In the case where the employer provided "credit" to a Target store, that transaction creates a taxable event to the employee and withholding taxes have to be paid on the cash value of the gift. Gift Certificates and Gift cards are cash equivalents in the eyes of the IRS.

Be careful, and don't create an additional tax to the employee and the employer.