The psychology of workplace perks and benefits is a fascinating area of study and many people have examined how praise and recognition impacts the human brain and influences workplace behaviour. Employee recognition comes in many different forms, such as salary increases and bonuses, more responsibility or public recognition such as an ‘employee of the month’ award. These can all influence how the employee subsequently behaves, but businesses are being challenged to find the most suitable perks and benefits in order for employees to become fully engaged in their work, and tangible benefits are seen as being the ideal solution.

Why Recognition For Employees Works

Recognising the positive performance of employees works because:

• It triggers chemical reactions and hormone boosts in people, such as dopamine and oxytocin, which makes them feel appreciated and more connected.
• Appreciation reduces stress levels and builds up resilience to everyday workplace issues.
• Recognition meets basic psychological needs that we all have, such as safety, belonging and self-esteem.
• Recognition also encourages people to repeat the behaviours which earned that recognition, as it positively reinforces those behaviours.

Essentially, recognition makes people feel good and motivates them to work better. However, in order to maximise the success of an employee benefits scheme, it is important that perks and benefits are tailored to meet the preferences of individual employees.

The Different Types Of Employee Benefits

Although salary sacrifice schemes are designed to be fully inclusive and to be open to all members of a workforce, they are a benefit that rewards the long-term commitment of an employee and acknowledges their value as a recognised team member.

Common workplace perks and benefits include holiday trading, retail discounts, critical illness cover and life assurance, while there are also many health and wellness perks offered, such as gym membership discounts, mental health support and medical and dental cover. More tangible rewards come in the form of cycle to work schemes, or on another level, salary sacrifice car schemes whereby in exchange for a portion of their salary, an employee can lease a brand new car.

Higher Employee Engagement Through Tangible Workplace Benefits

While all these benefits are welcome and will satisfy many lifestyle needs, it is acknowledged that employees engage more with tangible benefits like cars offered through a salary sacrifice scheme because they act as a constant, physical reminder of appreciation and recognition. With intangible rewards, it is felt that the satisfaction is temporary and soon wears off.

• Instant – A tangible reward like a new car offers immediate gratification, and this reinforces the desired behaviours, i.e. the levels of performance the employee has been achieving. And this makes it more likely that they will repeat these behaviours.
• Non-cash – Although everyone wants to be paid more, a cash reward or a salary increase is seen as ‘more salary’ which essentially serves a basic, everyday need. In other words, this is welcome but it is something the employee probably already needed and will go towards bills and shopping and maintaining the home. A new car is seen more as a desire and something an employee otherwise couldn’t afford. Therefore, making this a benefit and something that is attainable is more valuable to a person than something they felt they deserved anyway.
• Long term association – We use a car every day, so it is a constant visual and physical reminder of an employer recognising and rewarding commitment and achievements. This sustained visibility will strengthen the emotional connection between the employee and employer and encourage long-term commitment, while a cash bonus, for example, only promotes short term positive feelings and is very quickly spent.
• Personalised – A tangible reward like a car is a visible symbol of status and because an employee can choose the car they want through a salary sacrifice car scheme, this is personal to them and tailored to meet their individual needs. This is more likely to result in an engaged and motivated employee.
• Safety and signalling – A high value tangible reward such as a salary sacrifice car scheme shows an employee that their contributions are valuable. This will deliver a sense of psychological safety for the employee because they can identify with the business, and it demonstrates that what they are doing is being recognised. In turn this means an employee is more likely to push themselves and go the extra mile, because they feel safe to do so.
• Identity – Quite simply, a salary sacrifice car scheme as a tangible employee benefit may be a way for an employer to differentiate themselves from a competitor who doesn’t offer this, and as part of a renumeration package is a good way to attract and retain more talented employees.

An employer still needs to offer a range of intangible workplace benefits as part of a fair and attractive renumeration package. This should include health and wellbeing benefits as well as professional development opportunities, as these also satisfy emotional and psychological needs for the employee. But balancing these with tangible benefits such as a salary sacrifice car scheme can be a powerful motivational tool and can result in an overall sense of value and belonging.

If you want to learn more about salary sacrifice car schemes, contact our team at Pink Salary Exchange today.