As everyone knows, the public sector has never been a great ‘financial bonus giver’. After all, we’re just that little bit less likely to vote for any politician who openly supports the provision of financial bonuses paid via the public purse aren’t we; as taxpayers, why should we fund such perceived folly?
However, as more and more staff working in the public and private sector are TUPE’d in outsourcing agreements and, therefore, potentially earn higher salaries and bonuses than those around them, how can management keep everyone happy, motivated and productive? It leads to the question: Are your staff better off being TUPE’d…?
Outsourcing: Are your staff ‘better off’ being TUPE’d? Is the Government fuelling hypocrisy…
The first issue to address here is the rather uncomfortable hypocrisy that the Government are fuelling. For on one side there are talks of salary freezes, cost cutting and austerity, while on the other they have announced that the Department for Work and Pensions, the largest in the administration, will be doubling bonuses for their team.
Then there is the widening financial, but narrowing proximity, gap between private and public sector workers. Though in some industries bonuses have all but disappeared, in others it is still the norm to offer performance-related financial dividends. Earlier this year, Capita announced that staff who have TUPE’d over to the new joint venture with the Cabinet office will share in a bonus pot of up to 5% of its pre-tax profits, despite current austerity measures. So, there will be Cabinet office staff working side by side with private sector colleagues whose financial packages and rewards will be significantly different.
Bigger bonus – bigger job risk?
Finally, there is the issue of perception. Some jobs attract large bonuses. Others don’t. Significant bonuses are usually awarded to those whose actions have had a direct impact on the organisation’s revenue, which is why top salespeople in the private sector will typically receive large bonuses. The double edge to that particular sword is that if these sales people don’t perform, they will, more often than not, face the very real prospect of losing their jobs.
By contrast, even senior managers in large organisations may receive little in the way of bonuses if those in charge of the purse strings feel that success is more attributable to the smooth functioning of its bureaucracy than the actions of a particular individual. Therefore, even though a residual feeling of entitlement remains from the inflated bonus perception of the bumper years, the reality is that fewer than ever will be receiving them.
Financial austerity over the last few years has required organisations in both the public and private sector to find new ways of describing their activities, introducing many new or previously little-used terms into our common language. These include ‘subprime mortgages’, ‘toxic assets’, ‘quantitative easing’ and ‘cash for clunkers’, and, of course, my personal favourite term of interest, ‘zero bonuses’, which in essence gives workers hope that their bonus may one day have some value without actually paying them anything right now.
When your team wants cash, but can’t have it
Inevitably, some team members will be really upset that they can’t have a ‘traditional’ financial bonus. And while you must acknowledge their feelings, it’s important to be honest with them.
Make sure workers understand the organisation’s financial situation. The more your team knows about what’s going on, the more likely they’ll be to make allowances. So, communicate openly.
Work with your team to find a solution. If you really want to retain someone, then examine how you can give that person more without a bonus. For example, are there options to give them access to a company vehicle for a period, or a company phone, saving the person money?
When explaining why someone can’t have a bonus, be totally – and brutally – honest. If people know that their bonuses will cost themselves (or one of their colleagues) their jobs, they might realise that the bonus is not that important after all.
So, if you’re a manager who can no longer use the potential of cash bonuses to motivate your team, what are your options for getting the most from them throughout the year?
In the rest of this article, we’ll look at some of the most commonly used and innovative alternatives to bonuses for motivating and rewarding members of your team during these more financially restrictive times.
6 ways to reward your team when the budget won’t allow for financial bonuses
If you’re in an organisation that cannot afford to pay financial bonuses, there are other types of rewards you can offer.
Start by finding out what your team members really value as individuals, because this might not be what you think. By taking the time to determine what’s really important to your people, you can offer rewards that really mean something.
Here are a few non-financial bonuses that both public sector and private sector organisations can offer their people in this weakened economic climate:
- Flexible scheduling. Many people, especially those with families, would really appreciate a shorter or more flexible working week. So, consider offering those within your team the option of working four 10-hour days, or of cutting back on their hours entirely. This might be a welcome reward. Letting them leave early on certain days is another possibility.
- Additional or extended leave. Many companies offer their people increased holiday time, as well as extended time off (sabbaticals), instead of financial bonuses. People can use this time to be with their family, go on a long trip, or even take study leave to improve themselves in an area not directly related to their work.
- Telecommuting options. Teleworking or hot-desking has been in the news for a few years now as organisations look to ‘sweat’ their building assets. If your organisation doesn’t need everyone in the office every day, why not allow some trusted team members to work at home? Measure the impact and responses over the months to come. Some of your team will dislike it, some will feel insecure – some will thrive because they are able to work uninterrupted. However, measurement is key to monitor progress.
- Additional training. Some people might really value improving their education or work skills. Offering them classes or extra training might be appreciated.
- A relaxed environment. Some organisations are relaxing their dress code for teams that achieve the business/department objectives they have been set. This has been more successful in some organisations than others. It really depends upon how formal your organisation is. It also depends upon whether you have regular client visits to your organisation; some clients may not necessarily respond well to jeans and T-shirts, although explained in context, it isn’t normally a problem.
- Volunteer time. Many companies offer their team members one paid day off per month to match personal time to volunteer at an organisation that really means something to them. This is a great way to raise morale, and help your local community at the same time.
It’s important to make your team aware of the financial value of these benefits. For instance, if you offer your team an additional week’s holiday, let them know the numbers so they can appreciate how much this benefit is ‘worth’.
Be mindful of the risks
Be aware you risk losing genuine star performers to other organisations and/or departments if you stop paying bonuses. You either need to accept this, or you may need to fund an ‘exceptional’ bonus, recognising all of the bad feeling that this may cause. This can be a painful dilemma for managers.
Unions too, will often get upset at what they consider to be ‘discretionary’ or ‘subjective’ bonuses. They will try to argue it is unfair on their other members. Clear business outcomes, performance measures, recognition of levels of accountability (often misunderstood by some union members) and assertive management of these measures and outcomes, will help demonstrate to your team you are being fair, open and honest about what you are trying to achieve and that achievement will be rewarded – albeit in ways other than financial.
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