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Rachel Pinto: Perks of the job?

Wednesday 07 October 2015

Rachel Pinto discusses what organisations are offering employees to encourage and increase productivity.

Rachel Pinto

Rachel is a Senior Research Officer at Acas focusing on policy research.

Rachel Pinto

In-house spa facilities, all you can eat lunches and unlimited leave are just some of the employee incentives on offer by top companies these days. With increasing competition and a shortage of talent, organisations are finding new and unusual ways to attract and retain their staff. But what does this mean for productivity?

On the face of it, extravagant incentives are designed to reward talented individuals and ensure that their skills are retained by the organisation. But there's also an element of convenience. Offering on-site facilities, food and other freebies can help employees meet deadlines and work the long hours required. In the technology industries for example, generous employee benefits are a small price to pay to hold on to skilled professionals who can innovate and keep up with the pace of emerging technologies. Under this guise, a happy worker is also a more productive one, as employees are encouraged and rewarded for working hard.

But do these long hours translate into productivity gains? Recent figures from the ONS suggest that UK productivity based on output per hour is rising but still the UK still has a long way to go. Figures from the OECD, looking at average annual working hours in 2014, show that countries that worked the most hours (like Mexico at 2,228 hours) were less productive compared to countries that worked fewer hours (such as Germany with just 1,371 hours). In support of this, Sweden recently announced that they are trialling the move to a 6-hour working day in an attempt to improve productivity and make sure the time spent at work is used more constructively. So it seems working longer hours may not always be linked to increased productivity.

Critics also argue that some of these generous employee incentives act as a disincentive to having a healthy work-life balance, as it encourages staff to stay at their place of work and not venture out and take proper breaks.  While, increasing annual leave allowances may have little effect on those who already work longer hours and do not use up their annual leave anyway.

It's clear that raising productivity requires more than simply working longer hours and offering generous incentives to do so. It's about making sure the right conditions are in place to allow people to do their jobs effectively and helping them feel supported when work issues arise. Employee incentives can help make employees feel valued, but creating the right conditions is also about well designed work, skilled managers and clarity around rights and responsibilities.

Read more about Acas' seven levers of productivity from our Building Productivity in the UK page.

Read other blogs in our productivity series

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