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Globoforce’s Head of Strategic Consulting Derek Irvine has a thought provoking post up at Compensation Café examining the utility of company’s offering fringe benefits such as free lunches to employees. As is most of Derek’s stuff, this is a really good read. You can check it out here.

In summary, Irvine says that if an employer views an offered fringe benefit such as a free lunch as a business decision (i.e. something that drives the bottom line by increasing productivity/engagement etc.) then there are compelling reasons for it to continually fund the benefit. Conversely, if they view the fringe benefit as a branding tool (i.e. something that makes them a “cooler place to work”) then funding it over the long-term may not be the best use of company funds.

…With that said, Irvine’s post got me thinking about all the fringe benefits employers invest in that do little to make employees more productive: The huge investment that employers make into merit is perhaps table stakes at this point (as it has become an entitlement), but what about the thousands (and in some cases millions, depending on company size) that those same employers invest to give top performers an extra 150% at year end? The small differentiation doesn’t really incentivize, and in some cases it actively de-motivates. Meanwhile, on the opposite end of the spectrum about 1 in 5 Managers never tell their employees “thank you” despite its proven positive benefit on workplace performance. The same study shows that 75% of workers don’t feel appreciated enough by their managers for the work that they do. A “thank you” doesn’t cost an employer anything, and yet a shocking number of leaders drop the ball here.

Ultimately, I find myself wondering if employers are really thinking through why they allocate resources designed to recognize, reward, and incentivize employee performance the way they do. Before implementing a fringe benefit, careful consideration should be given to what value it adds.

After all, once a benefit is given it often becomes difficult to take away; doing so in many cases does more damage than would have occurred had it never been given at all.

As always, please share your thoughts in the comments section below.