What, No Perks? Count Me Out.

If you want to spark employee disengagement, take away their perks. That’s the major conclusion I draw from a recent Wharton School at the University of Pennsylvania report. Though spun largely toward executive perks, there is a lesson to be learned from this report as companies are continuing to tighten their belts. As Wharton management professor Nancy Rothbard said, “Once you have the perk, to take it away is seen as a violation of a psychological contract you have with your employee.”

The report author explains further:

“To remove the perk is one of the most direct routes to employee anger, which in turn, leads to lower levels of motivation and retaliatory behavior. The retaliation can take on a psychological form, such as less commitment to the job, or a behavioral form, such as working less hard.”

That is the classic definition of employee disengagement. During this tough economic time, we should be doing all we can to encourage employees to want to work harder with a greater commitment to the team and the firm. Employee recognition is a key way to do this. When implemented correctly and measured appropriately, strategic recognition programs an actually save companies considerable money over the various tactical and untracked ad-hoc initiatives often scattered throughout a company’s many groups or divisions.

What are you doing to ensure you maintain or improve your psychological contract with your employees? Talk about it in Comments.