Employee benefits vs recognition - which should you choose?

There are hundreds of articles available on the upside of employee benefits and just as many on the pros of formal recognition. It is widely accepted that programs that offer your employees something extra will have a positive impact on the business.

So, which is best - employee benefits or employee recognition?

Employee benefits are any non-salary benefit that an employee receives as part of their employment contract. While benefits vary company to company, they can include anything from extra paid days off to free dental, in-house childcare to free lunches, insurance paid for by the company, education allowances, gym membership, cheap fuel, discount groceries, monthly massages at your desk, movie tickets, free eye checks, free access to company services, flights for holidays and much more.

Every company packages their benefits up differently but they all make the company more attractive to prospective employees. Once a new hire joins, the benefits they receive maintains their loyalty and goodwill towards the organisation as the employee enjoys the ongoing perks of reduced price goods and services, and some that the company covers in full.

Typically, all company employees receive standard company employee benefits as part of their deal, regardless of their role, input or effort. Essentially, the new hire turns up on day one and has access to these benefits without having to do anything.

Employee benefits are an important part of the EVP and given many companies offer them, and are getting more creative with what is available, benefits are something that employees now compare when they are considering where to work. In the widely touted ‘war for talent’ employee benefits are an important factor for the talent you are trying to attract.

Employee recognition differs considerably. Whereas with benefits, you just turn up and the perks are laid on, recognition is based on what you do once you are there. Employee recognition is based on employee behaviour.

A recognition program is typically pinned to the company values so each moment of recognition reinforces those values, in the moment and longer term, for both the employee being recognised and for the whole company as recognition is socialised.

Humans are hardwired to seek validation and recognition satisfies that sub-conscious desire. When we are recognised for our behaviour, we do more of it to get more recognition. We don’t consciously think “I will behave in this way to get recognised for it’ but the fact that we were last time we did, means we will do more of the same.

When this happens across a business, on a daily basis, from employee to employee, across every part of the business, the cumulative change in behaviour has a profound effect overall.

An employee’s effort does not need to be Herculean to be recognised, in fact, quite the opposite. Successful recognition programs are those that have more moments of meaningful recognition across the business rather than limited instances of top down recognition. It is not just about celebrating the big wins, but the many great little things that happen every day. The old saying of ‘the destination being made up of thousands of steps’ could not be more fitting when it comes to recognition.

With more and more companies introducing peer-to-peer recognition programs to drive results, recognition is an equally important part of the EVP but the long-term impact is profoundly more valuable to the business.

Back to the original question - which is best, employee benefits or employee recognition?

There is no simple answer. They both have a specific place in an organisation and both achieve positive, but very different outcomes. While employee benefits will attract employees and to some degree keep them loyal, recognition will change behaviour of employees, aligning them with company goals, and in turn, improve productivity, employee loyalty and profitability.