Employee benefits work when they have real intent and purpose

by David Creelman | Posted | Total Rewards

Employee benefits work when they have real intent and purpose

If you are in Toronto there's a chance you've seen an electric car decked out with the branding of LoyaltyOne, the company that operates the AIR MILES Reward Program.

If you have seen this car, you've seen an unusual employee benefit.

It is also an employee engagement tool, part of LoyaltyOne's social responsibility effort.

It's also a marketing tool helping to promote the LoyaltyOne brand. How this car came to be is a story rich in lessons.

Employee benefits are best when they are woven into the company fabric

The starting point was a fairly common employee benefit offered by LoyaltyOne: a discounted public transit pass. Usually that would be the end of the story too; you offer a nice little benefit, some people take it, HR moves on to the bigger compensation issues.

However, for LoyaltyOne this was not just a nice little benefit. A big part of their corporate mission is being environmentally responsible and because of this they have all kinds of initiatives: solar panels, waste reduction programs, and showers for people who cycle to work.

This mission, done right, becomes part of the employee value proposition. The sense of meaning it creates drives engagement. So the first lesson here is that benefits are best when they are woven into the company fabric, not a disconnected perk of some monetary value. Of course, that still doesn't explain the electric car.

An employee benefit only serves the company's purpose if employees value it, so LoyaltyOne tracked the usage of the transit benefit. It was good, but the company wondered how to make it better. Employees told HR that they couldn't always take transit because sometimes they had to visit clients or run errands and that required a car.

Worse, if they had to do these trips a number of times a month, then buying a monthly transit pass was no longer worth it. The innovative solution: have a shared car employees can borrow. To be consistent with the brand, also make sure these cars are environmentally friendly: hybrids, SMART cars or electric.

LoyaltyOne ran the numbers and predicted employees could probably make use of as many as seven or eight shared cars but in the spirit of 'test and learn' the company started with two. Demand was high and the company went on to expand the program, and came up with the idea of painting the cars with the company brand to get extra benefit out of the program.

Logistically the whole program was surprisingly easy! LoyaltyOne partnered with a local car sharing company, Autoshare, who handled the administration.

The power of employee benefits with a real intent and purpose

Stories of uncommon employee benefits are often cute, but I don't want you to walk away thinking about this as simply a nice story. There are some lessons here.

1) The power of employee benefits with a real intent and purpose, something that flows from the company's core values. If an employee benefit is rooted in values then there is the opportunity to get all kinds of leverage from it, well beyond the quid pro quo of offering employees something nice.

2) The drive to push further and the use of data to make good decisions on how to push further. LoyaltyOne started with a transit pass and kept pushing to find ways to get even more value.

3) Use a 'test and learn' mindset when it comes to establishing employee benefits. LoyaltyOne is a good example of an organization that uses evidence-based management. One can imagine a certain reluctance to take on something unusual like car sharing. This reluctance is best handled by saying "Let's try it and find out." If you try, then collect data on what's working this approach places you in a much better position to make a sound decision and win over skeptics.

Employee 'Benefits' is the one part of reward where there is a lot of room for fun and creativity. Seize the opportunity.

Your turn: What is a fun or unusual employee benefit your organization has implemented or that you've heard about? What were the results?

For more insight on total rewards insights and practices, read Does total rewards need gamification?

Does Total Rewards Need Gamification?


Does Total Rewards Need Gamification?


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