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As many employers look to make cost savings, it is still important to reward valued staff as their morale is vital to businesses' long-term prospects, says Nicola Sullivan
During periods of economic instability many employers will be keeping a close eye on benefits expenditure, looking for ways they can control or reduce costs. In some cases, the easiest way of achieving this is to cut smaller non-contractual perks such as motivation schemes. However, this could be a mistake, as it risks alienating the employees an organisation needs most if it is to successfully overcome the challenges created by an economic downturn.
In such times, it is particularly important to maintain or boost the morale of talented and valued employees who may easily become demoralised by the loss of colleagues through redundancies, or when struggling under the increased pressure of a bigger workload.
Despite heightened insecurity about the job market, staff who believe their employer is either ignoring or is failing to meet their needs are more likely to look elsewhere for better reward packages. Employers will also want to ensure they are able to retain talented staff and avoid the high costs associated with recruiting new employees. This may mean they need to rethink their reward programme, and in some cases, even have to invest more money in engaging staff.
Derrick Hardman, managing director at Capital Incentives and Motivation, says: "Businesses tempted to spend less on rewards [risk] further demotivating staff already struggling with the pressure. Rather than cut back on reward, businesses that want to motivate staff will be maintaining, even investing more, to build morale."
There are plenty of ways employers can link motivation schemes to staff performance, other than by using bonuses, which are often contractual. They...