At work, cutting small perks can save money -- or alienate the staff

The economic recession has hit many companies, and companies are trying to reduce costs and keep their productivity levels from dropping.  One of the strategies organizations are using to prepare for better times is cutting certain perks they give their employees.  

Honeywell International, the $37 billion technology and manufacturing company, sent an e-mail  to its employees stating that it would be ending reimbursements for things like funeral flowers and baby shower gifts.

JJ Saecker, a computer programmer at Honeywell International at the division in Golden Valley, saw the e-mail and did not make much of it. Saecker realized the importance of the e-mail when a friend and colleague died of breast cancer.  He thought the company would make an exception because the woman had at Honeywell for 32 years.

Saecker, a 15-year employee, was surprised when Honeywell refused to reimburse the staff for any flowers that would be sent to her family.

"Mostly, I was just disappointed because it seems like her presence here was a significant part of her life," Saecker said. "When the company, as a policy, makes these decisions, it just takes the human factor out of it."

Dan Hare, a Honeywell spokesman, confirmed that the company no longer reimburses for flowers for the death of employees or family members or for special occasion gifts and expenses. The e-mail indicated a review had found $5 million in annual company costs that should no longer be reimbursed.

"We're asking employees to identify any nonessential expenses and eliminate them," he said. "Of course, we're encouraging employees to continue to recognize these sorts of events at the team level."

The employees at Honeywell raised $101 for flowers for their former co-worker.

"Many of us found the cut insulting," Saecker explained. "I felt that it showed how the corporate structure's only sense of compassion comes from the employees."

So how much does it cost to cut a perk? The money saved can be noticed immediately, but taking something away can come at a price that's tough to quantify.

"Sometimes it's very easy to lose sight of the small perks and how much they really do mean to the employees," said Michelle Beck-Howard, a human-resources specialist with Administaff in Edina who helps companies run lean. "Business managers are focused on a bigger picture, especially during these economic times."

If the work environment at an organization is tense and there is a lack of communication then cutting perks is going to have more consequences than if the workplace culture is more trustworthy and communication is robust.

Peter Eckerline, a senior vice president of investments, explains: "What you do is keep your employees happy and productive until this passes. Then you're positioned to take advantage of things as the markets get cleared and the recession ends."

He states that the return on investment is clear.  He also states "People appreciate the little things you do. We try to treat our employees here exactly how we want them to treat our best clients." 

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Posted by: suhujitha on 2009-06-15 10:57:14

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