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Dangers of de-perking

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in Leaders & Managers,Management Training

When a big tech company raised the monthly price of its day care program by nearly 75%, employees wept. 

If the current economic slump is leading you to rejigger your company’s perks, consider this advice:

  • Know that it will be difficult. “Once you have the perk, to take it away is seen as a violation of a psychological contract you have with your employee,” says Wharton management professor Nancy Rothbard.
  • Explain clearly why you must take something away. “It helps a lot if the need is something driven by factors outside the firm,” says Wharton management professor Peter Cappelli. The reason should seem fair to employees.
  • Customize perks, instead of offering blanket ones. Younger workers may value supplemental child care, while older ones may value golf-club memberships. Keep the deals confidential, so others don’t feel their own deal is bad.
  • Move toward voluntary perks. Arranging for discounts with, say, a local restaurant or florist allows you to provide a valuable benefit to employees, at no cost.

— Adapted from “‘Don’t Touch My Perks’: Companies that Eliminate Them Risk Employee Backlash,” Knowledge@Wharton.

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