End-year rewards to drop as employers go for non-monetary gifts, new survey shows
NAIROBI December 7, 2015 – A majority of Kenyan employers will use non-monetary gifts to reward their employees this year, a new survey reveals, as companies tighten their expenditures due to budgetary constraints caused by a slow-down in business.
The survey by Corporate Staffing Services (CSS), a local recruitment & HR consultancy firm, reveals that 44% of employers will give non-monetary gifts to good performers in 2015, while on 33% plan to use money rewards.
“This may be attributed to the flexibility and variety of non-cash incentives and recognition programmes in responding to diverse employee needs,” said Mr Perminus Wainaina, the CEO of Corporate Staffing Services (CSS).
Non-monetary rewards will include, shopping vouchers, lunches and outings, extended leave days, recognition through various awards or even gifts. “When rewards for performance are not based on money, the culture of a company tends to value recognition instead of the drive for money. Simultaneously, companies that use non-monetary reward systems spend less money motivating their employees and more money on improving other areas of business,” he added.
Mr Wainaina said employers interviewed said monetary rewards will include bonuses, salary increment, the 13th pay (equivalent to a month’s pay), profit sharing plans and paid time off. These incentives, he noted, encourage friendly competition between associates when linked to job performance and are a great employee motivator.
Overall, out-of town retreats are the least popular rewards at only 1%, which is common for senior level management.
According to the survey, employee rewards will also drop this year compared to last year, with 40% of employers planning to scale down. It says 8% of the organizations will not give any type of year-end/holiday reward. Of the organisations that rewarded employees in 2014, 15% will not do so this year.
The 40% of employers not rewarding employees this year attributed the decision to the prevailing economic conditions in the country which have affected their bottom-line, while 20% say they have adopted a year-round recognition and awards programs rather than a one-off year-end/holiday award.
The survey interviewed 402 employers who included 312 human resource managers, 90 business owners/entrepreneurs) and 2,702 employees from across section of sectors. This survey aimed to find out the plans and perceptions of employers on rewarding employees in 2015.
A majority of the employers (40%) favour year-round reward and recognition system over the one-off end-year programme, followed by gift cards/items rather than cash bonuses at 22%.
On the other hand, 55% of the 2, 702 employees in the survey would rather receive a pay increment and 28% prefer cash bonuses. Only 10% want gifts, says the survey.
“Given the current economic climate, employers, and especially small-business owners may hesitate to award year-end bonuses,” said Mr Wainaina. “However, this financial uncertainty should give them even more reason than ever to make the effort. Non-monetary rewards are especially useful when times are lean and business is down.”
Majority of employers at 80% will be rewarding all employees while only a small fraction will be awarding a department or best performing employees. Employers who are not able to award every single employee select the departments that are key to the business. “For example, in a medical practice, doctors will be rewarded and in an accounting firm, Accountants are most likely to be rewarded,” he said.
The survey found that a majority of organisations (45%) will determine the value of the reward and recognition programmes through management’s discretion. “This can be attributed to various factors, including the need to maintain privacy and confidentiality as well as to avoid contractual agreements that may lead to legal battles,” Mr Wainaina said.
Most organisations are expected to give gifts or awards valued between Ksh1,000 and Ksh 5,000 per employee. Only a small fraction (13%) of the employers intends to reward employers with an award valued at Ksh10,000 and above.
Currently, 34% of employers offer their employees an office (end-of-year) party/lunch/meal, followed closely at 33% by employers who give gift cards i.e. gift vouchers and items. The employees, however, would prefer a pay raise, followed by a cash bonus.
For more details
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