“A good example of a cost-efficient perk is health insurance. Buying insurance for a large group of employees allows for the pooling of risks, and can be obtained more cost effectively than if each employee went out and purchased his or her own insurance.” Perks also work well “when they are set up so that the company gets a tax deduction for the expense, but the employee does not have to pay tax on the perk.”
Allowing employees a few weeks to pursue an engineering project is a good perk, Guay adds. “It is probably something that many Apple employees value, but they cannot ‘buy’ this opportunity easily outside the company. And I assume that Apple is the beneficiary of these side engineering projects — that is, they are projects to develop products or software that may add value to Apple.”
As for stock options or stock grants, which many companies – including Apple –offer some employees, “they are just part of the compensation package, and are not perks because they simply provide the employee with the possibility of a monetary payoff.”
According to Cobb, the biggest benefits – and the two that matter the most – are healthcare and retirement. “Those are what drive employee satisfaction,” especially now that fewer companies are offering comprehensive health care coverage.
Pumped up
Although the Journal article reported that Apple’s Cook “may be open to letting employees take sabbaticals”, Rothbard says that “sabbaticals are still pretty rare. Like Blue Sky, the idea is to recharge and refresh” an individual’s motivation and creativity. Rothbard cites ongoing research by a colleague on peripheral knowledge – knowledge that is drawn from other contexts and related to the job at hand, or, in the case of employees, infused into one’s core tasks. Her colleague’s research, Rothbard adds, suggests that people can become much better innovators through incorporating peripheral knowledge. A classic example is the Reebok pump shoe which, two decades ago, merged some elements of medical technology – including the air pressure pump – into a path-breaking new basketball shoe.
Bidwell cites another benefit of such perks as yoga classes, free meals and free shuttle buses: “They are good for building networks in the organization. The more you can get people to socialise outside of work but with their work colleagues, the more they will meet people from other departments. That has to be good for the company.”
Bidwell isn’t sure that many of the perks offered do much to attract or retain employees. “Would you really stay at a job because they did your dry cleaning? My sense is that in many of today’s companies, people are looking for opportunities to build their careers and work on interesting and impactful projects. That trumps everything else.”
Adds Cappelli: “I don’t think the idea behind retention is that employees are actively shopping and comparing the dollar value of what they are getting from each option. The idea is to keep them from shopping, in part by showing concern and in part by offering arrangements that are tailored to the specific needs of the people you want to keep.”
Apple’s Blue Sky initiative “is a good way to harness energy and initiative on the part of employees”, Cappelli states. “It may help retain them as well, at least until they figure out whether their idea is good enough to form the basis of their own company.”
