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Rethinking Workplace Perks: Why Employees Prefer Cash or Time Over Extravagant Gifts
Supporting employee health and well-being is not just good practice-its foundational. Maslow’s Hierarchy of Needs, a psychological theory on human motivation, helps us understand how employee satisfaction can be built layer by layer.
Meeting Basic Needs First
At the base of Maslow’s pyramid are physiological needs such as food, shelter, and safety. In the workplace, this translates to fair compensation. For example, a low salary may force an employee to juggle multiple jobs or experience constant financial anxiety. While perks like gift cards or team lunches are appreciated, they can’t replace a stable income. Until these foundational needs are met, higher motivation is unlikely. For example: A company offering minimal pay but frequent “fun” incentives may still see high attrition because basic needs go unmet.
Understanding the “Magic Number”:
According to research by Princeton University, $75000 per year is the income threshold that correlates with emotional well-being. Employees earning less, often experience dissatisfaction, regardless of other benefits. While this number isn’t one-size-fits-all, it’s a useful benchmark to reflect on when evaluating your compensation strategy. Example: If your team is consistently leaving for higher-paying jobs, reassess how close your salaries come to this baseline.
Benefits that truly Matter:
While most companies offer standard benefits, impactful ones align with where employees are on their personal needs journey. Supportive perks like student loan repayment or flexible work arrangements can dramatically improve employee morale and retention. Example: If an employee is dealing with debt, offering loan assistance could reduce stress and improve their work focus.
Creating Wellness-Centered Cultures:
Wellness programs are not just “nice-to-haves”, they are powerful tools for enhancing both mental and physical health. From subsidized fitness memberships to healthy office snacks or mental health days, these intiatives show employees they are value beyond their productivity. Example: Offering chair massages monthly or virtual meditation sessions shows proactive care for employee stress.
Recognizing Beyond Bonuses:
Traditional bonuses often fall short. They can breed unhealthy competition, set unrealistic expectations or create feelings of unfairness. Instead consider more inclusive, consistent recognition systems. For example, Monthly shout-outs, personalised notes, or “points” employees can redeem for experience or gifts promote a culture of gratitude.
Here is a blog on how you can recognise your employees efficiently at the workplace.
Why Gifts Work (and Cash doesn’t always)
Gifts, even small ones, have a surprisingly powerful psychological impact. When employees receive thoughtful tokens, they experience a boost in dopamine, serotonin, and oxytocin-the brain’s “feel good” chemicals. Interestingly, giving these gifts also benefits the giver, creating stronger team bonds. Example: A team lead gifting a plant or favorite snack can elevate morale more than a small cash bonus.
Supporting Mental Health Along the Way:
While salaries and perks are important, employee well-being is ultimately tied to emotional security, purpose and recognition. At ImPerfect Psychotherapy, we understand that navigating workplace stress, burnout, or transitions can impact overall functioning.
By Urveez Kakalia and Krupa Abraham
Reference:
2. https://www.award.co/blog/rethinking-employee-bonuses
3. https://www.huggg.me/blog/the-psychology-of-office-gifts
Further Reading:
Wood, A. J. (2018). Powerful times: Flexible discipline and schedule gifts at work. Work, Employment and Society, 32(6), 1061-1077.
Stone, K. V. (2004). From widgets to digits: Employment regulation for the changing workplace. Cambridge University Press.
Nelson, B. B. (2012). 1501 ways to reward employees. Hachette UK.