By Annie Ward, HRZone Editor

In the last few weeks we have witnessed two major organisations, the Royal Mail and British Airways introduce attendance bonus schemes and, in recent years it has been recognised that people are the key source of competitive advantage, so it might not be surprising to see initiatives such as these in the marketplace. But how successful are campaigns that effectively ‘buy’ employee commitment and do these modern incentive schemes go too far, simply put should employees be rewarded just for turning up at work?

Attendance levels at Royal Mail have certainly risen to levels that require addressing. The organisation reports that as many as 10,000 Royal Mail staff are off work at any one time that is 6.5% of the operational workforce.

Rewarding staff simply for turning up to work may seem extreme, but the organisation says it is simply admitting its failings.

A spokesperson speaking to HRZone commented: “The aim of the scheme is to reward good attendance by our employees. This is an incentive scheme to show our people how much we appreciate good attendance.”

Royal Mail staff with exemplary attendance records will be rewarded with the chance of winning one of 12 weekend breaks. For staff who do not take any sick leave for a period of six months, a Ford Focus worth £12,000 could be theirs.

British Airways also appear to have jumped on the attendance bandwagon. They are implementing a staggered attendance, incentive scheme as follows:

• £200 for staff with no more than four days absence between 1 October 2004 and 31 March 2005
• £400 for staff with no more than six days absence between 1 April 2005 and 31 December 2005
• £400 for staff with no more than six days absence between 1 January 2006 and 30 September 2006
• £1000 for staff with no more than 16 days absence between October 2004 and September 2006

The move comes in light of absence figures which show that BA staff are off sick for an average 17 days per year while the UK average is around 7 days per annum.

So do these motivation schemes work in the long-term?

Harking back to theory, academics purport that the bottom-line is that people go to work in return for pay.

Between 1943-1953 Maslow developed his ‘hierarchy of needs’. His theory suggests that we must satisfy each need in turn, starting with the first, before moving on up the pyramid.

The needs are described as follows:
1. Biological and Physiological needs: air, food, drink, shelter, warmth, sex, sleep and money
2. Safety needs: protection from elements, security, order, law, limits and stability
3. Belongingness and Love needs: work group, family, affection and relationships
4. Esteem needs: self-esteem, achievement, mastery, independence, status, dominance, prestige and managerial responsibility
5. Self-actualization needs: realising personal potential, self-fulfillment, seeking personal growth and peak experiences

The theory therefore, is that only when the lower order needs of physiological and safety requirements are met can we be concerned with the higher needs of influence and personal development.

It would therefore appear that BA and Royal Mail staff are only operating and interested with the bottom rungs of the hierarchy. The implication of the model in their cases would seem to be that for those on low wages, money looms more significantly than those who earn more. ‘Fat cats’ it would seem have satisfied these basic needs and are therefore more concerned with issues higher up the model. Motivational reward schemes including attendance bonuses might not therefore work at senior level.

Of course the model doesn’t take into account that employees may operate at more than one rung of the hierarchy that is they might be concerned with money and self-fulfillment needs at the same time. Certainly if this is the case, BA and Royal Mail might be in trouble for overlooking these higher order needs.

In reflection of this the Chartered Institute of Personnel and Development (CIPD) give a further warning, saying that on top of these concerns employers might actually be falling foul of discrimination legislation.

Speaking to HRZone, Ben Willmott, CIPD Employee Relations Adviser said:

“There is nothing wrong with attendance incentives schemes as long as they are part of a managed and co-ordinated approach to reducing absence levels and are not seen as a solution in themselves.

“Employers need to first get the management basics right. They need to ensure that employees have well defined job roles, achievable targets and the support, training and recognition to help them achieve these targets.

“Line managers need to be trained in managing absence and need to take responsibility for managing absence through policies such as return to work interviews, which allow staff to raise any underlying causes of absence. Employees with health problems also need to be referred to occupational health professionals at an early stage.

“One of the challenges of managing attendance incentive schemes is to ensure that they don’t penalise individuals who have genuine health problems and they don’t effectively discriminate against any employee, for example on the basis of disability.”

Meanwhile, findings suggest that organisations must be careful to compliment reward schemes in line with customer satisfaction expectations.

In a survey conducted by the CIPD and the Institute of Customer Service from Aston University Business School, it was discovered that in those organisations where performance-related pay was used to motivate staff a secondary issue had occurred: customer services relations.

In these instances it found that employees were rewarded for the number of transactions they made.

In People Management magazine it was reported that at a contact centre an employee-terminated a customer’s call mid-transaction because the three-minute customer time limit had been reached.

Gary Fisher, research associate at Aston Business School said: “Services now account for eight out of 10 jobs in the UK, but organisations are seeking to compete on reducing costs and improving internal efficiency rather than developing and motivating staff.”

It would seem once again that those on the lower wages are operating at the bottom levels of Maslow’s hierarchy of needs, proving that indeed money does talk.

The warning seems clear: businesses must be careful to implement reward schemes which are:

a. inclusive and non-discriminatory; and
b. do what they were intended to do.

Reward schemes that are manipulated and in the long-term damage customer relations surely defeat the objective of improved motivation for a return on the bottom-line. Damaged customer relations must impact on profit levels.

HRZone invites you to add your comments and continue the debate. Please use the comments box below.