Free lunch vs. other perks: Why not let employees vote?

May 31, 2013: 2:13 PM ET
women cafeteria employees
Would employees at your company prefer free lunch -- or other perks?
NEW YORK (CNNMoney)

How much of a voice do your employees have in making decisions like which benefits they'd prefer, or how their workspaces are set up?

Plenty of research shows that millennials in particular want a say in these things, so enterprises big and small are trying harder to oblige. One place where it's working is daily-bargain website 1SaleADay.

Last November, management faced a dilemma: The company, which has grown from 45 employees to more than 360 in just three years, was facing steep hikes in health insurance premiums.

"We operate on razor-thin margins, so we had a lot of discussions about whether, and where, we could reallocate funds," recalls Eli Federman, a senior vice president who has helped grow the business since his brother Ben founded it in 2006.

One option: Stop giving employees lunch for free, a perk that cost 1SaleADay about $250,000 a year.

That might sound like a no-brainer, but Federman hesitated to simply impose the change from on high.

"We had had bad experiences before with keeping employees in the dark" about why certain HR moves were made, he says. "No one wants to be dictated to. When people make decisions, they feel empowered. When decisions are made for them, they're demoralized. Feeling left in the dark is a major cause of employee turnover."

So Federman decided to try something new: He took a vote. An online poll asked employees whether they'd be willing to trade gratis grub for lower health insurance premiums.

A whopping 91% said yes, 2% were undecided, and even the 7% who voted to keep the lunches were "content with the outcome," Federman says. "They understood that there was a transparent democratic process, so they were okay with it."

That was especially true when they realized that for a typical employee with a family, the bite from their paychecks would be about $200 less per month than if lunches were still free.

Encouraged by that result, 1SaleADay has since given workers a say in, for example, designing their own office space in the company's new headquarters in downtown Miami.

"Our creative team converted their walls into chalkboards. HR would never have conceived of that," notes Federman, adding that the department is flourishing: "Productivity is up. Creativity is up."

What would he not leave up to employees? Federman, who has a law degree, acknowledges that decisions about hiring, firing, promotions, and bonuses "can create legal issues" if opened up to general discussion, as well as causing "unnecessary tensions and fears in the workplace."

But aside from those touchy topics, he says, involving workers in decisions that affect them has led to "higher retention, increased trust, and happier employees." And who doesn't want that?

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