Motivation the non-financial way

As budgets are slashed, traditional year-end cash bonuses and other
financial incentives have disappeared. Companies are finding alternative ways
to raise staff motivation and morale in a bid to hang on to top performers, as
Ed Peters discovers

Two words sum up the current recruitment and retention situation in Asia
Pacific: employers’ market. HR directors are being smothered with curriculum
vitae. Employees are keeping their heads firmly inside their workstations. And
chief executives rarely remove their eyes from the bottom line while slashing
perks such as year-end bonuses, company parties and any other expenditure that
might be deemed frivolous.

Since the 11 September attacks catapulted an already shaky world economic
situation towards recession, Asia Pacific has pulled in its horns. Gone are the
days when financial gurus churned out books gleefully prophesying the coming
economic ‘Pacific Century’ with titles such as ‘Asia Rising’.

"There is no question that it is employers who are holding the whip hand
at the moment," says Sara Wells, who runs her own executive search firm
specialising in marketing and communications professionals in the region.

"Not only are employers getting rid of dead wood, they can afford to be
choosy about who they do hire and they are getting them cheaper. Perks such as
an automatic extra month’s pay at the end of the year are being abolished while
additional benefits like onsite gyms or canteens are disappearing too.

"And what’s more, people are far more cautious about being headhunted,
preferring to hang on to their jobs where they have some security rather than
jump ship."

However, employers don’t have it all their own way, as companies need to
think carefully when cutting jobs to cut costs, as the knock-on effects could
be detrimental. "Companies need to focus on staff motivation and morale
when making cutbacks, otherwise they risk losing their best staff when the
market begins to pick up again," says Macy Kwok, Hong Kong-based director
of international recruitment consultancy Robert Walters.

"If these measures are handled badly the result would be disheartened
employees, leading to low staff morale and disillusionment with the company.
This results in lower productivity as well as the likelihood that good
employees will jump ship once another job offer comes along."

Low staff motivation is understandable, Kwok says, as 2001 had been a
difficult year for many Asia Pacific companies. She stresses that while most
staff understand the need in the current economic environment for cost cutting,
communicating all changes effectively is important. "If you keep staff
well informed they will accept any changes as unfortunate but necessary,"
she adds.

In place of a year-end bonus or pay rise, many companies in Asia Pacific are
offering equity or options as a sweetener, as opposed to cash incentives. Top
executives are also looking at other non-financial ways to motivate staff, to
ensure morale remains high and resignations are kept to a minimum. These
include changing rules about the amount of leave staff can take at any one
time, offering flexible working hours, focusing on training and mentoring and
keeping communication lines to senior management open.

Training is still regarded as one of the most effective ways of rewarding
and retaining staff. Asians particularly respect education and a company-funded
degree, for example, whether in whole or in part, is seen as a two-way street.
The company benefits from better-qualified staff, and the employee gains an
extra qualification that will be beneficial both in their present position and
later on in their careers.

A final option, but not a universally popular one, is offering staff a
promotion but no pay rise, to show employees that their performance is being

David Chan Wo-ming, HR Director for Shanghai-based Adam Vista which
specialises in making computer software, comments: "It is traditional to
pay out a bonus at Lunar New Year, which falls in January or February, but we
are not going to be able to manage it in 2002. Instead we have offered all our
400 staff – from the top management down to the cleaners – extra holiday time,
ranging from one to three weeks. And as many of them have families living well
away from Shanghai we have cut a deal with rail and road transportation
companies to give them a free first-class ticket home.

"Obviously, most staff would have preferred the cash, but they realise
there is no other option, and with unemployment on the rise in China they would
rather have a job that is less well paid than no job at all."

This attitude echoes all around the Asia Pacific region. And while 2002
looks like it could be as difficult as 2001, the prevailing feeling remains
that by tightening belts now, future conditions can only get better.

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