Do you encourage your staff to volunteer?

By Jayne Morris, Chief Executive at TPP Not for Profit.

Charities are very good at encouraging private sector companies to give their staff time off to volunteer, but how many have their own policies in place to support their own employees in volunteering?  In this article, we look at the benefits of promoting volunteering to your organisation’s staff and the different ways in which you can support them.


Why encourage your staff to volunteer?

Charities may think that encouraging their own employees to volunteer may simply be taking them away from their desk for no real benefit, but this is far from the truth.

Your employees have chosen to work in the charity sector and obviously want to support good causes.   It is likely that many of them are already involved in some sort of voluntary activity.  By allowing them time to help other organisations, you are both supporting the sector as a whole and showing your employees that you value them and recognise the value of their volunteer work.

Giving a workforce opportunities for volunteering has been proven to improve productivity, morale, and retention.  This is as true for third sector organisations as for those in the private sector.  An occasional change of scene and a bit of variety in a role can make a huge difference in improving someone’s happiness, as well as giving them a new perspective and the opportunity to look at their current role in a new way.

Volunteering is an excellent and extremely cost-effective way for staff to develop new skills and learn from other organisations.  Charities are very good at sharing best practice, but there’s no substitute for being on the ‘shop floor’ of an organisation to learn how they really do things.  Some organisations even include volunteering done in performance reviews and promotion decisions.

Having your own staff volunteering policy in place could help support your argument when going to the private sector to ask for time or funding.  It’s a great way to demonstrate to companies that you truly believe volunteering is valuable.


How can you encourage volunteering?

There are various different ways in which you can approach volunteering in your organisation, depending on the size and make up of its workforce.  When choosing what to put in your volunteering policy, you need to balance the potential benefits of volunteering against any impact of staff being away from their desks.

As a first step, you could take a proportion of your staff out of the office for a short period of time to work on a specific volunteering project.  Many private sector companies approach these opportunities as team-building exercises.  However, these short-term projects can be difficult to organise and don’t always benefit the recipients in the long term.

You could find another organisation to partner with – perhaps a local charity or one with overlapping aims.  You could then ‘swap’ volunteer employees on a regular basis in a mutually beneficial arrangement; both parties learning from one another’s experience.

Probably the most flexible option is to allocate a certain amount of paid leave each year for volunteering.  Each staff member can then choose where, how and when they use their own volunteering leave, and an employee’s support for a charity can be sustained over the long term.

Rather than give paid leave for all volunteering, some organisations choose instead to match employees’ volunteering time.  So for every hour a member of staff volunteers in their own time, they receive a matched hour of paid leave, up to a specified limit.  This requires a bit more commitment on the part of your employees, but can be a less frightening prospect for smaller organisations.

So what next?

Once you have decided which option best suits your organisation, make sure you have a policy in place which is circulated to all employees (you can find an example policy template here).  Whichever option you choose, your employees will certainly be appreciative.  And remember, volunteering must always be optional and must be done for another organisation, not the employee’s own charity, or it is simply extra unpaid work.

TPP give all of our own employees 5 days volunteering leave a year, and many of our staff are trustees or regular volunteers for various charities.  You can find out more about the volunteering that our staff do on our website.


Find your nearest volunteer centre here:
http://www.volunteering.org.uk/where-do-i-start

Five ‘hidden’ employer benefits of flexible working

Recent research from TPP has shown just how valuable offering flexible working can be for non-profit organisations, and the positive effects it brings to productivity, morale, recruitment and retention have been well-documented. However, some organisations are still reluctant to introduce flexible working practices or extend them more widely throughout their staff.

There are benefits that flexible working brings that are less obvious than those mentioned above, but should still be taken into account when considering whether to introduce or extend your flexible working scheme.

Improved diversity

Offering flexible working is one of the key ways in which organisations can build a more diverse workforce. Employees with different lifestyles, family responsibilities or long-term health conditions usually find it difficult to manage a 9-5 office-based job, and flexible working is vital for them.

Diverse workforces have a broader mix of skills, knowledge and experience, giving an organisation more creativity and flexibility to overcome challenges. It has also been proven that increasing diversity leads to better staff retention.

Find out more about improving diversity

Support for local communities

In recent years there has been a growing trend within charities to decentralise resources, as charities increasingly try to keep close to the local communities in which they work. Local communities also play an important part in fundraising.

International development organisations have been at the forefront of this trend, as their service users are in a different country, and often in a different time zone, and on the ground employees can be much more effective.

Some of the larger UK-based charities have set up regional units in satellite offices to encourage localism, but for smaller charities this is not always possible. However, recruiting staff from the local community and encouraging them to work from home wherever possible can help a charity to keep in touch with its service users. It can also benefit the local community as staff spend more of their salary in that area.

Environmental impact

Most charities, whether it is part of their mission or not, tend to act in an ethical manner regarding the environment wherever possible.

According to the Office of National Statistics, the typical carbon footprint of an officer worker is 1.5 tonnes of CO2 per year, compared to the 865 kg footprint of a home worker. That’s a 42% saving, roughly the equivalent of 100 loads of laundry.

Even if it’s not possible to offer full-time remote working, encouraging employees to work some of the time from home and use web- or telephone-conferencing rather than travelling to meetings can all help reduce their carbon footprint.

Cost savings

The average office cost per employee in the UK is £6k per year. That’s a huge amount of money considering the average UK office is only at 45% occupancy over the working day.

In the current economic climate, when charities are being forced to explore ways of cutting costs without affecting their services, this is really a factor you cannot afford to ignore.

Staggered home working, combined with hotdesking, can really improve the efficiency of your office and help bring down overhead costs.

Skills sharing and upskilling

Having staff members who are regularly out of the office can have a positive effect on the team as a whole. Responsibilities and the skill sets they require are more likely to be shared across the team, and the likelihood of skills silos decreased.

This gives employers the opportunity to take over tasks they might not normally handle, allowing them to grow their skills and giving them a more varied work life, which can help boost morale. Spreading skills and knowledge across a team also helps to ensure that productivity does not drop in periods of staff turnover.

However, to really foster a spirit of cooperation in an office, it is important that all employees are given equal opportunities for flexible working. Allowing some staff to work remotely but giving others no flexible options can create resentment and will make it much harder to create an environment in which workers are willing to share their knowledge and skills.

Now is the time

At a recent conference, Transport Minister Norman Baker, encouraged organisations to use the London 2012 Olympic Games as an opportunity to test different flexible working strategies that allow staff to work from home or from offices closer to where they live.

The Family and Parenting Institute expect the Olympics to be a “watershed moment” that embeds widespread flexible working practices in the UK, as organisations create opportunities for flexible working, see the added value it brings, and implement these schemes on a more permanent basis.

Business Secretary Vince Cable has said that flexible working is essential for future growth in the UK, so why not embrace the challenges of the Olympics as an opportunity to harness the full value of flexible working for your organisation?


More information

For more help with flexible working strategies, see:

TPP Blog - Part time workers can add value to your organisation

TPP Blog - 5 ways to engage remote workers

Civil Society Finance - Flexible working: the new normal

HR Zone - Four managerial traits to ensure flexible working works

Small Business Blog - Five Ways Flexible Working Can Boost Productivity

5 ways to engage remote workers

It is increasingly common for employees to wish to work from home on the odd occasion, eg in cases like transport strikes or last year’s snowy weather, or on a permanent basis to give them a better work-life balance.  Many not for profit managers also have to manage ground staff based overseas or in distant locations.

This means that enabling and managing remote working is becoming increasingly important to not for profit organisations - 86% of third sector decision makers say it is their key technical challenge.

But remote working can lead to employees feeling isolated and demotivated, as well as leaving their line managers in the dark about progress.  How can you manage remote staff to make them an effective part of a team?

Why use remote workers?

One of the most common reasons for employees choosing to work from home is to improve their work-life balance, eg giving them time to pick their kids up from school.  Flexible working is one of the key benefits that attracts staff to a third sector organisation (as shown in TPP’s fundraising recruitment survey), so being able to offer remote working is a definite advantage in sourcing top-quality employees.

Working remotely is also traditionally perceived to improve efficiency, as employees are happier and less stressed.  BT claim that flexible employees who choose remote working are 20% more productive than their office-based counterparts, while absenteeism has been reduced by 60%.   Allowing primarily office-based employees to work from home on the odd occasion can also greatly improve morale and therefore productivity.

Remote working also opens up opportunities for people living with disabilities, who might find it hard to work if they had to travel to an office, helping to improve your organisation’s diversity and giving you a wider pool of potential employees.

Many not for profit organisations, particularly those working in international development, prefer to employ local staff who are native speakers to run their programmes overseas.  However, these employees are often ultimately managed from the UK.

Enabling employees to work from home can also allow money-conscious charities to save, as overhead costs are cut and productivity is maintained if staff cannot get in to work, as in last year’s period of snowy weather, in which snow absence rates in the UK were estimated to reach almost 14% and cost the economy £0.5bn a day.

1.  Hire the right employees

Managing your home workers to ensure they stay effective starts right at the point of recruitment.  Selecting the right staff is important – look for employees with previous successful experience of remote working and justifiable reasons for wanting to work from home.  Even if they are not office-based, it is still important that they fit with the organisation and team culture.

It is also important to make sure that contracts set down the terms of remote working clearly, and measures of performance are in place from the start.   Make sure these are consistent across all your remote and office-based staff to avoid generating resentment.

Also detail the parameters of this type of work arrangement. If employees are working off-site, how quickly do you expect them to respond to e-mails, pages or phone calls? Can they work a flexible schedule or do they need to perform their jobs during specific hours? What technologies will be made available to employees to facilitate working remotely? How many days a week can people telecommute? etc.  Not every position lends itself to a teleworking arrangement

The more effort you put into defining requirements such as these early on, the less complicated it will be to supervise people once they are off-site.  TPP Not for Profit has recruited many remote workers to the third sector, and we can offer great advice and help to organisations looking to recruit home workers.

2.  Keep remote workers included

Managing remote workers is all about inclusion – it is all too easy to overlook employees not in the office.  Include remote workers in all team meetings, either in person or via a conference call or on speakerphone, and make sure they are invited to staff events, even informal ones like team drinks.

Lack of opportunities to chat informally with colleagues can also hinder working relationships, as it makes it harder for fellow employees to build the rapport that helps with collaborative projects.  Encouraging all group members to hold frequent discussions can help to keep teleworkers engaged, even if it’s just to let everyone know that work is progressing to schedule.

Where possible, you should also encourage your remote workers to visit the office on a regular basis, eg for monthly catch-ups or for important group meetings.  This allows them to meet their colleagues face-to-face.  If this is not possible, organisation charts and staff profiles with pictures can help remote employees put faces to names.

3.  Train in steps

It’s important to make sure that remote workers aren’t forgotten about when it comes to staff training, both at the start and throughout their careers.

When office staff are trained, a manager can constantly oversee their progress and give instant feedback.  With remote staff, this process is much harder but can be avoided by training in chunks, or scaffolding.  Essentially, the training programme is split into steps and a new employee must be able to demonstrate that they are fully competent in each stage before they can progress.

Training this way means that a manager can be fully confident that their remote employee can handle tasks on their own without constant feedback and support.

4.  Set goals and monitor progress

It is usually necessary to have a more formal schedule of update meetings with remote employees than office-based staff.  Ideally, you should aim to have a quick daily phone call with each remote worker, followed by a longer weekly catch-up.

You need to be even more clear when setting goals for remote workers; making sure that the expectations of both parties are agreed at the start of each project and a schedule of formal contact to monitor progress is set.  There should be clear procedures in place for remote workers to follow and people to contact if things start to go wrong at any point.

When it comes to monitoring the productivity of remote workers, managers have an advantage, in that there is usually an extensive document trail to help them investigate concerns or problems, for example by checking when employees were logged into a network.

5.  Keep improving your processes

If you are successfully using remote workers, it is important to keep evaluating and improving your processes.  Feedback from both remote and office-based workers about how the situation is progressing is vital to make sure both sides remain happy.  New technology is constantly being developed that can help to make remote workers more integrated with the rest of the team.

Most importantly - don't distance yourself from team members. Be available to them, this will increase the trust they have in you and let's you show them that you respect them.

Examples

Some case studies on remote working from the not for profit sector:

ramsac Provide CHASE hospice care for children with Remote Working
NPC slashes ICT costs and risk to maximize its impact
Home-based workers fundraise for charity: Actionaid's NTT operation
Case Study: Merlin Life-saving Communications at an Affordable Price
Case Study: New Charter Housing Group
Case Study: ActionAid

The Pitfalls of Ignoring Poor Performance

Charities are continuing to feel increasing economic pressure and this is having a negative effect on staff morale.  60% of charity staff have experienced redundancies in their organisation, and 55% feel their workloads are getting heavier, leading to stressed and unproductive employees.  And with half of voluntary sector leaders expecting their organisation’s situation to worsen over the next 12 months, the situation is not likely to improve in the near future.

However, not for profit organisations can be reluctant to tackle poor performance in the workplace - only 57% of staff reportedly receive useful feedback on how they are performing.  With over 218,000 employment tribunal claims brought last year, and charities particularly vulnerable to claims, failure to manage underperformance can have serious consequences for charities.

In this article, TPP examines the most common reasons for failing to tackle poor performance, and why these are misconceptions.



"Nonprofits should be kind"

This is an extremely common problem in the not for profit sector.  Most charities recognise that their staff often accept lower pay than in the private sector but expect a higher level of job satisfaction.  Combined with the fact that charities exist to promote ethical values, this can often lead managers to want to be “kind” to their employees, and turn a blind eye to underperformance.

However, failing to tackle poor performance at an early stage is more often than not an unkindness, both for the organisation, whose effectiveness will suffer, and for the employee themselves, who will continue to underperform until their manager has to tackle the problem, which can be a set up for an unfair dismissal claim.  Unproductive employees are also usually unhappy in their job, and treating the problem can improve morale all round.  Being a supportive manager, who proactively handles performance and develops their employees, is not being unkind. Allowing people to fail is unkind.

“We need to follow this through by managing poor performance when it arises. Anyone who hides behind the charity mask on this one and feels it is not compatible with being nice to people is not being professional or businesslike - nor maintaining the charity ethos.”
Valerie Morton in Third Sector magazine


Fear of litigation

Charities are usually heavily reliant on their public image to bring in funding and volunteers, and so are reluctant to enter situations where litigation might result which will give them negative press.  Charity employees can be more willing than most to bring a claim against their employer if they feel they are being treated unfairly, as they have an innate sense of justice and fair play.  This means that voluntary sector managers can be unwilling to speak to employees about poor performance and scared of getting into situations which they feel may eventually lead to dismissal.

Once again, the solution to this is to tackle poor performance at an early stage, rather than simply ignoring it.  Properly handled, an employee may well improve their effectiveness, avoiding the need for dismissal.  But if it does get to that stage, an employee is more likely to feel aggrieved about being dismissed if their employee has not attempted to address and solve the issues leading to the underperformance, and will almost certainly have a stronger case at tribunal because of this.


Worrying about morale

In the current economic climate, when many charities have experienced downsizing, many managers are concerned about maintaining the morale of their team and fear that confronting an employee, particularly one that is popular with the rest of the staff, about their performance may lead to a wave of fear among the team and a drop in morale.

In this scenario, managers are assuming the worst.  Handling unproductiveness sensitively and at an early stage can lead to the employee becoming both more productive and more satisfied, which is likely to positively affect the rest of the team.  If this does not happen, and the process eventually leads to a dismissal, there certainly is a risk that the rest of the team will become worried, but reassurance and support can help to tackle this.  However, leaving that employee to carry on as they are will definitely lead to a drop in morale as the rest of the team have to make up the slack.


Extenuating circumstances

A common reason for underperformance can be personal problems that are unrelated to work.  If a manager is aware of these circumstances, they could very well be tempted to let poor performance slide on the assumption that the employee’s effectiveness will improve once the situation has been resolved.  However, simply ignoring the issue is doing the employee no favours.

Talking through the issue with the member of staff will alert them to your concerns, demonstrate your support in their situation and may lead to a mutually beneficial solution, such as allowing them to take a paid leave of absence.


Losing a star performer

Sometimes, an employee can be a high performer in numerical terms, but can still require performance management for unacceptable behaviour, such as negativity, dishonesty, harassment or bullying.  Managers may be reluctant to tackle this behaviour, even if it is having a negative impact on the rest of the team, for fear of losing their star performer.

Leaving this kind of behaviour untackled ends up sending a message to the rest of the staff that conduct like this is acceptable as long as targets are met.  Staff may become disillusioned and leave due to perceived unfairness.  Performance management should always have the welfare of the team as a whole in mind, not just that individual.


Conclusion

If your beneficiaries are likely to suffer due to a drop in team productivity and morale, is there really any excuse that could be valid for failing to deal with poor performance early on?  A good manager should be able to effectively communicate and document an employee’s poor performance in a timely manner, so that any disciplinary action is never a surprise. If it does happen, it should only be the culmination of a process where the manager is sincerely working to change an employee’s behaviour for the betterment of the organization.


Resources

Further advice on performance management and involuntary redundancy:
KnowHow NonProfit
CIPD
10 point checklist for confronting poor performance
Crash Course: Seven ways to manage poor performance

Training
CS Skills Centre - Managing poor performance
The Centre - Managing poor performance, absence and stress

Healthcare Conferences UK - Managing Poor Performance and Supporting Nurses in Difficulty

Forms & Templates
Various forms are available from HR Bird

Finally, for further guidance on how NOT to conduct a performance review, learn from the master - David Brent.

5 common traps to avoid when conducting appraisals

Annual performance appraisals can be an essential tool to maintaining success in not for profit organisations, but many employees view the appraisal process as a box-ticking exercise that never leads to real change and is only useful for inspiring Dilbert cartoons.

But if done correctly, appraisals can recognise, reward and promote excellent performance, establish baselines for employment decisions and provide notice to employees who need improvement or development.

Appraisals can only achieve this if done properly and poorly-conducted appraisals can do more damage to an organisation than not holding any at all.  Here are some common mistakes that managers make in the appraisal process and what you can do to avoid them.


1. Over-generous evaluations

Many top companies force managers to force-rank employees during appraisals, so only a set percentage of employees can ever receive the best performance rating.  While this may be too harsh for the not for profit sector, giving employees an over-generous evaluation can lead to a number of problems.  It’s easily done as managers usually want the best for their employees, but it can provide those staff members with a false sense of security and devalues above-average performance by others.  And if an employee is criticised or penalised for performance issues in the future, any discrepancy with their appraisal may give them a basis for legal action.

There are two key ways to avoid this.  When judging an employee’s performance, consider each criteria as average to start off with and then adjust up or down.  It is psychologically much easier to give an employee an accurate evaulation this way than grading down from a perfect score.  The other method is to judge an employee against their peers – is their performance stronger or weaker than average?  This will help make your best (and worst) employees stand out from the average majority.


2. Focussing on most recent performance

When preparing for an appraisal, the last few months will obviously be foremost in your mind.  But an effective annual appraisal must give equal weight to the full 12 months, or employees who have a burst of productivity right before an appraisal will have an unfair advantage over those who have produced consistent results over the year.

Managers should also keep track of their employee’s performance over the year and bring up any variations between time periods.


3. Obsessing about quantifiable data

Managers often feel that in order to deliver objective evaluations, they have to stick to performance data that can be quantified, or counted.  However, objectivity simply means that opinions must be given without personal prejudice, not that opinions should be discounted in favour of figures.  After all, success in many roles is simply not quantifiable.  It’s always best to give solid examples of past performance to back up an evaluation, but they do not necessarily have to consist of countable units.

After all, the most important questions for an employee in an evaluation are things like: How am I doing?  Are you pleased with my work?  Is there a future for me within this organisation?  None of these questions have quantifiable answers.


4. Lack of focus on performance

A good appraisal is about only one thing; how well that employee has achieved their job goals.  Therefore, any discussion about timekeeping, attitude, dress etc should not be included in an appraisal discussion unless it directly affects an employee’s performance.

There is a natural human bias for managers to favour employees who think and act like themselves, which can give some staff an unfair advantage at appraisal time.  It is much more important to concentrate on whether an employee delivered the desired results than whether they followed the same process you would have done.

Sticking purely to results will also help to avoid inadvertent stereotyping, such as penalising employees who may appear less dedicated because they don’t stay late at night.


5. Treating appraisals as negotiations

Many appraisals are prefaced by both the manager and employee completing the same evaluation form.  This can have the unfortunate effect of making the appraisal into a negotiation as managers compromise in order to gain agreement from the employee.

While self evaluation is a useful starting point, ultimately the appraisal is a formal record of your opinion, as the manager, on the quality of the employee’s work.  Employees should be asked for their opinions on any feedback they are given, but the objective of this is to ensure that they understand your perspective, not to ensure that they agree with it.


An effective performance appraisal process can be an extremely valuable tool for any organisation, but in many of them the process has overshadowed the effect.  Simply filling out forms and conducting interviews does not measure employee performance.  Make sure you are not sabotaging the effectiveness of your appraisals.

More advice on conducting appraisals is available from the CIPD.






Note: This article should not be construed as legal advice pertaining to specific factual situations.

How to stop your best employees leaving

The New Year is traditionally a time when disgruntled employees consider making a change and dusting off their CVs – as many as 1 in 4 employees say January is the most likely time for them to leave their roles.

The third sector had a staff turnover of 20% in 2009/10, significantly higher than the 13.5% UK national average, and expectations of increased stability in the economy is likely to make this percentage even higher this year, as employees feel more confident about leaving their existing jobs.

So how can not for profit organisations tell if their valuable staff are considering leaving, and address underlying issues before they lead to a resignation?

Look for danger signs in your staff

Employees often make changes in their behaviour when they are feeling unhappy at work.  It is important for managers to pay attention to these indicators and not ignore them.  Typical warning signs include:

• Increasing lateness or absenteeism
• Drop in productivity
• Employee seems stressed or hostile
• Employee is much quieter than usual
• They request holiday one day at a time
• They stop volunteering and are not enthusiastic

Get to the bottom of the problem

If a manager spots any of the above changes in an employee’s behaviour and suspects they might be considering handing in their notice, they need to act fast to discover the underlying reasons.  Arrange a meeting with the staff member and keep probing to get to the bottom of the problem – don’t simply accept the first answer given.  It is important to listen to the employee’s answers and not to give your opinions of their situation or jump to conclusions.

Don’t fall into the trap of assuming all problems are salary-related.  Most employees cite pay as their reason for leaving, and in some cases this is true, but it is often used as an excuse as it is a ‘safe’ and incontrovertible answer.  As long as an employee feels they are being paid adequately, more money won't buy more motivation or loyalty.  For more information on motivations for non-profit employees leaving roles, see TPP’s recent Fundraising Recruitment Survey.

Look for solutions

Once you’ve got to the bottom of any problems an employee is having, it is vital to come up with a plan to solve them, or at least stop them escalating.  Together with the employee, a plan of action should be agreed on, and the manager must take responsibility to ensure that it is pursued.  Each action point should play to an employee’s strengths and should be an actual, not just verbal, change.

Solutions you might consider include:

• Changing the employee’s role
• Adjusting the employee’s level of responsibility
• Flexible working
• Increased employee recognition
• Better internal communications

What if they have already resigned?

If an employee has already handed in their notice, but their loss is likely to drastically effect your organisation, you may wish to consider making a counteroffer.  However, any successful counteroffer is likely to require a financial incentive, which will make the employee question why they were not receiving that level of pay before.

The counteroffer with the greatest chance of success will consist of a package of solutions, such as increased responsibility and recognition, together with a pay increase.  Of course, it is always better to make sure that such a valued employee never gets to this stage.

Is it worth the effort?

Before undertaking any action, you need to weigh any possible consequences against the value of the employee.  In some cases, the departure really is best for both parties. An unhappy employee is difficult to manage, tends to disrupt the effectiveness of his or her team, and will most likely leave eventually anyway.

However, for your most talented people, a concerted effort to solve their problems can lead to them becoming even more motivated and loyal to your organisation.

Case studies

Here are just a few examples of charities that have successfully implanted strategies to reduce their staff turnover:

•    Cancer charity, Marie Curie
•    Disability charity, Leonard Cheshire
•    Youth charity, YouthNet
•    Health charity, Autism Plus
•    Tower Homes, a London housing association
•    Children’s charity, Children’s Links

How TPP Not for Profit can help

One of the best ways to increase your employee retention is to hire the right staff in the first place.  Taking your time and getting expert advice can help you find exactly the right person for you team, meaning they are more likely to stay long-term.  TPP’s consultants are sector specialists who can give you advice on benefits and remuneration packages and make sure you find exactly the right employees.

For more information, contact TPP Not for Profit on info@tpp.co.uk or 020 7198 6000.

5 low-cost ways to keep your staff motivated

In the current economic climate, many non-profit organisations are struggling to balance their books at a time when there is often increased demand on their services.  Their senior management are having to make some tough choices, such as making redundancies, freezing pay and slashing budgets, which can have a very negative effect on employee morale and engagement.

Traditional methods of boosting morale, such as financial incentives or staff benefits, may be simply unachievable for an organisation already under great financial pressure.  But failing to tackle these problems could lead to higher staff turnover and decreased efficiency.  So how can you keep your employees happy and motivated on a budget?

1.    Communicate

Perhaps surprisingly, in times of change, the best influencer of morale is always cited as better internal communications.  When staff are feeling unsettled, openness and honesty about the situation and its effects is always preferred to silence, even if the news is bad.  When managers may have to cope with a smaller workforce and increased time pressures, it can be tempting to drop regular communications, but taking the time to update employees is still vital.

It is also important that communication is a two-way process.  Brainstorming or consultation meetings, or even a suggestions box, can help staff feel that their opinions are being taken into consideration.  However, this process needs to be carefully managed and all suggestions need to be responded to and actions resulting from them explained, even if the idea is not feasible.  Ignoring suggestions can be worse than not asking for them in the first place.

Find out more about effective internal communications here.

2.    Reward and recognise

Traditional employee benefits, such as private healthcare or life insurance, can be expensive, but it is possible to reward employees on a budget.  Many organisations now offer their staff access to retail discount schemes, which allow employees to purchase discounted goods at a range of high street retailers, petrol stations, supermarkets and local businesses, either using paper vouchers, virtual banks or pre-pay cards.  There are many companies that can set this up for you, or your organisation could create its own scheme by approaching local businesses.

Your organisation could also consider offering salary sacrifice schemes, such as those for childcare, bicycles or public transport.  These initiatives are not subject to tax or National Insurance, making them financially beneficial to both you and your employees.

Rewarding employee success, for example by holding corporate awards events, can be expensive, but it is possible to recognise achievement on a budget.  A manager should always remember to thank an employee personally for an outstanding piece of work and simply sending out a group email to mention a team or individual’s contribution can generate goodwill through public recognition.

3.    Keep your staff healthy and happy

Increased workloads and fewer resources are a common symptom of economic pressures, and can lead to staff suffering from stress.  Recent research from leading mental health charity Mind shows that one in five workers have called in sick with stress, but almost all of these do not disclose the real  reason for their absence.  This can create staffing problems for management which can be difficult to solve if the underlying cause is not recognised.  The best ways to tackle this issue is ensuring that workloads are spread among staff, training managers to recognise and effectively deal with stress symptoms, and creating a climate where employees can be honest and open.

For more information on tackling workplace stress, visit the Mind or CIPD websites.

4.    Train and develop

Offering training and learning and development opportunities is one of the best ways to keep your staff engaged, as they continue to grow and develop.  These do not have to be expensive events using external professionals.  Make effective use of your internal resources – encouraging your best staff to coach or mentor others is motivating for both parties.

Identify key skills required for each career path, and create a personal development plan for each employee to map out their route along this path.  You can then ask their peers, senior management and HR professionals to run formal or informal training sessions based on these key skills.

Find out more about learning and development here.

5.    Control your environment

People that are happy within their working environment will work far more effectively and happily than those who are uncomfortable: it therefore makes sense to consider certain aspects of your employees workspace quite carefully.  However, you don’t need to spend huge amounts of money on interior decoration to improve your environment.

Consider encouraging employees to bring in pot plants, photos or other personal items to decorate and personalise their desks.  Allowing employees to change their workspace has been shown to help create a more attractive and stress-reducing environment.  In addition, simply ensuring that blinds or curtains are fully open in the day will bring in more daylight and can positively affect staff productivity.

Why not hold a dedicated decluttering day, where all teams work to clear their areas of clutter, unfiled or old paperwork, unused office supplies etc.  As well as creating a better working environment, this can help make sure resources are used more efficiently.


For more about the theories behind employee motivation and engagement, visit KnowHow NonProfit or CIPD.

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