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Lesson From Zynga: Perks Are Not More Important Than a Business Plan

A cautionary tale from Silicon Valley shows why you should resist the arms race for employee perks.
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Silicon Valley businesses know that perks are easier than business plans. People like perks. Everyone from your lowest and newest and most incompetent intern to your senior vice president can see a free lunch and go--ooh, good company! Free lunches and onsite gyms can convince people that things that are otherwise bad are actually good because they are getting free stuff from the company.

Zynga just laid off 18 percent of its workforce. Yikes. That is a huge percentage. The company had a gym and unlimited vacation and, and, and... And it didn't do a lot of good when their business model became unsustainable.

I admit, if I had two very similar job offers, but only one offered me free lunch, I'd be inclined to take the job that came with free lunch. But, if was doubtful that the company offering free lunch was going to be in operation in a year--or even in five years--I wouldn't trade a few sandwiches for job security.

Because perks cannot replace a solid plan. Employees do like perks, and many perks are inexpensive. But, bottom line, your employees prefer having a job over not having a job.

Here's what your employees are looking for:

A stable company. When a company is growing or even just maintaining, employees feel comfortable planning their future around your company. Yes, some will leave and you'll have to replace them, but that happens no matter what. They want to be able to feel that they'll have a job tomorrow as well as in two years.

A regular paycheck. When interviewing and job hunting everyone likes to pretend that they just want a job for the personal fulfillment and the fact that they have great skills that will help this company grow--as if it's an altruistic thing. Reality? Most people are working for the money. And they want a regular paycheck.

Feedback from the boss. Positive and negative, but mostly positive. Most managers ignore the good. Many ignore the bad as well--until it gets so bad that everything explodes. A little feedback on a regular basis keeps everyone happy.

Communication from above. You have a solid business plan. Do your employees know about it? I'm not talking about your inner circle, I'm talking about people who you don't think really need to know. The woman in accounts payable--she just gets people to pay, so she doesn't need to know what the plan for the future is, right? Wrong. Everyone needs to know where the company is headed.

Bad news. Not that employees want things to be bad, but they should know when it is. They should know what and where the problems are so that they can fix it. You may have a solution floating around in someone's head, but you won't know about it if they don't know that you need a solution. Yes, it's true that if you let your employees know when there are problems more than one might jump ship. But, it's also true that if you don't let them know, they can't fix it.

Fairness. By fairness I don't mean equality. I'm not a fan of making things equal--people are different and contribute on different levels. But, I am a fan of fairness. Which means that they should be able to count on you to do what you said you were going to do . It means that when there's no money for the individual contributors on  staff to have a bonus, there shouldn't be money for the VPs to have a bonus.

Perks. Yes, perks are  good thing. But, they aren't the first thing an employee wants. Don't be stingy when you don't have to be, but don't sacrifice quality and good business sense in exchange for an onsite gym either.

Last updated: Jun 6, 2013

SUZANNE LUCAS | Columnist

Suzanne Lucas spent 10 years in corporate human resources, where she hired, fired, managed the numbers, and double-checked with the lawyers.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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