Culture is free
"The best perks at work are free. The second best are very, very expensive." - Corporate Coco Chanel
A common misconception amongst technology companies is that you can’t have a great culture without showering employees with perks. And if you don’t have a great culture, nobody will want to work for you.
This has created a race to the bottom where companies compete on who can offer the most stuff on top of a salary. It ranges from the conventional, like gym memberships and free meals, through to the confusing, like being able to start at a different time each day,1 and the excessive, like bonus paid time off for literally anything.
These perks are expensive, patronizing and often unevenly distributed in a way that’s unfair. I think most people would be happier to get paid the equivalent in extra cash. But the flood of perks is coming coming from good intentions - everyone wants to work at a company that has a great culture. The problem is that companies everywhere have forgotten a fundamental truth: culture is free. In fact, it’s free in two senses of the word:
Great culture costs nothing
A great company culture should cost the company very little.
Countless studies have looked into what motivates people to work. One of the most widely agreed on theories is Herzberg’s two-factory theory. In a nutshell: some factors in the workplace cause job satisfaction (“motivators”), while others (“hygiene factors”) cause dissatisfaction.
The presence of hygiene factors makes people dislike their job. For example, if you are paid badly and aren’t allowed to take time off, you’ll probably want a new job. But the absence of hygiene factors does not make someone happy or motivated - it just gets them to a neutral point.
Motivators lead to increased satisfaction at work, which in turn leads to improved performance and substantially improved retention, particularly if most hygiene factors are taken care of. Motivators are all broadly related to the personal or professional development people gain through being challenged and doing a good job. For example, if you can learn a new technique, apply it to a project, and teach it to colleagues you respect, that’s enormously motivating.
Herzberg didn’t delve into the cost of each factors, but look at the examples he provided and think about the cost of them:
Salary, fringe benefits, paid insurance, vacations: expensive!
Challenges, recognition, responsibility, involvement in decision making: cheap!
If you have a company where everyone is highly motivated to do a great job for themselves and for each other, everyone will describe the culture as amazing.
Instead of focusing on motivators, so many technology companies spend a fortune offering perks that do not drive employee motivation. They’d be much better off putting the same focus - and a lot less money - into creating a work environment full of intrinsic challenges.2
Here's an example: many companies give employees a welcome pack when they start. Sure, you should give your employees a t-shirt with your company name on it. But do they also need company branded chocolate and Yeti water bottles? When new developers start, I give them a copy of the Ruby on Rails Tutorial. It costs about as much as the water bottle but will add infinitely more to their career.
Does this mean that I’m a grinch who doesn’t believe in Christmas parties? Not at all. Part of building a great team is creating time & space to hang out and get to know each other better; this makes it more rewarding to contribute back to the team. But it’s very easy to take it too far, and very few people will ever ask for less perks, even if it would probably be better for them if that’s what they got.
Great culture happens organically
Great culture is free to develop. It is not imposed from the top down.3
Many companies are obsessed with creating a culture. Generally this comes across as forced and lame. For example:
Non-optional work events outside hours
“Team building” activities
Company-paid-for “social” sports teams
Management giving people nicknames or making PC jokes at award ceremonies4
By contrast, in teams that have a strong cohesion, people will organically organise ways to hang out. You don’t need management making it happen. A strong culture might look like:
Colleagues getting beers - at the office, or at the pub - because they feel like it.
A cross-functional soccer team that forms organically over lunch.
Inside jokes that are actually inside jokes.
Maybe that sounds a bit more clique-y. That’s not a bad thing. If everyone gets along really well the shared sense of trust and purpose will elevate the team to much higher heights. But this can never happen if it’s forced.
You can’t force culture
“We need more culture” is something you should say if you’re making yoghurt. In any other business, let it happen organically by focusing on keeping everyone challenged and achieving great results as a team. Everyone will be much happier than if you threw another lame party.
Ironically this was touted as a mental health benefit. A good way to improve your sleep (and thus your mental health) is to wake up at the same time each day.
If they can’t do that, they’d be better off cutting perks, raising pay by the same amount, and being less paternalistic.
Okay, this was a stretch.
aka. the Dundies. Basically, if they did it in The Office, you shouldn’t do it!