According to recent Gallup polls, only 29% of North American employees are actively engaged in their jobs. And that is a comparatively high number; the world average, says Gallup, is around 13%.  Of 71% not engaged, 25% of those are actively not engaged. That is not soothing news for employers.

Do perks, especially gimmicky ones, create more engagement? They are certainly fun, but they generally don’t translate into measurably more productivity or engagement. Think about the companies that offer free lunches, unlimited vacation time, foosball rooms, concierge services, wine bars, workout rooms, cruises, and the like. Some of these costs add up, and big time.  Is that really what employees want?

Not according to some leaders whose companies provide such perks. Deborah Beetson, Regional Manager for DPR Construction in south Florida, on Fortune’s 100 Best Companies to Work, hosts a catered lunch once a month and regular bagel breakfasts. She also invites clients to the wine bar at her West Palm Beach office. But, Beetson says, it is not the wine bar, free meals or even the bring-your-dog-to-work days that keep her engaged. “The perks are there to make it a fun place to be, but if you don’t believe leadership cares about you and values your opinion, then perks lose their meaning.”

“Perks can attract people and make them feel content, but they won’t get employees to a high level of engagement,” says Jim Harter, Gallup’s chief scientist of workplace management and well-being. And, once these perks become part of the culture it is difficult to get rid of them, especially in a downturn economy. Employees may feel entitled to them, and stopping them can generate a lot of ill will. For example, when Hewitt Associates (now AonHewitt) went public, it dropped many of the perks it offered when it was a private company. To its employees at the time, it appeared to become a company that only cared about stock price and making money.  Employee turnover followed.

So what should companies do to create greater engagement, if it is not gimmicky perks?

Throwing money at employees is not the answer either, apparently. A recent study by Towers Watson found that it is the expectation of receiving much higher pay upon becoming CEO that keeps successors in place. The study found that actual pay level plays only a marginal role in retaining the number-two executive. Further, the pay difference between the CEO and the next-best paid executive is irrelevant to whether the latter goes or stays on board. Rather, it is the expectation of rewards upon being promoted that is more likely to keep an employee, not the actual pay itself.  This is not to say pay is not important; rather, it is not a major factor in engagement and retention.

True engagement comes when managerial decisions are cascaded down, making lower-level managers and supervisors and employees “owners” of the organization. In a manufacturing environment, it means cascading decision-making to those on the floor. That demonstrates trust in the employee, and the employee will feel ownership of his or her job. As an “owner,” the employee will take special care. 

Communication is also a very important key to engagement.  Management cannot operate in a vacuum. It must let people know what is going on, what their expectations are in performance, and then act consistently to the messaging. Consider the “stoplight” approach to safety in manufacturing. Making everyone aware of the operations ongoing safety record keeps workers engaged in safety issues and reduces Workers Compensation costs.

It is also important to remember work/life balance.  Researchers studying Great Places to Work found that employees want to feel the work they are doing is important and to trust that their managers care about them as individuals.  “Managers can’t forget that these are people who have a life outside of work they are actively trying to manage,” said Jessica Rohman, program director at Great Place to Work Institute. Even employees at companies considered great places to work report disengagement when bosses don’t understand how accommodating unplanned life needs affects work commitment. “It’s that understanding that fosters a sense of trust,” Rohman says.

Source: Gallup 11/4/2013, The Miami Herald 2/26/14, Towers Watson 3/13/14