Case study: Facebook

Facebook’s senior management team may be one of the world’s most famous, but the company aims to be blind to rank when it comes to dishing out non-cash benefits.

These days, companies are using non-cash benefits as a means of gaining an advantage in the war for talent. But at Facebook, benefits are doled out not with the intention of making the company seem “cool”, but rather with the main objective of streamlining productivity.

“We focus on making sure our benefits have high impact and it has to make the lives of our employees much easier,” Madan Nagaldinne, head of HR for Facebook APAC, says.

One of the biggest benefits Facebook Singapore offers its employees is reimbursements for breakfast, lunch and dinner. They have a “very generous limit” for this and it is not seen as part of an employees salary.

Nagaldinne says the money Facebook spends on non-cash rewards like this is a small price compared to the culture the rewards aim to build.

“We look at it as saying we’ve got a mix of people whose focus is so intense on the job that we need to make the other aspects like going and finding food less of a distraction because it takes away their focus from their core job.”.

Facebook has also realised the importance of understanding the needs of employees when giving benefits, which not only impacts them professionally but also personally.

This includes paternity benefits for two weeks, which was introduced long before the paternity debates started in Singapore.

Nagaldinne said the idea surrounding this benefit is not to do it because other companies are - but to focus on being innovative with the intention of making an impact.

On the topic of innovation, another non-cash benefit offered is medical coverage for domestic partners – a by-product of being in a multi-cultural, multi-racial workforce.

“In some cultures, people are in a committed relationship but are not necessarily married. We believe if you need to have a significant other who needs to be covered, he or she will be covered,” Nagaldinne says, adding the company works on an honour system.

“We don’t look at the marriage certificate as the only requirement for you to have your significant other to be covered,” he says.

It is in the same vein that Facebook believes there is no need to police benefits.

“In today’s world, would you ration pens and pencils? You wouldn’t - you would keep it somewhere people can go and pick up. Today, the equivalent of pens and pencils is IT infrastructure. Why would you want to police it when you should be giving people more and more access to it because that helps you stay ultra-productive?” Nagaldinne asks.

This egalitarian benefits structure thrives at Facebook, and Nagaldinne says it is the biggest thread keeping the company’s culture intact.

He says this is especially critical in today’s knowledge-based economy, where there is an expectation that companies put employees in the centre of everything they do.

Moving forward, he says HR leaders has to remember the core differentiator is going to come from talent.

He says he often tells other HR heads to challenge their hierarchy-based approach of doling out benefits.

While you can certainly use performance to differentiate compensation and title - because you can’t run a company with no structure - Nagaldinne said that should not be the case for benefits, which should not be policed and should simply be a benefit.

“If you put hurdles and you have to go through four people to approve of you getting a laptop, it’s not going to work.”