Let’s Make an ‘I-Deal’? When Employees Want Special Benefit Arrangements

Balance flexibility and fairness when employees ask to tailor benefits to their personal needs

By Stephen Miller, CEBS Jun 23, 2017
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Employees often try to negotiate with their employers arrangements that take into account their individual needs—such as asking for more-flexible work hours, a reduced workload, more pay or special training. These arrangements—known as "idiosyncratic deals," or "i-deals"—are sometimes in the interest of both the employee and employer, especially if such deals make employees more motivated and committed to their jobs.

But they also can create jealousy, envy and conflict in the workplace, a recent study found.

The research, published in the January 2017 issue of the Journal of Business Ethics, examined how co-workers view i-deals and looked at practical considerations for managers and HR professionals. The study was conducted in Belgium with responses from nearly 2,000 employees.

"More and more people want to be treated as individuals with their own special needs, desires and expectations," said study co-author Elise Marescaux, an assistant professor in human resources management at IÉSEG School of Management in Lille, France. "But this can create jealousy, envy and conflict in the workplace."

In general, i-deals involving financial compensation were viewed to be the most unfair, followed by flexible hours and reduced workloads, the study found.

The researchers said co-workers are more likely to understand when a company grants nonfinancial benefits because of an employee's personal needs (such as a single parent who has to pick up her children at a certain hour, or an employee who needs to take care of his sick wife). Justifying financial rewards, however, is more difficult, they noted.

The researchers were surprised to find that a reduced workload was considered the most fair benefit—more so than flexible hours—even though this would presumably mean more work for the team. A possible explanation, they suggested, is that reduced workloads are often granted to address serious health, stress or caregiving issues, while flexible hours are often requested to accommodate routine schedule conflicts or an employee's preference to start and leave earlier or to start and leave later.

[SHRM members-only toolkit: Introduction to the Human Resources Discipline of Employee Benefits]

A Fair—and Transparent—Workplace

"What's behind the results is that it's very important why a person gets an i-deal," Marescaux said. "If employees understand why it's necessary to give someone a specific deal, then they will be much more understanding."

She warned against trying to keep special arrangements under wraps, especially since i-deal benefits such as a flexible schedule or special training would soon become obvious to fellow employees. "Secrets don't stay secret," Marescaux said. As evidence, she cited the case of a manager who privately—and falsely—told various team members that they were earning more than their co-workers. "It blew up in his face. Everyone found out … and it led to huge distrust toward the manager."

Practical Considerations

A manager who offers an employee a special benefit should consider the effect on that person's co-workers, especially when team members depend on one another to get their work done, Marescaux advised.

"When working in a team environment, giving people special deals is going to be a struggle," she said. One suggestion for managers is to cede decision-making powers about special arrangements—such as flexible hours or a reduced workload—to the group. "If the team gets to decide, then the team will consider it more fair because they made the decision," she noted. In doing so, however, "you lose your power as a manager, which is a tricky thing."

Barring allowing the group to make the decision, Marescaux recommended that managers:

  • Communicate to the team when benefit accommodations are being made.

  • Justify special arrangements as objectively as possible.

  • Find solutions to practical problems that the deal might create, such as coordination issues among co-workers.

I-deals Bring HR Opportunities and Challenges

Marescaux's research builds on ideas initially explored by Denise Rousseau, a professor at Carnegie Mellon University's Tepper School of Business, in her book I-deals: Idiosyncratic Deals Employees Bargain for Themselves (2005, Routledge). Rousseau warned that i-deals should not be confused with preferential treatment, which "arises when managers and other agents of a firm favor certain workers over others because of their personal relations or political ties," resulting in favoritism, cronyism and "shady deals."

In contrast, "i-deals are negotiated around the interests of both worker and firm" and strengthen their relationship, while preferential treatment has adverse consequences such as "eroding trust, undermining cooperation within the firm and challenge the legitimacy of the firm's practices," Rousseau explained.

While i-deals make it possible for workers to meet needs that their employer's standard practices do not fulfill, Rousseau noted, they also "pose a dilemma for both management and HR professionals. Though consistency is an important element in a procedurally fair HR system, some degree of local flexibility is needed to adapt to changing circumstances." The tension between consistency and flexibility in HR policies "is not a problem to solved but a fact to be managed."


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