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Commentary: The dark side of corporate perks, how some companies exert control over workers

There’s a reason labour historians call these perks welfare capitalism, says University of Oregon Elizabeth C Tippett.

Commentary: The dark side of corporate perks, how some companies exert control over workers

Employees at BaishanCloud, take a nap after lunch in individual sleeping quarters, in the office, in Beijing, China, April 26, 2016. (Photo: REUTERS/Jason Lee)

EUGENE, Oregon: Companies offer all sorts of benefits and extras to attract the most favoured workers, from health care and stock options to free food. But all those perks come at a price: Your freedom.

There’s a reason labour historians call these perks “welfare capitalism,” a term that originated to describe company towns and their subsidised housing, free classes and recreational activities. Like government welfare, offering any benefits that people come to rely on is also a convenient vehicle to mould their behaviour.

And just as Henry Ford sought to transform auto workers through a generous though invasive profit-sharing programme, today’s employers also use perks to influence our behaviour in subtle and not-so-subtle ways.


You might think of compensation in terms of your hourly wage or salary. Companies see it differently.

Back when I drafted employment contracts and policies as an employment lawyer, companies tended to think in terms of “total compensation,” which also included commissions, bonuses, stock options and sometimes benefits like medical insurance and vacation. And that’s where they stand to influence behaviour.

Under state and federal law, companies aren’t allowed to mess around with your hourly wage. A company can’t dock an entire day’s pay if you show up five minutes late. Or issue paychecks only once every six months.

However, that’s not true of other types of compensation. 

Lawyers like me attach all sorts of policies and restrictions on these benefits as a way to influence worker behaviour. The aim of such policies generally ranged from a modest goal like getting you to work harder to making it painful to leave for a competitor.

For example, companies such as Facebook, Dropbox and LinkedIn have offered free food, but it’s not necessarily for employee well-being. It’s for the bottom line. And if your employer offers a gym, free dry cleaning or – heaven forbid – a nap pod, don’t assume it’s an act of charity. 

Curious about Google’s fancy nap pods? Virgin Active has got them.

As former Zillow CEO Spencer Rascoff observed, perks of this sort mean “that employees are expected to work very long hours and not leave the office too often".

On the other end of the spectrum, benefits can be laid out in a way to encourage sought-after employees to stay longer. 

Stock options are typically earned slowly over four years, an especially valuable tool in Silicon Valley, where workers are prone to jumping ship. Vacation never seems to accumulate fast enough for new workers to take holidays off.

READ: Why unlimited vacation means more time in the office, a commentary

Even signing bonuses – purportedly a rewarded for starting a job – are sometimes structured where you have to pay it back if you leave in the first year or two.


But as I learned recently while researching a book about how companies – with some help from courts – exert control over workers, it gets a lot worse. It turns out there is a rich history of employer experimentation with benefits as a behaviour-modification device.

Benefits, particularly those that employees deem necessary or exceptionally valuable, enable employers to exercise surveillance over workers and demand behavioural change in ways they could never do through threats alone.

Historically, company housing sat at the sweet spot of valuable and necessary.

If you were operating a new mine in the early 20th century and there was no housing or transportation nearby, you likely had to provide housing. But like stock options or paid vacation today, once companies started offering it, they couldn’t resist the urge to meddle.

For example, company towns commonly restricted the consumption of alcohol, according to historian Angela Vergara. Pennsylvania coal companies even included a provision in their leases requiring workers to move out within 10 days if they went on strike. 

Not only would the prospect of eviction weigh heavily on workers’ decision to unionise, companies could use the vacated housing for strikebreakers.

FILE PHOTO: The Facebook campus is shown in this aerial photo in Menlo Park, California April 6, 2016. (Photo: REUTERS/Noah Berger/File Photo)

READ: A modern utopian community emerges, as Facebook builds a town in California, a commentary

And although Henry Ford is famous for paying his workers US$5 a day – an extravagant wage at the time – that’s only half the story. Ford actually paid his workers a wage of just US$2.50 day.

The other US$2.50 was a profit-sharing dividend. To qualify, a worker had to submit to a home inspection by Ford’s sociological department and allow inspectors to interview his family and friends. Reasons a man might fail such an inspection included debt, having a wife that worked outside the home or being an immigrant who did not speak enough English.

Ford also had an honour roll for employees with the best inspection scores, but even that status was precarious. According to company notations, one worker was booted off the roll for “selling real estate”. Another was dropped for being “drunk” and having a “Polish wedding”.


Although few employers provide housing nowadays, workers still rely heavily on employers to provide another basic necessity: Health insurance.

While the US Health Insurance Portability and Accountability Act places some informational barriers between employers and employees' healthcare provider, employers still choose which insurers and wellness programmes to offer workers. And they send a pretty clear message about how they want employees to behave outside of work.

My employer-provided health insurance, for example, uses a “health engagement model”, which charges higher premiums and deductibles unless you agree to fill out a lengthy questionnaire and commit to change two things about your identified lifestyle failings.

(Photo: Unsplash/rawpixel) ​​​​​​​

Admittedly, no one interrogated my friends on whether my wedding was excessively “Polish”. But the questionnaire did ask, “How many servings of cookies, cakes, donuts, candy, soda or packets of sugar do you eat daily?” 

I mean, come on. My cake intake is a private matter between me and my supermarket cashier.

Another necessity of modern life is a cellphone – which college students apparently preferred to food in an experimental study involving “modest food deprivation”.

But beware the company-issued cellphone or laptop. Not only does it set up the expectation that you are always on call, all of the information on those devices technically belongs to the company. Even apps you might download on your personal phone to punch in to work can track your location.


Historian Christopher Post observed that company towns all had one thing in common: None of them had a town council. The company was the government.

And in that sense, all of us live in the company town when we go to work each day.

READ: Open-plan offices don’t work – it's distracting and lacks privacy, a commentary

Unless you happen to work in a unionised setting – and most of us don’t – the workplace is the most command and control environment in our lives. The company gets to decide who is worthy of the most coveted perks, and how best to dangle them.

Which is why I find employer efforts to use workplace benefits to control our personal decisions so grating. Some days, you just want to go home, crack open a beer, and eat cake in front of the television – without worrying whether your boss will approve.

Elizabeth C Tippett is the Faculty Co-Director for the Master’s Programme in Conflict and Dispute Resolution, and associate professor, in the School of Law at the University of Oregon. This commentary first appeared on The Conversation. Read it here.

Source: CNA/nr(sl)


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