Boon or bust | Ethics aside, what effect do cost-of-living payments have on morale?

Ethics aside, what effect do cost-of-living payments have on morale?

Earlier this week, HR Grapevine reported on the news that our reigning monarch, King Charles III, will give his staff a cost-of-living bonus totalling as much as £600. In the piece, we scrutinised the decision.

This was not because giving staff some extra cash to get through one of the toughest financial periods in recent history is a bad move by any account, but some experts believe that one off payments are simply not as effective at staving off monetary hardships as some of the other things that businesses could be doing.

Payments ‘don’t go far enough’

Kate Bell, the Head of Economics at the Trade Union Congress (TUC), is one such expert. She recently noted that one-off or temporary gestures, in her view, don’t go far enough to truly help workers survive economic turmoil.



“Of course workers will take any form of help they can get this winter,” Bell said. “But the only real way to give working families security is a decent pay rise. One-off support is not enough. We need to get wages rising across the economy to end this living standards crisis.”

Yet the King is far from alone in offering staff one-off cost-of-living bonuses. Many other employers, such as Amazon, Aviva, John Lewis and Lloyds bank have championed the initiative, offering their staff varying amounts from £500 to £1,200.

A boon to morale?

It’s clear that offering staff this one-off bonus is a popular move among employers; yet if Bell is correct, it’s hard to see the rationale if staff still find themselves struggling financially. One explanation, offered by holiday company Jet2’s HR Director Miriam D’souli, is that whilst long-term financial wellbeing may not be impacted, offering such payments triggers what she calls a ‘whoosh’ in staff morale.

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