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He notes two caveats to Twenge's findings. First, "we know that many members of Gen Y are less willing to delay gratification and like more immediate rewards than their predecessors." Second, Gen Y scores slightly higher in terms of how important leisure time is to them, "which means that if I were interested in attracting Gen Y to my company, I would increase perks that help them carve out more time for their outside interests, such as flextime, or incorporate these interests into the work time, such as employer-sponsored volunteering."

Twenge's study offers a number of additional insights. For example, "contrary to popular press reports, Gen Y does not favor altruistic work values more than previous generations. And social values (e.g., making friends) and intrinsic values (e.g., an interesting, results--oriented job), were rated lower by Gen Y than by boomers," the study says. Twenge at one point also notes that "despite the emergence of a mini-industry built on the assumption of a changing workforce, empirical evidence for generational differences in work values is scant."

Low-cost, No-cost Perks

Given the recent recession and its sluggish recovery, companies are scrutinizing perks more closely than ever, reviewing every expense item and whittling down the perks that are especially costly. "Organizations are increasingly sensitive to a performance-based culture," says Fran Luisi, a principal of Charleston Partners, a Rumson, N.J., a firm that focuses on executive recruitment. "They structure compensation to be very incentive-driven. The days of additional perks for perks' sake are disappearing." Gross agrees that employers today need to be as efficient and lean as possible, adding that perks like telecommuting and flexible hours "don't need to be seen as costs, but as different ways of looking at the workforce.... [In that sense], flexibility is not a perk; it's a quid pro quo."

Most experts agree that perks overall play an important role in the relationship between employee and company, especially in recessionary times. "Perks hold people to an organization," says John Challenger, CEO of Challenger, Gray & Christmas, a Chicago-based global outplacement firm. "If an employee likes his or her boss and the work is challenging, and if the company has a set of perks that are adapted to what that person needs, then it's hard for the employee to leave. He or she may not" be able to replicate that situation in another organization.

Bill Morin, founder of New York-based leadership consulting firm WJM Associates, suggests that perks can actually offer signposts to new employees, "because wherever the perk is placed -- whether on sales or profitability or new products -- that is where the company wants the employee to concentrate [his or her efforts]. Sometimes when individuals come on board, they don't know what the company is looking for. Perks help these individuals focus."

Companies these days are especially interested in offering low-cost or no-cost perks that increase employee engagement, adds Challenger. One way to do that is to survey employees to find out what they want, and then prioritize those needs. Scaling back perks without eliminating them is one approach. An example, Challenger says, is tuition reimbursement. "In good times, a company might not put restrictions on that perk, but in tough times, the company might say that the training has to be in line with the work an employee does, and [is covered] only if the employee earns a certain grade in the course. Or the company could scale back a rewards program; instead of sending top salespeople to Hawaii, perhaps send them to a place that is not so extravagant."

Driscoll cites working at home -- provided companies set productivity standards -- and mentoring as two cost-free perks that can be offered to employees who "share the company's values and strategy." He advises companies to avoid cutting perks in a recession "because perks are a way to retain their existing talent. Companies can offer subsidized training and education, mentoring or a flexible schedule, and can do that without having to offer more financial compensation, and in some cases, can offer less."

One of Gross's clients is an accounting firm whose young employees often choose to leave and go work for industry. "Why? Because there is more flexibility and the hours are more predictable," says Gross. It can also mean less compensation -- accounting and law firms, among others, have lucrative partner tracks for their top-performing employees -- but that is a tradeoff young people these days seem willing to make.

Firms should also be aware that perks can sometimes backfire. Companies which have used very elaborate perks as a recruiting device to attract talent away from competitors are finding that this approach "works too well," says Grant. "Employees come to the company and take the perks for granted, which results in feelings of entitlement and reduced gratitude, and can contribute to dissatisfaction and turnover." Companies face a similar dilemma trying to figure out "which perks should be offered up front to bring people in the door to provide a cohesive, supportive environment, versus which perks should be offered as rewards for good performance or for seniority down the road," says Grant. He advises increasing perks up front for firms that "are struggling with recruiting, whereas firms that recruit effectively, but face performance challenges, may want to increase performance-based goals."

He also suggests that companies focus on creating at least one perk that connects to core values but differentiates them from competitors. One example he cites is The Virgin Group, "which is offering employees the chance to engage in skills-based volunteering to help people in underprivileged communities and developing countries become successful entrepreneurs. Few other travel and media companies provide such meaningful opportunities for employees to share and hone their own entrepreneurial skills."

Given a seemingly endless array of perks to consider, choosing the most effective ones is related to how well a company understands its workforce, and how well employees "get" what the company is all about. Examples of effective perks, in light of the discussion above, are those offered by online shoe retailer Zappos, suggests Wharton management professor Nancy Rothbard. "One way to think about making perks worthwhile is to look at the culture of your company: What are the values, norms and behaviors that reflect its core identity? Then choose perks strategically around that."

In the case of Zappos, headquartered in Henderson, Nev., its approximately 1,500 employees tend to be young and "driven by a culture of fun," as suggested by the presence of "beach balls in the office, very casual dress and frequent parties," says Rothbard, adding that these perks are "designed to keep employees engaged and passionate" about their work. In addition, Zappos -- despite its occasionally goofy videos-- is serious about training its employees, going so far as to offer people $2,000 in cash to leave the company if they feel it won't be a good fit for them. One of their other perks is a full-time life coach. Companies obviously view such perks as a competitive advantage, attracting talent that wants to be associated with an exciting company, Rothbard notes.

Corporate Jets, Country Clubs

Up until the time of the accounting scandals and the Sarbanes-Oxley Act in 2002, perks for executives existed in rarified -- and non-turbulent -- air. They were status symbols that CEOs came to expect once they had reached the top, says Wharton accounting professor Wayne Guay, and they ranged from corporate jets to country club memberships to $500,000 office renovations.

Several years ago, corporate governance watchdogs and the media started paying attention to these perks, which then came to be seen as "very conspicuous consumption and not very good investor relations," says Guay, adding that one of the main arguments for them was their tax treatment. If a company could argue that a country club membership was an important business expense because the CEO did deals while playing golf, then the company could write off that amount on its taxes.

If you move away from the tax issues, "then it's hard to come up with another good reason for offering these perks to senior executives," says Guay. "Why not just give an executive a certain amount of money and let him or her use it how he wants? Many firms are doing that now. The conspicuous perks that were big 15 years ago are gone. And these days, everything needs to be disclosed, including in the proxy statement, where corporate governance groups can see it."

Guay agrees with that approach. "You pay the executive a going rate depending on the company and the position, and if the executive likes to spend lavishly, he can do that on his own time.... If a CEO did not get perks, he would, other things being equal, get paid more. The two are negotiated simultaneously."

As for examples of perks for mid-level or lower-level employees, Guay suggests a positive and a negative one. On the positive side, if a company can negotiate lower health club membership fees for a group of employees, then everybody wins: The employees get a cost break, and the company gets healthier employees. The example of a negative perk, he says, goes back a few years to when companies were offering retirement benefit plans to employees that gave them a choice between buying into a mutual fund or buying company stock at a small discount. Because many of the lower level employees were not financially sophisticated, they typically bought the company stock because it was more familiar to them. The employees' decision was, of course, a boon for the company, which used this employee "perk" to raise more capital.

Yet "any investment professional would tell you that if all your capital is tied up in company stock, the last thing you need is more of it," says Guay. After the dot-com blowup, employees at a number of companies that went bankrupt ended up losing not only their jobs, but all their retirement money.

Regardless of how perks are perceived by either the employer or the employee, if a company decides it has no choice but to cut back on perks, the best strategy is to bring employees in on the process. Employees then feel like they have helped shape the decision. "We know from 30 years of research that when you have to deliver bad news to employees, they are more comfortable accepting a negative outcome if they felt it was determined by a fair process," says Grant. One of the most creative approaches he has seen in these cases is the use of innovation tournaments. Employees compete to come up with suggestions on how to reduce perks in ways that meet the company's objective but leave in place those perks that they consider especially meaningful. The tournaments, Grant says, "are a way to foster transparency and democracy."