Regulation and Models of Employment

How do the rewards and benefits of gig work compare to employee rewards and benefits?

The gig economy, or gig work, refers to the trend of short-term, insecure, flexible labour individuals engage in. Perhaps the primary accelerant of gig work is the proliferation of digital platforms such as Fiverr, Etsy, Uber, Airbnb, and Deliveroo (Carbery et al., 2020). Digital platforms serve as the on-demand bridge between gig workers and their clients or customers (Graham et al., 2019). Some examples of gig work include web development, graphic design, food delivery, ride-hailing, and home cleaning.

In the UK, gig work is subject to legal categorisation known as employment status. Usually categorised as ‘self-employed’, gig workers receive fewer rewards and benefits than those of ‘employee’ status. Those absent include paid holiday, maternity/paternity leave, protection against unfair dismissal, pension contributions, redundancy pay, or sick pay. However, by extension of ‘self-employed’ status, gig work qualifies for the national minimum wage, protection against discrimination, and a safe working environment (Graham et al., 2019). As the minimum rights and benefits compelled by law for ‘self-employed’ status, employers can grant additional benefits to gig workers but risk altering their employment status.

The reasons why individuals undertake gig work may include perceived benefits such as flexibility when or where they work and the choice of enterprise to engage in. Some gig workers, particularly those in creative industries, may receive higher pay than their ‘employee’ status counterparts (Carbery et al., 2020).

What role does reward management play in different models of employment? Competitive advantage? Performance and productivity? Burnout and staff attrition?

Reward management is an HRM function whereby a firm’s compensation/benefits package is designed and implemented (Cotton, 2022). Typical aspects of reward management may include competitive salaries, paid time off, or development opportunities. The intended purpose is to attract new employees and incentivise the motivation and retention of high-performing talent.

A critical concern is how a firm’s reward offering compares to competitors vying for the same talent. One approach is to amplify the attractiveness of a reward in direct competition with rival firms. Examples could range from higher pay to unique benefits such as private healthcare. By contrast, a firm not offering such rewards may increase the level of interest from potential employees, mitigate the risk of attrition, and maintain productive engagement (Armstrong & Taylor, 2023).

Rewards could also be adapted to different employment models (i.e., permanent, temporary, part-time, etc.) according to a firm’s strategic objectives (Cotton, 2022). Each employment model reflects an individual’s circumstances, preferences, and desired working arrangements. A firm looking for unique skills atypical to the general working population could design an offering attractive to freelance workers with higher earning potential and greater autonomy. Likewise, if an individual were seeking temporary work they might be more likely to select the firm offering potential consideration for a permanence or flexibility. Performance-based bonuses could positively correlate with productivity in highly competitive industries because they incentivise performance.

It should be noted, however, that if a firm’s reward system is poorly designed or poorly implemented, it may result in burnout and attrition (Armstrong & Taylor, 2023). For example, if employees perceive performance-based bonuses as unachievable, it could lead to demotivation and disengagement. Another example would be employees who feel unfairly compensated for the work they do or employees finding it difficult to achieve a balance between life and work commitments.