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Motivating on the cheap: Rewards don’t have to bust the budget

Dedicated, hardworking—and maybe even long-suffering—employees deserve rewards. Sometimes the appropriate reward is a well-deserved raise, but money isn’t always the best solution. And in today’s world of tight budgets, it’s often not even a possibility.

But employers wanting to show appreciation have other options. In the Business & Legal Resources webinar “Small Budget, Big Employee Rewards: How to Successfully Reward the Workforce When You Can’t Stretch that Shoestring Any Further!” Barry L. Brown, a principal at Effective Resources, Inc., offered ideas for inexpensive rewards as well as tips on how to make a nonmonetary program effective.

Satisfier vs. motivator
Brown says money is more of a satisfier than a motivator. It becomes a motivator only when employees become dissatisfied with their pay. For example, an employee faced with unexpected expenses may ask for and receive a raise, but the extra money won’t motivate the employee for long.

Brown says a raise is good for about two pay periods. After that, it gets built into an employee’s budget and he or she forgets about it. Then the employee gets more concerned about the things that are really important, such as having a good place to work, a good boss, opportunity for advancement, etc.

Another reason employers shouldn’t rely on money to motivate is that it’s too easy to match, Brown says. If a competing employer makes someone an offer, the original employer may make a counteroffer that the employee decides to take. But then that employee is likely to leave sometime later anyway, and the original employer ends up using money to entice a new employee.

“It just goes around and around,” Brown says. “We’re paying more money for the same position.” Changes in base pay can affect an employer’s bottom line for years to come because counteroffers become the new base pay.

Ideas for low-cost rewards
Employers have options that cost little or nothing. For example, a personal letter from senior management is something an employee is likely to treasure for years. Other rewards may carry a price tag, but a little creativity can hold the price down.

Brown suggests going to companies the employer frequently does business with for donations. Maybe a company’s travel agency can donate or discount a trip that can be used as a reward.

A few other ideas Brown offers include:

  • A free oil change or car wash, possibly donated by a local business.
  • Movie or concert tickets.
  • Gift cards.
  • A preferred parking place.
  • New office furniture.
  • Special pins, caps, certificates, etc.
  • Club memberships.
  • Membership in a professional organization.
  • Pickup and delivery of dry cleaning.
  • Monogrammed luggage for employees who frequently travel for work.
  • Relief from personal chores at home such as a lawn service or window washing.

Customization crucial
To make a nonmonetary rewards program as effective as possible, Brown emphasizes the importance of customizing the reward for the recipient. Showing that real thought went into the reward makes it more meaningful to the employee.

Brown says he knows of a case where a manager was doing a great job and deserved a reward. The one in charge of coming up with the reward found out she was looking for a new home computer. The company arranged with a computer store to call her and tell her that she could come in and pick out what she wanted and her employer would cover the cost.

Brown gives another example of a longtime employee especially fond of her dogs. She was paid well and happy but deserving of special recognition. The company found out where she took her dogs for grooming and arranged with the groomer for her to present a thank-you note from the boss for free pet grooming. Making the reward personal makes a difference.

Self-sustaining program
To keep a program effective, Brown says, it needs to come from top management. It shouldn’t be seen as an HR initiative that doesn’t have buy-in from managers at all levels. “Otherwise, it’ll die a painful death,” he says.

Once managers see the power of nonmonetary rewards, they’ll embrace the program, so Brown suggests identifying ways to measure the program’s success even if the boss doesn’t require such a report. Employee opinion surveys and customer satisfaction surveys can be helpful. It’s also educational to document changes in the number of voluntary quits and new employee referrals several months after launching the program.

A nonmonetary program should become the new way of thanking employees, Brown says, not just an option left up to managers and supervisors. Employers considered the best companies to work for all focus on thanking employees, he says.