7 Ways to Reward Employees Without Stretching Your Budget

In this economy, budgets everywhere are tight. But within this fiscal reality, businesses still need to ensure their employees happy, motivated, and engaged. 

While keeping top workers on board has always been essential for businesses of all sizes, the task is growing in importance as the job market starts to rebound from the historically low voluntary turnover rates caused by the recession. That’s right: After years of anxiousness and uncertainty, American workers are feeling a little more willing to jump ship and find a new gig. 

Any increase in turnover can be costly for companies. Experts say that recruiting typically costs a company about half the position’s annual salary (it can cost several times more if the position requires hard-to-find skills). Beyond the hard costs of recruiting, there’s a talent and knowledge vacuum created when high performers or long-time employees leave.

And on top of this, discouraged workers that stay are far from the most productive or effective employees. 

Given this reality, here are a few creatively effective ways to reward and incent employees when your budget can’t afford large bonuses or corporate retreats in Hawaii: 

Personally thank employees for a job well done. Two simple words can make all the difference when it comes to employee satisfaction: "thank you." Write a handwritten note or take the time to stop by an employee’s desk to thank them for an activity or effort: “Thanks for your hard work last Friday; it really paid off” or “Thanks for your help pulling together the client presentation. Your contribution really made a big difference.” Be as specific as possible to let employees know that their hard work is both noticed and appreciated. 

Publicly acknowledge success. Any kind of praise goes a long way to making employees feel noticed and valued. The impact of that recognition is multiplied when it’s done publicly. With public recognition, employees don’t just feel support from their immediate supervisor, but they feel respect and appreciation from the entire organization, including top-level executives.  

In a survey of more than 1,000 executives, managers and employees, McKinsey Quarterly found that “praise and commendation from immediate managers” and “attention from leaders” were the top two incentives for motivating employees.

This emphasis on recognition will only get stronger as more Generation Y employees enter the workforce. Dubbed the “Trophy Kids,” Gen Y was raised in an environment where everyone got a trophy just for showing up. In other words, this generation craves feedback and recognition. 

Use social media to publicly thank and commend good work you can highlight employee achievement in a blog post, tweet your kudos, or post a thank you on Facebook. 

Offer more opportunities. Most of us like the opportunity to learn, grow, and take on new challenges. A great way to recognize an employee is to give them an opportunity that shows just how valued and respected they are. For example, send someone to an industry conference or ask him or her to sit on a panel discussion or take a more visible role in a customer presentation.

Provide more freedom and flex time. If employees put in extra time to deliver on a tight deadline, reward them for their hard work with a day off, a chance to telecommute for the day, or a half-day on the next Friday. You could also consider extending "lunch hour" for a week. Whatever type of reward makes sense for your employees or business, make sure to specify that it’s a result of a specific effort or accomplishment to encourage more hard work in the future.  

Include spouses, partners, and family in the recognition. Offering a family-friendly reward can be extremely effective. For example, send thank you flowers to an employee’s home. Give a gift certificate for dinner, a trip to the spa, or tickets to the aquarium or children’s museum. 

Reward effort (and not just success). Success and wins are easy to acknowledge and reward. But sometimes the most meaningful recognition can be for hard work or ideas that didn’t quite pan out. After all, you want to encourage employees to keep producing ideas; you don’t want the bad taste of a failed attempt to dampen future initiatives. 

Celebrate all employees. Along with performance-based rewards, you should take steps to make all employees feel valued and respected. Any manager or small business owner knows that employee birthday and holiday celebrations can really add up. At my company, we’ve instituted an annual employee celebration day where we honor all employees with a dinner, gift card, and contest. Again, your budget will dictate just what you can do but even the smallest gesture can help each employee feel special. 

Your company has worked hard to recruit some bright people and great talent. Just because your budget can’t afford a big raise or bonus doesn’t mean you can’t create ways to recognize and reward your employees. 

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Nellie Akalp is the CEO of CorpNet.com, an online legal document filing service. To find out more about her, get exclusive discounts, and great giveaways ‘LIKE’ the CorpNet.com Facebook page or Follow her on Twitter @CorpNetNellie.