Low Cost Motivation: Rewards don’t have to bust the budget

September 23rd, 2015

low cost motivation

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 for inexpensive rewards.  Here are a few tips on how to make a nonmonetary program effective.

Satisfier vs. motivator
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.

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.  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.

Changes in base pay can affect an employer’s bottom line for years to come because counteroffers become the new base pay.

Additionally, when you do things such as provide lunch once a week as a thank you, after two weeks it quickly loses the “thank you” it is meant to be and becomes an entitlement.

Ideas for low-cost rewards
Employers have options that cost little or nothing.  For example, a personal letter or handwritten thank you note from the owner 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.

Consider going to companies that the business frequently does business with for donations.

  • 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, the importance of customizing the reward for the recipient is paramount. Showing that real thought went into the reward makes it more meaningful to the employee.

Recently we had a client 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 to play games as Overwatch, to be able to learn how to use the diiferent heroes in OW. 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.

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, it needs to come from top management or the owner.  It shouldn’t be seen as an initiative that doesn’t have buy-in from managers at all levels.  Otherwise, it’ll die a painful death.

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, not just an option left up to managers and supervisors.   Employers considered the best companies to work for all focus on thanking employees.

Author:  Karolyn St. Pierre, Vertical Bridge Advisory Board Member



Karolynn Humberd St-Pierre is the Founder of Symmetry Consulting an HR Management and Consulting firm based in Denver, Colorado. She is a Senior Human Resource Professional, author, and speaker known for her expertise in US human resources and its complexities. Her book, The Small Business Human Resource Bible has become a desktop guide for small business owners across the U.S.

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