Best Ways to Reward Employees Without Promotions or Pay Raises

by Kimberly Smithson-Abel

Sometimes it’s not always practical or possible to recognize employees with a cash bonus, pay raise or promotion. Even though extra money is helpful and useful in a tough economy, it doesn't mean employees will be any more motivated or committed. In fact, often cash isn’t even what employees value the most. We know this because employees most frequently say they want a cash reward but, in repeated and controlled experiments, their behavior says something quite different. Most recently, according to the Currency of Reciprocity – Gift-Exchange in the Workplace, August 2011, workers were given an award equivalent 20% of wages or a non-cash semi-equivalent award where they could choose how to redeem. The results were eye-opening. The cash gift had virtually no measurable increase in productivity whereas the less costly non-cash award, resulted on average a 25% higher work performance. Interestingly, the more time and thought the company put into the reward, the higher the performance – giving further credence to the old adage that it is truly "the thought that counts."
With the data confirming that companies will get a bigger bang without the buck...below are some creative ways to recognize and reward high performing employees with no budget or low budget:
1. Thanks from the top. Have the top managers (or CEO when possible), send a handwritten note to the employee. This correspondence should be individual, clearly communicating the appreciation of the specific achievement and why it mattered.
2. Employee-led event. Without adding to the workload of the employee – invite them to present their initiative or lead a workshop or training seminar to others at the company. This is taking recognition to the next level because they are being asked to share their ideas even further.
3. Choose a variety of rewards. Not everyone wants or needs a massaging backrest or gift certificate to the local Thai restaurant. So, when there is budget for an employee reward program (often designed with point accrual over a period of time) – think about your entire workforce demographic and offer a wide variety of rewards for employees to choose. Consider traditional choices such as practical merchandise, media, books, gift cards and travel as well as non-traditional choices such as an additional vacation day, a longer lunch hour for a week, tickets to a sporting event, cooking or pottery classes, or a paid day for the family to visit the nearest amusement park. Know your people enough for the offerings to be genuine rewards and not warehouse remainders!
4. The spoken word. Nothing says value and appreciation better than saying so. Make sure your managers take the time to recognize and acknowledge employee achievements, initiatives, even behaviors by speaking out privately or in a group setting. Day to day words, when said with meaning and purpose, have a residual impact that can last indefinitely.
5. Celebrate and socialize. When a goal is reached, an initiative is implemented or an achievement is met – shout from the rooftops (or the Twitter-tops)! When appropriate, use social media to share the good news and, offline, consider organizing a gathering to "toast" the employees who deserve the recognition as a way to celebrate the accomplishment. This group dynamic will be motivating across the entire workforce because it let's others know their efforts will be recognized if they achieve too!
The ingredients for success in appreciating your employees is most effective when using a combination of no-cost, low-cost (day-to-day recognition), moderate-cost (informal recognition) and high-cost (usually reserved for formal programs) rewards. If you strictly rely on no-cost recognition, while it sets a good foundation, by itself – there is limited ability to distinguish appropriately between good, great and knock-the-ball-out-of-the-park performance. Conversely, solely using high-cost rewards for the top 1% of performers leaves 99% percent of your employee population…unappreciated. The winning formula is a balanced approach of all four, and programs that are focused on providing meaningful rewards that involve choice and symbolism, have personal involvement from managers and leaders, and are celebrated with fanfare.

About the Author
Kimberly Smithson-Abel is Vice President of Strategy & Business Development for Inspirus , the award-winning employee recognition and reward provider based in Dallas-Ft. Worth, Texas. She can be reached at