A pat on the back vs. more in the paycheck

September 27, 2010
| By Pete Daly |
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Stratford University, a small college in Virginia, recently told the world its business school dean, K. Habib Khan, has come up with “10 Ways to Show Your Employees You Care Without Giving a Raise.”

In these hard economic times, when many businesses owners/managers feel they cannot afford raises or bonuses, these tips for showing appreciation will make employees “more likely to hang in there and remain dedicated,” he said.

The 10 tips are:

1. Provide additional paid time off. Even if it is just one or two days out of the year, it will be appreciated.

2. Give employees the ability to have a flexible schedule. Many people would appreciate being able to work four 10-hour days per week, or working one day per week at home.

3. Allow a casual dress code, even if it is just one day per week (like casual Friday).

4. Provide a catered lunch or pizza party once a month.

5. Celebrate each employee’s birthday with a cake and gift card.

6. Once a month have everyone’s car washed on-site by a mobile wash company.

7. Periodically, bring in a massage therapist to provide everyone with a complimentary chair massage.

8. Keep stashes of things to occasionally give away to those going above and beyond the call of duty. This could be gift cards, concert or event tickets, or health club memberships.

9. Set up a relaxation or recreation room where employees can de-stress and/or have some fun, perhaps including a TV, pool table, or an air hockey game.

10. Offer employees a title change, even if they won’t be paid more. Employees appreciate being able to have a new title, which will provide them additional benefits for years to come.

Are these good ideas, or are they a little silly and even unfeasible, in some cases?

“They’re not silly or unfeasible, and in fact, we do many of those things at the Chamber,” said Andy Johnston, director of legislative affairs at the Grand Rapids Area Chamber of Commerce.

For instance, he said, during the summer, “we have something called bonus time off, which is another way that shows that employees are appreciated here.”

The GRACC provides employees the ability to work a flexible schedule, if that’s what it takes to complete a project.

“We definitely allow a casual dress code,” he said, and the Chamber has a party or get-together of some type every month or so, celebrating employees’ birthdays.

“We don’t have everybody’s car washed on site. I don’t know if Ellis Parking would appreciate it if we did that in the ramp,” said Johnston.

The Chamber does occasionally give things to employees who “go above and beyond” in certain capacities, such as new member recruitment. Those rewards are typically gift cards or tickets to events.

Johnston said the online TED Conferences (TED.com) shed some light on this subject. TED is a small nonprofit organization that promotes “Ideas Worth Spreading” for free. When organized in 1984, it was first aimed at management in technology, entertainment and design (TED).

TED features a video of Daniel H. Pink, an author who writes about the changing world of work and has had two books on The New York Times bestsellers’ list.

According to Johnston, Pink believes that “more money” can end in a worse performance from an employee; what employees respond best to is “intrinsic motivation” — a demonstration of appreciation, or more autonomy to master their work better.

Pink cites MIT research in which people played three games, offering high, medium and low cash rewards. Johnson said people playing the moderate and low games did pretty well, but the people playing the highest financial reward game “did the most poorly.”

Johnson said the current economy is the time for many small businesses to tap into a different mindset, consider new and creative ways to motivate employees and attract/retain talent.

The Business Journal also asked George Erickcek, senior regional analyst at the W.E. Upjohn Institute for Employment Research in Kalamazoo, for his take on Khan’s cash-free ideas for rewarding and motivating employees.

“Regarding points 1 and 2: One of the major differences in U.S. employment practices from Europe countries is that during slow time, U.S. employers tend to lay off workers, while in Europe they reduce hours. This is partially because the employers' cost structure is different — national health care, for example. Still, I believe most workers would accept shorter hours than face the possibility of being laid off,” said Erickcek.

As for No. 3: “Aren't things pretty casual already? You don't see too many ties these days,” said Erickcek. His other comments on the list:

4. “Fine but then you have to worry about what people are willing to eat.”

5. “Some people, like me, don't like birthdays. They are nothing but mile markers on a road you don't want to end.

6. “If the company can afford this, why can't they afford to hire Joe back, or give us a raise?”

7. “Too personal.”

8. “Remember how you hated the teacher’s pet?”

9. “Bad idea. If you use it, your co-workers and supervisor will think that you have nothing to do. Plus, during the noon hour, there will be a fight over the TV control.”

10. “Isn't this what the banks have done? It seems like almost everyone is a vice president at a bank. Of course, there are senior vice presidents.”

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