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Some time ago, one of my clients handed me a book. The book is entitled, 1001 Ways to Reward Employees, by Bob Nelson. I thanked him for the gift, but I mentioned that I already had a copy. I promised him I would pass along the one he gave me.

What I didn’t mention is that I bought my copy several years before. Shortly after purchasing it, I used it as material for a speech on motivation. I also utilized a number of the ideas in the book to reward my staff at the time.

The point of the book – and, by the way, if you don’t own a copy, you should check out the updated version, 1501 Ways to Reward Employees – is that money isn’t everything. There are a variety of low cost ways to reward employees. This book lists proven low cost strategies on how to reward employees via contests, achievement rewards, time off, and even praise.

Praise is one the most effective and least costly ways to reward your employees. It is the simple act of catching someone in the act of doing something good, and telling them that you appreciate what they do. Making an effort to thank people for going out of their way to serve your customers. Or thanking them for simply doing their job well every day.

I am absolutely amazed at the power of words that encourage and exhort people. The power of the sincere thank you for a good effort is amazing. You can make an astounding impact when you recognize employees who have made a personal sacrifice to make sure that your key customer got his order. The loyalty that can be created by you personally thanking someone for a job well done – by taking them to lunch, for example – can be remarkable.

For more than two decades in my work with business owners, I have often been amazed at how many business owners do not practice any form of non-financial compensation. They have reduced all rewards within the business to the annual ritual of merit raises and year-end bonuses.

In reality, the economic return on the traditional merit raise and bonus is significantly less than the informal ongoing rewards that a wise business owner initiates.

A Gallup study that has been updated annually for many years indicates that “people quit managers, not jobs.” Their data shows that people make the decision to stay or leave jobs based on the informal elements of the position – not the financial considerations such as pay, bonus, and 401k.

If you demonstrate to your employees that you value them in the little things, you will gain their loyalty and appreciation. (By the way, I am not suggesting that you do these things with that end in mind, but rather that when you do these things sincerely, you will reap the benefits.)

Here are several great ideas from the book. (Buy the book. It’s less than ten bucks on Amazon!)

  1. Compliment someone. Not in a big meeting. Simply walk up to them and say, “Thank you for doing…”
  2. Paid time off is one of the greatest rewards. Set a goal, and if it is achieved, give everyone an additional PAID day off. Next time you ask them to do something extra, they will really go for it!
  3. Run a simple contest tied to some important objective. Perhaps it is the number of new customers for the month or unit sales for a new product. If the goal is hit, the whole department gets free pizza for lunch.
  4. Take one member of your staff to lunch each week. Ask them their opinion and listen to their ideas. Commit to seriously consider one of their ideas.
  5. Reward customer service. Recognize it publicly. Acknowledge it in front of everyone. Give out a gift certificate for a restaurant or tickets to a sporting event.
  6. If you have season tickets in a great section, allocate 20% to reward employees caught in the act of doing something good. Giving these tickets to your employees will get you more business than most of the ones you give to clients.
  7. Same as number one. Learn to say thank you. Most people will almost die to be appreciated and get a compliment.