Reward Employees Without Raising Pay

Key Points

• Retaining valued employees promotes business goals and reduces recruitment and training costs. Implementing a generous compensation plan, with regular pay raises and discretionary bonuses, is commonly used to meet employee retention goals. However, during business downturns, a generous compensation plan does not always make good business sense.
• Employers may choose to reward employees without raising pay. Improve employee morale by implementing casual dress days, scheduling team-building activities and enhancing workplace flexibility offerings. Training and career development opportunities should be made widely available.
• Employers should reward hardworking and loyal employees by assigning them to their ideal shifts, work assignments or projects. In addition, incentive payments or spot awards (such as gift certificates or cash awards) for discrete professional accomplishments will ensure employees are recognized for a job well done without raising base compensation.
• Employers should beware of "title-only" or "in-name-only" promotions, because these types of employment actions may pose a greater liability risk. In addition, employers should be cognizant of job descriptions, and should avoid promoting an employee without an accompanying increase in pay when the job title does not accurately reflect the duties or responsibilities of the position.

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