Everyone loves to be recognized for a job well done. But with money being tight, companies are cutting back anywhere they can. If you’re lucky enough to be running a business where you were able to keep your employees, good for you. However, the people who work for you still need to be acknowledged in some way for hanging in there, even though your annual report has seen better days. Typically a raise or bonus shows an employee how well they’re doing, but as we all know raises are one of those things that go by the wayside first.

So what’s a smart employer to do at raise time? The worst thing you can do is nothing. Ignoring raises only makes employees feel used, unappreciated, and unmotivated. According to Larina Kase, Ph.D., author of The Confident Leader, “Study after study has shown that what motivates employees is not money. Money can make employees unhappy if they’re not sufficiently compensated, but it has not been shown to lead to motivation, satisfaction or performance.”

So instead of ignoring the elephant in the room, be upfront. Sit down with each of your employees as their reviews come due and explain that even though you’d like to hand out raises, this year it’s just not in the cards. Then take your compassion one step further and offer perks instead. Perks are a great way to show your staff that you really are grateful for their support. Even little things mean a lot, such as:

1) Premium Parking

If your employee commutes, a great perk is to offer a premium parking spot right near the entrance of your building. Such spots are usually saved for executives or employees of the month. However, in lieu of a raise you might want to use these spots as a substitute perk. And if there are fees for parking, be a hero and pick up the tab for that as well. Or if your employee takes the bus or train, offer to buy him an annual bus or train pass. It’s still cheaper than increasing an employee’s salary, plus the expense is tax deductible.

2) Late Start/Early Release Days

Let your employee pick a day of the week that he can come in an hour late or leave an hour early over an extended period of time. The most obvious day would be every Friday, however, maybe a different day would be more accommodating due to childcare responsibilities. Or you can offer a few extra paid personal days; for example, the employee’s birthday, anniversary, or their kids’ birthdays. If they want to use these days to bank extra paid sick leave that’s fine, too. They’ll thank you the next time junior gets a cold and can’t go to school.

3) Gym Memberships

Purchase an annual gym membership for those employees who want one. This option doubly works in your favor in that if your staff gets in shape they’re apt to have less sick days. Many big companies already have in-house gyms for their executives. Maybe it’s time the bigwigs gave up their gym memberships in favor of handing them over to their employees as perks.

4) Provide Electronics

If you don’t already provide cells phones or laptops for your staff, doing so can ease the blow of not getting a raise. Purchasing a cell phone and paying the monthly fee is still cheaper than raising an employee’s salary. Ditto on buying him a $500 PC laptop. Again, the added benefit for you is that your employee may even use those items at home to get some extra work done.

5) Gift Certificates

If you’re really strapped for cash gift certificates for massages, dinners, theatre tickets, even the movies show that you’re making an effort to show gratitude. This is definitely your most economical option, but regardless your thoughtfulness will not be lost on your employees. They will appreciate that you at least did something.

Yes, your staff will be disenchanted if you can’t afford to give raises or bonuses this year, but it’s not like they don’t know what’s going on in the world. If, however, you acknowledge your employees with a small reward (to show your appreciation) your efforts will be repaid tenfold with a motivated staff that’s ready to stick with you through thick and thin.

Do you have a good idea for an employee incentive? Share it with us. We’re always looking for alternative ways to make the great American business perk more rewarding and meaningful.

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