Staff management

How to Reward Employees Without Giving Them A Pay Rise

Oct 2016 ⋅ 5 min read

You want to recognise an employee's achievements but your cash flow won't let you.

You can't afford to dish out a cash bonus, and there's no money in the budget for an extra pay rise.

You're aware of how important it is to show appreciation to employees when they get results, meet targets, or simply put in a huge effort for the company, but there just isn't a way to give them cash.

Instead, you need to look at alternative ways to reward employees - without spending money.

To do so effectively, you must know what motivates your employees. Generally, these motivations can be split into these four categories:

Progression
Learning and development
Social
Variety and breaks from usual tasks

Read on for ways to reward employees based on their motivations - without giving them a pay rise. We've split the rewards into groups loosely based on these motivation categories to make things a little easier.

Progression

These rewards will motivate ambitious employees who want to quickly climb the career ladder. Of course, their preference might be for a promotion and immediate pay rise, but these bonuses will certainly still be appreciated.

New job title. Job titles can be incredibly important to some employees. By removing the 'junior' prefix from their title, or adding 'senior' to the start, you're giving employees recognition for free. Of course, they might expect a pay rise later...
Additional responsibilities. By making staff managers or simply assigning new responsibilities to them, you show employees that you trust in their abilities.
Larger office. If your office allows it, shuffle things around and assign employees larger offices based on their recent performance. A larger office (or an office away from the open office area) is still a sign of prestige!

Learning and Development Opportunities

If you want to reward an employee who is motivated by learning and developing new skills, these types of bonuses are likely to be most effective.

Exciting conference trips. Offer the employee the chance to attend an industry event abroad, or in a part of the country that they've expressed an interest in visiting. This reward may not be cheap, but you could cut back in other areas of your conference budget to accommodate it.
One-on-one training and development sessions. Have someone sit down with the employee and spend half a day in a specialist high-quality training session. Also take the time to discuss any other skills the individual would like to learn, and how they might be useful to the company in the future.
Courses. If there's a business or adult education course the employee would like to attend, give them the funds. These courses might not benefit your business but the recipient will be delighted with the gift.
Study time at work. Let the employee take half a day a week (or fortnight) to dedicate to learning a new skill. They could use textbooks and resources you keep at the office or work on personal projects.

Team Recognition

If you want to recognise an entire team or hold a team event to celebrate the successes of an individual within it, these rewards are the right choice.

Trips out. A trip to the local pub or a favourite restaurant is a fantastic way to recognise the efforts of a team. It doesn't hurt if the first round of drinks is on the company, either.
Experiences. Go karting, rock climbing, escape rooms, scavenger hunts, bungee jumping, and so on. These memorable experiences bring a team closer together and are also incredibly fun!
Potlucks and bake-offs. Outdo the office canteen by holding an office potluck or baking competition. Set a theme, and tell participants that shop-bought items are OK if they aren't confident in the kitchen! The goal is to foster friendly competition (and fun!), not to take it too seriously.
Al fresco meetings. If the weather's good, propose holding meetings outside. You could even combine the meeting with a picnic! This novel meeting setting will certainly be a breath of fresh air...

Perks and Bonuses

These small bonuses may not be as flashy as some office perks, and some may even be seen as trivial - but these options are perfect if you want to recognise an individual's achievements in a small yet meaningful way.

Extended lunch break. As a one-off show of appreciation, insist on employees taking a longer lunch break.
Flexible working or work where you like. Even if you are unable to offer employees the option to work flexibly every day, reward employees with flexible hours, say, every Friday or a 'work where you want' day every fortnight.
LinkedIn recommendation. This one seems slightly counter-intuitive - are you not helping the candidate switch jobs by providing them with a glowing recommendation? Sure - but in the long-term, not the short-term. The employee will be pleased that you think so highly of them, and that goodwill will stretch far.
Thank you note. When was the last time you received a written thank you note? Employees will certainly appreciate this small but significant gesture.
Verbal recognition (public or private). Alternatively, praising an employee verbally - either in public or privately - is another effective way to boost morale.
Cake. Buy a cake to celebrate an individual or team success - food allergies permitting...
Control over the office playlist. If you work in the type of office where headphones and individual playlists are frowned upon and the office playlist is a source of constant conflict, give the employee you wish to recognise the honour (and responsibility) of putting their favourite music on for the next week!
Feature in company newsletter or other documents. Mention outstanding employees in company newsletters or through other internal comms. This is a zero-cost way to show employees that you recognise their efforts.

Final Thoughts

Almost every reward we've mentioned will cost you less than a tenner.

It's tempting to formulate an employee recognition plan based on these affordable elements, but sadly these aren't a good substitute for a pay rise.

Employees have expectations that they'll receive a pay rise each year. If you offer a number of these rewards instead of that pay rise, they'll understandably feel a little disappointed.

However, by supplementing a modest pay rise with these additional benefits, perks and forms of recognition, your employees may be more forgiving if the pay rise isn't as significant as expected.

Finally, you must understand your employees' motivations when rewarding theme. If you plan on rewarding a workaholic's hard work with an extended lunch break, think again. Conversely, when recognising a team leader who prides themselves on helping their teammates thrive, reward the team as a whole - not just the individual!

Whilst much of this article may appear to be common sense, office life is often too hectic to get around to dishing out these rewards.

By making a concerted effort to supplement pay rises with some of these perks and bonuses, you can start to make this approach a defining element of your company culture, bringing recruitment, engagement and retention benefits.

How do you recognise outstanding employees at work? Share your thoughts in the comments below!