How to Reward (and Retain) People When Money Is Tight

Publication: Harvard

Christina Bielaszka-DuVernay

June 3, 2008

Retaining talent is a competitive necessity, for start-ups and multinationals alike. But with global uncertainty making budgets tighter, throwing money at high-performing employees to keep them engaged and onboard is less of an option.
So I put a question out to a network of consultants and authors: What are the best nonmonetary ways to motivate, reward, and retain knowledge workers today? Here are the top answers I received:
Allow personal projects
"You hired your people because they're smart. That means that their minds are working on all kinds of subjects --some directly related to your business, and others only marginally. Don't underestimate the motivational value of permitting your people to work on the marginal projects on company time. Sooner or later, they'll find a way to relate it back to your business, usually with very positive consequences." -- Merge Gupta-Sunderji, a leadership and communications consultant based in Canada
Let them make an impact and develop skills
"The best motivation is when employees feel that they are contributing to something big, and have an impact on the results of the company. I once worked on an international assignment in Dublin, where the job market was very hot. The employees were mostly under 30, and salaries were low. As their leader, I focused on:
Ensuring they had work that was meaningful. Even though they were very young in business, they were given work that had impact and significance to the company. They could connect their results to the bottom line of the company.
Giving them roles that provided developmental experience in transferrable skills. Many they needed experience in presenting to executives, handling negotiations, and other uncomfortable situations.
"The majority of the best performers stayed with the company and continued to progress successfully. Their meaningful work and added developmental opportunities created a commitment to the company that didn't exist when they first joined. " -- Nancy McGuire, McGuire Consulting Group
Help them plan their careers
"Opportunity and recognition predict career satisfaction better than cold cash for most people. Giving an employee a chance to increase their skills and visibility on an interdepartmental task force builds skills and company loyalty. Encouraging employee responsibility for career management can elicit employee ideas for skill- and career-building assignments that help employees advance their careers in the direction they want." -- Rachelle J. Canter, president of RJC Associates and author of Make the Right Career Move (Wiley, 2006)
Show them you respect and trust them
"It really isn't difficult to motivate and recognize without money. A survey I conducted found that some of the most meaningful actions involved showing respect, trust, and confidence. Some examples, in the employees' own words:
Having my boss stop by my cubicle each day, just to say hi. I didn't feel intimidated just visible.
My manager had more confidence in me than I did.
I was given a difficult customer to assist. The message I heard was, I trust you.
My boss asked me to participate in a panel discussion on his behalf.
"Also, be sure to thank them. Yes, it is their job, but they will do it with so much more enthusiasm for a manager who appreciates them." -- Cindy Ventrice, author of Make Their Day! Employee Recognition That Works (Berrett-Koehler, 2003)
Keep them "in the loop"
"It is unfortunate that small or shrinking budgets are required to refocus leaders on one of the fundamental realities of employee motivation and loyalty. Money is far from the best motivator. Most people put a higher value on feeling respected, feeling "in the loop," having the ability to be expressive at work, and having a meaningful voice in decisions that affect them." -- Todd Dewett, author of Leadership Redefined (TVA, 2008) and an associate professor of management at Wright State University
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A final word about effective recognition
"When it comes to motivation, money is the last thing one should be thinking about. I advise my clients to remember three things:
Responsibility along with empowerment is the best motivator
Recognition inspires, not only the recipient but also others
Different people see value in different things, so one should strive to understand what is important to individuals working for you. This is especially critical when working in an unfamiliar cultural environment.
-- Ilya Bogorad, principal of Toronto-based Bizvortex Consulting Group