Even in tough times, bosses can still say ‘yes’

By Klaus Kneale

updated 7:48 p.m. ET June 15, 2009

Cash isn't always the best way to reward workers — especially these days, when it isn't available anyway.

The Kaplan Thaler Group rented an ice cream truck and parked it behind its offices for a day. Employees got any treat they wanted that day. "Nothing brings a company together like free food," says Linda Kaplan Thaler, the company's chief executive officer. She's one of many CEOs who have been finding creative ways to reward staffs that have been working harder in more trying times than ever before.

When Syniverse Technologies had to institute a stricter paid time-off policy, it compensated by planning to build an on-site medical clinic for its employees. "The cost is a wash," says Tony Holcombe, Syniverse's CEO. He explains that the price is small considering the increased productivity of healthier workers who will be less likely to put off regular checkups. The clinic will cut medical costs for both the company and its employees.

Holcombe got the idea from another CEO, but it was an internal company survey that told him his staff was concerned about work-life balance because of the tough new rules.

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Chester Elton is impressed. He is co-author, with Adrian Gostick, of "The Carrot Principle: How the Best Managers Use Recognition to Engage Their People, Retain Talent, and Accelerate Performance," which comes out in a new edition this month. Gostick and Elton took the belief that treating employees well helps your bottom line, and they put it to the test. They found that it does. The new edition includes international studies that support the conclusion.

Elton says Holcombe's clinic idea was a great one for keeping employee morale up when you can't do it with money. "It's all about communication," he says. Holcombe found out what concerned his employees, and he addressed it directly. In so doing, he touched, what Elton calls, those employees' "well-being button," sending a strong message that the company cared about their health.

Elton stresses individual shows of appreciation as well. Rewards should be frequent, specific and timely. If a reward can be enjoyed not just by the employee but by his or her family as well (for instance, water park tickets or a free dinner), all the better. Elton's own boss, the CEO of the consulting firm where he works, thanked him for the success of "The Carrot Principle" with a bundle of orange (carrot-colored) roses and a thank-you note — directed to Elton's wife.

Elton says a handwritten thank-you note from a boss is especially effective, and he suggests mailing it to the employee's home to show extra care. The small cost and effort is more than worth it. Again, mentioning a specific success or over-achievement does a lot. Don't let an employee think you didn't notice the 18-hour shift she pulled last week.

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Martha Terry, practice leader for communications at the human-resources consulting outfit Towers Perrin, says good communication with employees is one of the cheapest ways to keep morale up. Many companies are altering their pay plans with freezes, deductions, an end to 401(k) matches and so on. They have to work hard to keep employees informed.

Terry says the announcement of such cutbacks should always be made by the highest authority within a company — in other words, the CEO. A company that conveys a sense of businesslike purpose and understanding with its announcement can gain a lot of stock with its workforce.

Terry also mentions that employees greatly appreciate flexibility regarding the workplace and hours. Letting them telecommute or change their schedule can give them great value at minimal cost.

Quality communication with managers is very important too. They ultimately field concerns and convey goals to those in the company's trenches. If they have issues of their own, they'll have a hard time helping their staffs.

Companies that handle their employees with the right care can come out of tough times with more loyal and appreciative workers than they started with. No one else will.

Never waste a good recession!

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