TIP: How to Keep Good Employees

Tip of the Month

May 2007

TIP: How to Keep Good Employees

How do you keep good employees when you can’t match the salary or benefits of the larger corporate competitors down the street? For a start, you can take advantage of the assets that a small business has when it comes to offering employees recognition. Flexibility is key, when it comes to offering great incentives to employees. You are not tied to a compensation structure that limits creative thinking and you have the opportunity to think outside the box. Employees frequently value praise from their bosses or recognition amongst their peers more than hard cash. Perhaps the most important thing is to have the prize fit the accomplishment. If a sales person secures a million dollar deal, his reward should reflect the cash impact of the accomplishment or its importance to the financial health of your firm. Here are some ideas:

Reward your top sales people with more than one-time bonuses. If new business turns into an ongoing client relationship, give the sales person who sealed the original deal an annual percentage of the client’s business.

Make those who make significant contributions to the bottom-line eligible for special fringe benefits—health club memberships, a car or business wardrobe allowance, etc.

An extra week’s vacation (with airfare, hotel and major expenses paid too, if the effort warrants it) is a great way to reward someone who has worked long hours to generate profits for your firm.

If cash is tight, give employees extra vacation days or an unexpected treat (a round of golf, or a gift certificate for dinner at a local restaurant).

Make time to take your best-performing employees out for a pleasant lunch. Make it a point to focus on the employee and ask about their family, interests, plans, etc. A little one-on-one time with the boss away from the hectic pace of the office is something that busy employees really like.

Host an on-site employee breakfast or lunch and recognize outstanding job performance awarding restaurant certificates, bouquets, gift baskets, etc. as appropriate for each recipient.

Fit the reward to meet the needs/preferences of the individual. A busy working parent might appreciate a day-spa gift certificate, or even the chance to work from home— perhaps one day a week for a month in return for a job well done.

A keen technology buff might appreciate the latest “must have” in personal technology. An employee with a large family might appreciate tickets to a ball game or a gift certificate for dinner and a movie for the entire family.

Low or no-cost ideas include awarding a prime parking spot for the month, or a coffee mug or polo shirt (specially designed for the occasion) for the firms “most valuable player” for the month.

You get the idea. Fit the reward to the accomplishment, make it the “perfect” fit for the specific individual, and make sure that recognition amongst the employee’s peers is in the mix, too.

These articles are intended to provide general resources for the tax and accounting needs of small businesses and individuals. Service2Client LLC is the author, but is not engaged in rendering specific legal, accounting, financial or professional advice. Service2Client LLC makes no representation that the recommendations of Service2Client LLC will achieve any result. The NSAD has not reviewed any of the Service2Client LLC content. Readers are encouraged to contact their CPA regarding the topics in these articles.