Flevy Blog is an online business magazine covering Business Strategies, Business Theories, & Business Stories.

Employee Recognition without Spending a Fortune As an Employer

Editor's Note: If you are interested in becoming an expert on Human Resource Management (HRM), take a look at Flevy's Human Resource Management (HRM) Frameworks offering here. This is a curated collection of best practice frameworks based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts. By learning and applying these concepts, you can you stay ahead of the curve. Full details here.

Featured Best Practice on Employee Management

25-slide PowerPoint presentation
Employee Engagement has emerged as one of the significant pillars on which the Competitive Advantage, Productivity, and Growth of an organization rests. Measuring Employee Engagement is vital in shaping Employee Engagement Strategies that help propel the organization towards growth. This [read more]

* * * *

Every small business owner and manager wants to recognize an employee or employees that do a good job. Every employee wants to be recognized for a job well done, and a successful program positively affects employee morale, individually and as a company.

At the same time, no employer wants employee incentive programs for small businesses that unnecessarily spends money.

Too often, those two goals, recognizing but not overspending, conflict, and employers struggle with figuring out ways to reward employees for great work without spending much money.

Here are several employee incentive programs for small businesses that employers can implement. These programs will recognize employees for good work but will not cost the company much to implement. Some are even free!

Paid Time Off

Giving employees time off and covering their wages is a tremendous morale booster. Everyone loves time off. Some hourly employees, though, would rather work because they need the money. Giving them the time plus pay increases their morale and loyalty to your business. While it costs some money, it is an investment that pays off immediately.

Work Hours Flexibility

Another easy and very low-cost way to recognize superb work and still maintain the same level of work is by granting flexibility in their work schedule. You might have to look for ways to make this happen, and it does not work with every position, but where it does, it is an easy way to recognize an employee that is very popular with employees.

Here are a few ideas on how to make that work:

  • Let an employee shift hours to come in earlier or leave later
  • Let them leave work to pick up a child or attend a sporting event
  • Give them time off for doctor visits or other appointments
  • Allow them to work weekends

The key is to let them make up their hours, within reason, if they put in the hours you expect them to contribute. Employee flexibility in work hours is a huge morale builder. It is so popular that you may decide to grant it on a larger scale, provided work gets done and the quality of the work does not suffer.

Public Recognition on Social Media, in Team Meetings, etc.

It might seem minor, but public recognition for a job well done is appreciated by almost every employee. Too often, employees hear from bosses only if they are delivering bad news or reprimanding the employee for something. Taking the time to publicly acknowledge great work is free, easy, and goes a long way toward building employee morale.

Involve Them in Decision Making

Many employees feel like cogs in a massive wheel and do not feel their opinions matter. When appropriate, consulting with an employee on an issue is a subtle way of acknowledging an employee for their work and gathering a different perspective on an issue.

Another benefit is that ground-level employees often have a better idea of what customers want or how things work, which can give you valuable insight into your operations.

Let Employees Decide Their Reward

Letting employees choose their perk for good work is another low-cost idea that helps build overall morale and buys more goodwill than whatever that one employee decides they want. It lets employees pick what works best for them, which is always popular.

Event Tickets

If you live in an area with many major events, earmarking employees for free tickets can be very popular. If a vendor gives you tickets or your business buys them as part of their marketing budget, occasionally passing them off to a high-performing employee goes a long way towards building goodwill.

Another idea if you decide to do this is to let them come in later the day after the event. Extra time to get in lets them enjoy the event without worrying about what the next day brings.

Designated Parking Spot

If parking is an issue at the office, earmarking a spot close to the entrance and giving it out monthly to one employee is an easy, free way to recognize great work and motivate employees. You will need to have an alternative for employees that do not drive.

Personal Thanks

Whether you have a formal recognition program or not, taking the time to thank an employee for a good job often is better than anything they might get. Too often, even the best managers and bosses forget to thank their employees. A simple thanks is free.

Employee Recognition Rules of the Road

Every employee recognition program must have some guidelines to be applied fairly and, importantly, not be perceived as unfair. Here are some general rules.

Always Be Fair

The key to any recognition or reward program is equality. Every employee should have the same chance at getting recognized. The perception of unfairness can be a morale crusher.

Set a Budget

That probably seems like a weird way to start an employee incentive program, but, like any project, budgets provide structure and demand discipline. Open-ended recognition plans can become spending black holes, especially if the reward for good work involves anything of value.

You cannot, for instance, reward one employee worth hundreds of dollars and other employees that do the same job rewards that are worth less. While absolute parity might be difficult, incentives must be comparable, or you will end up with morale issues.

Clear Everything with HR If Money Is Involved

Your HR department will have rules for recognition programs that govern what you can do and how to do it. For example, some awards count as income in terms of taxes. Other rewards must be applied per government rules. Clear everything, and you can create a program that keeps everyone happy.

Final Thoughts

Employee incentive programs for small businesses are an easy way to thank an employee and build company morale. You do not have to spend a fortune on the program to show some employee appreciation. Use these ideas and advice to ensure your employee recognition program motivates employees to always do their best.

211-slide PowerPoint presentation
Employee engagement reflects the involvement and enthusiasm of employees in their work and workplace. Organizations with high employee engagement achieve higher productivity, higher customer loyalty, better safety, lower turnover and higher profitability. However, in the Gallup State of the Global [read more]

Want to Achieve Excellence in Human Resource Management (HRM)?

Gain the knowledge and develop the expertise to become an expert in Human Resource Management (HRM). Our frameworks are based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts. Click here for full details.

The purpose of Human Resources (HR) is to ensure our organization achieves success through our people. Without the right people in place—at all levels of the organization—we will never be able to execute our Strategy effectively.

This begs the question: Does your organization view HR as a support function or a strategic one? Research shows leading organizations leverage HR as a strategic function, one that both supports and drives the organization's Strategy. In fact, having strong HRM capabilities is a source of Competitive Advantage.

This has never been more true than right now in the Digital Age, as organizations must compete for specialized talent to drive forward their Digital Transformation Strategies. Beyond just hiring and selection, HR also plays the critical role in retaining talent—by keeping people engaged, motivated, and happy.

Learn about our Human Resource Management (HRM) Best Practice Frameworks here.

Readers of This Article Are Interested in These Resources

Excel workbook
The Contingent Workforce Management Strategy Implementation Toolkit includes a set of best-practice templates, step-by-step workplans, and maturity diagnostics for any Contingent Workforce Management related project. Please note the above partial preview is ONLY of the Self Assessment Excel [read more]

17-slide PowerPoint presentation
26-slide PowerPoint presentation

About Shane Avron

Shane Avron is a freelance writer, specializing in business, general management, enterprise software, and digital technologies. In addition to Flevy, Shane's articles have appeared in Huffington Post, Forbes Magazine, among other business journals.

Complimentary Business Training Guides

Many companies develop robust strategies, but struggle with operationalizing their strategies into implementable steps. This presentation from flevy introduces 12 powerful business frameworks spanning both Strategy Development and Strategy Execution. [Learn more]

  This 48-page whitepaper, authored by consultancy Envisioning, provides the frameworks, tools, and insights needed to manage serious Change—under the backdrop of the business lifecycle. These lifecycle stages are each marked by distinct attributes, challenges, and behaviors. [Learn more]

We've developed a very comprehensive collection of Strategy & Transformation PowerPoint templates for you to use in your own business presentations, spanning topics from Growth Strategy to Brand Development to Innovation to Customer Experience to Strategic Management. [Learn more]

  We have compiled a collection of 10 Lean Six Sigma templates (Excel) and Operational Excellence guides (PowerPoint) by a multitude of LSS experts. These tools cover topics including 8 Disciplines (8D), 5 Why's, 7 Wastes, Value Stream Mapping (VSM), and DMAIC. [Learn more]
Recent Articles by Corporate Function






The Flevy Business Blog (https://flevy.com/blog) is a leading source of information on business strategies, business theories, and business stories. Most of our articles are authored by management consultants and industry executives with over 20 years of experience.

Flevy (https://flevy.com) is the marketplace for business best practices, such as management frameworks, presentation templates, and financial models. Our best practice documents are of the same caliber as those produced by top-tier consulting firms (like McKinsey, Bain, Accenture, BCG, and Deloitte) and used by Fortune 100 organizations. Learn more about Flevy here.

Connect with Flevy:


About Flevy.com   /   Terms   /   Privacy Policy
© . Flevy LLC. All Rights Reserved.