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The WORST way to reward your staff

Updated: May 7, 2022

If you're of the opinion that pay increases and benefits are the most effective way to reward your staff, you're not alone. But did you realise that this is actually the most expensive way to reward your staff?

We business owners focus on the return on investment when we start thinking about spending money, and you should do the same when it comes to investing in your staff.

I'm not talking about piling more work onto employees in exchange for a pay increase. It's deeper than that.

You don't just need your employees to do a job for you. You need them to want to do it well, enjoy it and to be an ambassador for your business. Most of all, you want them to stay.

So with the goal in mind - why wouldn't you give them regular pay increases and bonuses?

The benefits of pay increases and bonuses are short lived.

It's like that dopamine hit you get when Amazon deliver your package. It's really exciting to unwrap the package and see your new item. But within minutes, hours, days, the excitement disappears and you're back to shopping again.

Pay increases and bonuses have the same effect. Your employees think "ooh lovely, more money" and the next day they're still no more motivated than they were the day before. They are too short lived to deliver you a good return on your investment. Plus, they have to be pretty juicy to motivate staff in the first place.

Pay is also not as tangible as it used to be. If someone gave me a £1,000 in cash, I'd feel like the richest woman alive. But giving me a letter saying "here's your £1,000 which will be spread out over 12 months and taxed..." well it's just not the same is it?

Increasing pay is expensive and ineffective. So, instead of pouring money down the drain, why not reallocate that budget to cheaper, ongoing initiatives that drive the engagement and excitement you want to see?

Here are some low cost ideas for ways to engage and motivate your staff beyond the traditional pay increases.

Physical & Mental Wellbeing

Holiday incentives are great, low cost and ongoing benefits that you can implement really easily in your business that support the wellbeing of your staff

If you tend to lose staff within the first 5 years, why not encourage them to stay with an extra day's holiday per year served?

If your staff love to celebrate big occasions, try giving them their birthdays off every year.

If you have some staff who prefer to take lots of holiday and some staff who just want their minimum, give staff the option to buy additional holidays.

There are also options such as gym memberships, Fruit Fridays or team step challenges.

You could also look into offering an employee assistance programme which offers mental health support.

Financial Wellbeing

High street discounts are a popular benefit because they are easy to apply and they are so wide ranging that everyone benefits. The best thing about discount offers is that it supports people's financial wellbeing in things they would ordinarily buy. For example, if I could get £30 off my weekly shop, that would be much more helpful than 10% off a 50 inch TV that I wasn't going to buy in the first place.

When you start to think beyond spending, there are lots of other financial benefits you can offer to your staff for little to no cost.

You could offer a staff lottery where everyone is entered into a free prize draw to win £50 or a gift voucher.

You could partner with a financial adviser to provide financial advice to employees to help with their pensions or money management.

You could offer will writing services at a discount so employees can have peace of mind.


There are so many offers and ideas out there to help you engage your staff. The first thing you need to do is to understand your staff and what is important to them.

Second, think about what you want to improve in your business. Is it engagement? Retention? Performance? Link your benefits to what you want to improve and what is important to your employees and you can't go far wrong.


ps. did you listen to my podcast about this yet?

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