January 23, 2008 - Gift-giving in the New Year: How to reward employees effectively

With the season of giving still fresh in our minds, let's talk about rewarding our
employees. When an employee deserves special recognition, there are many options.
However, I'm constantly amazed by how many transactions I see between employers and
employees that don't benefit either side. The employer gives something they consider
really valuable, but the employee receiving it doesn't see its value. Neither party ends up
happy. The best transactions are when you give something that doesn't cost you much but
is of great value to the recipient.

Let's say you decide to give your neighbour the snow off your front lawn. Snow in
Ottawa makes Christmas that much better, doesn't it? But your neighbour isn't likely to
appreciate it considering they already have enough snow on their lawn to build a dozen
snowmen. It's the Canadian equivalent to selling sand in the desert.

Techies: consider this real-life example. You believe the shares in your company could
easily be worth 10 times as much in five years. These shares are valuable to you, but if
you give them to an employee whose biggest priority is to pay bills and feed their family
now then you probably aren't going to receive a big thank you. Even with the shares, you
might find that employee asking for more. The increase in salary should have been your
first choice. If you get to know your employees better, you will find out what kind of
rewards engage them the most.

Money can't buy you love, but in business, money can do a lot of other things. Money is
often the best way to motivate employees. You can pay them dividends, raise their salary,
or offer bonuses for projects completed on time. However, money isn't the only way to
spread cheer all year 'round. Here are a few non-monetary methods to add to your
toolbox.

Give time off
Many employees would be happier with time in lieu of pay or extra vacation days. These
employees may appreciate the time off to go skiing with the kids or to finish a basement
renovation project. Studies have shown that employees can be more productive when
they have had some time off. Maybe that's why the Spaniards invented their siesta! It's a
well-known fact that afternoon naps energize and re-focus one's attention. In many
European countries, employees get six weeks of paid vacation every year compared to
our Canadian two or three weeks. Maybe one day Canadians companies will follow suit -
when we're not afraid of appearing lazy. We might just have more energy to do our jobs.

Share company equipment
When I was at the bottom of the food chain, I couldn't afford more than the basic
necessities, so I was relieved years ago when my boss let me use the office printer to print
my wedding invitations. It was so nice to print the invitations for free at a time when so
many wedding expenses loomed. Plus, it cost my boss next to nothing. Once in a while, I
like to pass such favours forward and do similar things for my own employees - and they
may be the ones mentioning it 22 years from now.

Along the same lines, if you have a company car for running office errands, then maybe
you can lend it to junior employees who usually take the bus. You could leave them to
brave OC Transpo and take six different connections, waiting for each one in the freezing
cold, or you could pay the few dollars in gas and let them take your car there in 10
minutes. If they need to run the occasional personal errand that involves tricky bus routes,
you'll free some time for them to get more work done, but again, they'll mention such
little things to their friends for years.

Invest in new gadgets
You can take the lending approach a step further. Consider investing in special equipment
to enhance projects, but which would be useful or fun for employees to use personally.
Over the years, at my company, we've worked on a number of products for the
automotive industry. So we've purchased laboratory equipment for automotive testing
that we've needed during these projects. Our engineers can use this equipment to do work
on their own cars as a side project, and it doesn't cost our company anything to let them
experiment to their heart's content. Small gestures can really make the office or lab a
more satisfying place to work.

Reward with new responsibilities
Some people are striving to move up in your company or add to their skills list. The best
way to reward these employees is to give them new responsibilities. The feeling of
contributing substantially to the company's overall success can really engage high
performing employees to stick around.

The benefits of rewarding employees are numerous and diverse. But remember - just
make sure to reward your employees with what is valuable to them. Feel free to e- mail
me with your own ideas at Michael.Wakim@fidus.com.

Mike Wakim is the founder and CEO of Fidus Systems, an Ottawa-based electronic
product development company. Fidus develops electronic products for a wide range of
industries including aerospace, defence, consumer, medical, industrial, semiconductors
and telecommunications.