Cheap Ways to Motivate Your Team In a recession, keeping morale high is essential.

To grow during the sagging economy, Blue Fountain Media first needed to motivate its employees. Without spending a dime, the New York City-based website design and marketing firm launched a public recognition forum for its valuable team members.

Employees' best work is featured on a company blog, and staffers are encouraged to be brand ambassadors through social networking sites. "It builds trust. Our employees see that they have virtual ownership of the company," says Alhan Keser, Blue Fountain's online marketing director.

It is critical, particularly during these tough economic times, that small-business owners recognize their employees for their hard work, says Cindy Ventrice, author of Make Their Day! Employee Recognition that Works. If you can reaffirm your employees' value while your organization is having difficulty, when there's a turnaround, you won't lose your best people.

Letting them Know You Care
When we think of recognition, we think of praise and awards, but there is a more integrated approach to ensure that members of your crew know their importance. Nearly everything small-business owners do in the workplace either contributes to or takes away from how recognized employees feel.

Doug Dolan leads by example at The Rose Restaurant in Prescott, Ariz. "If I come into work as a victim to the down economy, my team will take on the same attitude," he says. "I use recognition to keep my employees present with the belief that they work for a company that cares."

But all recognition is not created equal. Almost all businesses use some degree of "inherent recognition" in the form of health-care benefits offered, flexible work hours and annual company awards.

But after speaking with hundreds of workers, Ventrice found that the cornerstone of meaningful recognition was actually opportunity. "An award may be a tangible sign of recognition, but employees see an opportunity as a sign that their manager truly values them," she says.

Opportunities don't have to be expensive, either. It could be as simple as trusting employees with important customers or introducing them to an instrumental figure within the organization. It's also been shown that employees find recognition more valuable when it's administered individually rather than as part of a team, Ventrice says.

The business owner or manager is the integral piece when it comes to recognizing staffers. Ventrice talks about the 50/30/20 rule--employees respond best to different kinds of recognition. Only about 30 percent of an employee's overall recognition can come from peers before it's saturated. Thus, 20 percent can come from the business (i.e. inherent recognition, awards), and the other 50 percent must come directly from the manager.

"When you think about it, it makes so much sense," says Ventrice. "Who decides whether we get a promotion? Whom are we trying to impress? So that's who we want to know what we're doing."

Ryan Robinson, owner of Do Dat Entertainment , operates under the mantra that an unhappy employee is an unproductive employee. "I keep my people motivated by telling them how their input specifically contributes to a successful project," he says. "I make sure all of my people feel they are an asset and part of the bigger picture." Robinson gets results from providing his staff with continual positive reinforcement.

In a recent survey, Ventrice found 70 percent of respondents reported the most meaningful recognition came from their managers. It's important for small businesses to think about where they have already put their recognition efforts when considering adding more. This can't be outsourced--it's entirely manager-driven.

Creating Quality Relationships
With a small company, there's no excuse not to know all the employees' names, what they're working on and what their aspirations are. Recognition won't work without respectful relationships intact, Ventrice says.

Often, managers think they're giving their team quality recognition, but it turns out to be meaningless due to lack of respect. For instance, you can have one employee who has a great relationship with her manager and asks him for a day off. When the manager tells her she's too valuable to take any time off, she actually views this as recognition. Whereas another employee with a poor relationship with his boss sees his $1,000 bonus as a ploy and asks, "What is my manager trying to get out of me now?" Ventrice says.

The actual item given to show recognition is the least important piece of the puzzle. Once the manager solidifies a superior relationship with his employees, it's as simple as verbally reinforcing positive behavior. If a manager focuses on the underappreciated performers to figure out what they do well and recognize them for it--those employees are more likely to do more things well.

Through a 2007 survey of employees, Ventrice found that 57 percent of the most meaningful recognition was free and 80 percent cost under $20. If business owners are focusing on the expensive stuff, they're likely missing the mark. "In this economy, that's great news," Ventrice says.

Some business owners believe if you praise someone, that person is naturally going to say, "If I'm that good then I should get a raise." This simply is not the case. "They do not go hand in hand because employees can see the economy around them. They know what things are like and they just want to feel valued."

Then again, if a company turns around, starts to bring in a ton of money and doesn't distribute some of it, people will get conflicting messages that maybe they're not actually appreciated.

Recognition after Layoffs
Entrepreneurs could rest on the fact that many employees are just happy to have a job right now. As many businesses are forced to let employees go, fear sets in with the remaining work force. Though fear is a motivator, it doesn't create loyalty or innovation. When layoffs are inevitable, the treatment of the departing employees can make a huge difference to those remaining.

For instance, the day software company Remedy was forced to lay off a number of employees, it gave people the freedom to come and go as they pleased and eventually leave the office at their own pace. Not only did Remedy not lose any classified information, but the people who were left behind were still optimistic and felt like the core respect was still intact.

Following a crisis like a round of layoffs, it's important to be as transparent as possible with the remaining employees. There will be many unanswered questions, and communicating with your minimized team will reassure them that they are valued.

To know if recognition efforts are working, Ventrice recommends going straight to the source. "Ask your employees how you're doing motivating them through recognition," she says. For businesses with more than 30 employees, a written survey might be a good way to track progress, too.

Cindy Ventrice's book Make Their Day! Employee Recognition that Works is available May 11, 2009.