R-E-S-P-E-C-T: The Key to Employee Loyalty Cash bonuses might make employees happy, but regular praise and communication make them loyal.

If you've taken the plunge and hired employees, you've probably learned two hard lessons quickly:

1. They don't come cheap.
2. Like pets, plants, children and other living beings, you need to communicate with them. You can't just ignore them like a piece of office furniture. To function at peak performance, employees need exercise--both mental and interpersonal.

Most people have a need to be respected; we need to feel that we make a difference. Understand that, and you've got the key to developing an effective work force by communicating with your employees.

Let them know they matter to your company. Here are a few ways you can do that:

• Share the company vision. Tell your employees what your company stands for and where you want to take it. Do you have a company mission? A vision statement? Have you created a strategic plan? Giving bonuses for churning out more sales, billable hours or deals--by itself--doesn't always get people excited about generating more revenue. Letting employees know that reaching sales goals can mean larger donations to charity or giving a needed leg up to a particular industry sector can be a motivating force.
• Listen to employee feedback. Ever heat up food in the microwave and put the lid on too tightly? The heat builds up until the pressure makes the top blow off! Employees react similarly when you routinely greet their ideas for company improvements with a bucket of cold water. That pent-up creativity can explode in unpleasant ways: leaking productivity, or taking that creativity out the door . . . to another job. If you've chosen your employees carefully, you should already have a sense of the potential they can bring to your business. Tap into it!
• Walk your talk. Speak plainly to your employees. When you fudge--as in over-promising and under-delivering on bonuses, benefits or recognition--you can lose employee trust. A sinking morale is a sinking ship (and could be the basis for an employee lawsuit, too). Your employees often have their fingers on the pulse of your company. If sales are stagnant and layoffs or freezes become necessary, give employees the straight talk. By the same token, don't be miserly with your praise for a job well-done or targets exceeded. Employees appreciate recognition and respect. They'll reward you with their loyalty.
• Develop opportunities for collaboration. Human beings are social creatures. Independence can be important but, over time, we need the input and feedback of others to grow. So, look for ways your employees can work together on projects. Or consider regular team meetings where employees can teach one another or share how what they learn outside the workplace can apply within it. That will give them the chance to learn public speaking and leadership skills, too.
• Give regular feedback. Employees don't grow in a vacuum. They need feedback to know whether they're meeting your targets and where their skills need improvement. You'll find them willing to listen to your feedback if you show you're invested in their success. Help them create reasonable and meaningful performance milestones. Don't just wait for annual review time. Also, be forthcoming, frank and constructive with your evaluations.

Of course, there's a fine balance between encouraging and indulging employees. If an employee isn't making the grade, look at whether that's because he lacks the skills (which can be improved with training) or exhibits the wrong character traits (like close-mindedness, which usually doesn't improve). A careful employee review process can help unearth these issues. Speak to your employment attorney to put one in place for your company.

Want more information on conducting employee reviews? Visit my website to get your free copy of my special report, "10 Steps to Effective Employee Reviews."