How to Reward Staff for Outstanding Behavior Without Breaking the Bank

In a business in which service consistency and quality can make or break you, high-quality employees may well be a restaurant's most valuable feature. And in a business in which margins are tight and you have to watch every penny, rewarding top performers isn't always easy.

There's the rub. Still, you want your best and brightest to stay and be happy.

The good news is operators needn't break the bank to accomplish this. In fact, there are rewards that are equally if not more important to staff members than cash. For owners, creativity and personal touch in this regard can go a long way.

"Over the years I have learned that rewarding staff, if done properly, is not an easy task," says G. Pony Boy Morrell, the chef/owner of Pony Boy Blue Blaze Café, a pizza, wings and "local brews" establishment in Damascus, Virginia.

"It's a bit like picking out a gift for someone's birthday or a holiday: You can spend no time at all and go to 1-800-flowers and get the job done, or you can spend a few hours at a vintage bookstore and pick out a signed first edition of a book written by the recipient's favorite author," Morrell says.

It is easy to offer a $50 bill on a dessert contest, but most of the time the thrill is short-lived and underappreciated. However, two tickets to a band that you saw on their T-shirt on their day off will go a long, long way.

One thing Morrell says he has learned during his career is that few staff members are as money-motivated as most operators are. "It is easy to offer a $50 bill on a dessert contest, but most of the time the thrill is short-lived and underappreciated. However, two tickets to a band that you saw on their T-shirt on their day off will go a long, long way," he says.

There is any number of approaches that restaurateurs can take with incentives.

Wish List

"When I operated my own restaurants and had very little cash flow I knew I had to be creative with rewarding and retaining my staff in a creative, low-cost manner," says veteran restaurant consultant Arlene Spiegel, FCSI, president of Arlene Spiegel & Associates in New York City. "So when I hired them, I asked them to create a 'wish list' of things they wanted in three tiers: $50, $100, $150. I kept each wish list in the employee's personal files. Some of the 'wishes' were movie tickets, sneakers, dinner out, flowers, days off, attendance at a trade show; and even additional 'free' uniforms."

As the employees were "caught in the act of doing something special," or after a particularly successful week or month, Spiegel would go into the "wish list" files and grant their personal wishes. "Of course, each gift matched the relevant tier in dollar amount (and came with) a personal, handwritten note from me. As it turns out, after years of keeping in touch with former staff, the personal notes had the most sustainable value."

Incentives can be offered for upselling of the food and beverage menu, says Ed Norman, FCSI, CSI, the principal of MVP Services Group, a food facilities design and hospitality consultants company in Dubuque, Iowa. The incentive can be offered by shift, day or week. "Depending on the operator, these small incentives can be in the form of free meals, small-denomination gift cards, or the latest inexpensive tech gifts that appeal to a wide variety of folks."

"When the employees want a party, we ask them to tell us what they want for a budget, what they want as far as catering -- from somebody else -- party favors, entertainment, etc., so that we can say yes," says Kurt Drennen Mirtsching, whose title is "Head Cheese" at the two-unit Shakespeare's Pizza in Columbia, Missouri. "The big annual ones are Memorial Day, New Year's Eve -- we're closed for those two -- and Halloween, after-hours. We have a couple of other smaller ones throughout the year." He and his management team get a lot of mileage, in terms of morale and "good juju," from subsidizing big fetes. "At a cost equivalent of about two to four man-hours per employee, it's a steal."

"We have wooden nickels that we give to the employees when we catch them doing something right," says Tom Martin of TS&S Eateries in Clovis, New Mexico, which operates Taco Box restaurants in Clovis and Portales. "Each wooden nickel is worth $1. Once they accumulate at least 15 they turn them in and we give them a check. At one time we actually had wooden nickels made, but now managers use their business cards and write 'wooden nickel' on the back."

Taco Box managers also give movie passes to the employees for doing something "extraordinary," Martin says. "We used to get a discount from the theater for purchasing a quantity, but now they are full price. It ticks me off." The company has also traded out coupons with McDonald's, but the coupons are unpopular with the employees, he says.

"We've used a number of tools without clients that are inexpensive," says Tom Bruce, founding officer of Central Coast Food & Beverage (formerly known as Sacramento Food & Beverage), a consulting company specializing in concept development, operational troubleshooting, progressive training tools and safe food-handling practices. Examples include giving out wine sample bottles for high wine sales and concert tickets to younger staff for outstanding efforts.

"We've found it very effective to work with other operators in the area and exchange $50 gift cards," Bruce says. "The hard cost is generally less than $20 when someone from another operation redeems one in yours, but the impact is great on the employee. Some of the Napa wine growers will also host tours, tastings and sometimes overnight accommodations on the grounds for outstanding wine sales or wine committees."

Recognition

"The best way is verbal recognition, recognition, recognition," says Juan Martinez, Ph.D., PE, FCSI, the principal of Profitality, a Miami-based consulting firm specializing in, among other things, strategic operations and labor management. "Internal -- between employees -- and external -- communicated to customers somehow." Small monetary tokens, even free meals that would not cost a lot, will also help, he says.

"People love to get recognized for a job well done in front of their peers," Martinez says. "Additional money or other rewards over the verbal recognition helps, but is not a must. I think that employees also recognize that enough of these recognitions will get you noticed, and that financial rewards, and/or promotions, could follow."

A short-term customer feedback program can be offered that will help to identify star team members who "go the distance to satisfy their guests and make the dining experience personal," Norman says. Many of these programs can be delivered electronically through SurveyMonkey or with table cards. "Again, gifts don't have to be extremely expensive, but must be valuable enough to get the staff's attention."

Keep Staff Parties at Work - The biggest mistake I ever made was to have a staff party at our house," says Mark Keilholz, the owner of Skyline Chili in Dayton, Ohio. "We live in a nice three-bedroom ranch in an older neighborhood. Some staff saw how well we lived and was jealous, not thinking about how hard we had worked to get where we were -- with their help, admittedly -- and the sacrifices we had made along the way. This led to resentment in some cases.

Creating an employee-of-the-month program "can really get people pumped up if the honor is bestowed along with a nice gift and recognition both external and internal," Norman says. A wall plaque showing the monthly achiever, or an ad in the local newspaper with the winner's photo, are recognition examples that boost egos and show that the establishment recognizes the value of their best employees. "Perhaps the employee gets a special parking spot; a one-time bonus check; an award or certificate that they can take home and use in their resume in the future; a sizable gift card; inclusion in trade show visit, etc. These are nice ways to make this special and meaningful." This can also be expanded to an employee-of-the-year program if criteria are fair and managed throughout the year, he says. "The important element is to make it fair and impartial, and based upon customer input only."

The Team Approach

Team bonuses for outstanding operational results are a bit tricky, Norman says, but can be done easily, as a monthly or quarterly program. He envisions it working this way:

The owner would set certain operational criteria that serve as the performance base point for the team. "If the team exceeds the base point then a bonus is paid to the entire team," Norman says.

Keep the criteria short term rather than long. "People like to get incentives regularly, and not have to wait a year to achieve an end result of value," Norman says. "For example, if the establishment currently sells an average of 10 bottles of wine per dinner period, then a team bonus would be made available for every five to 10 additional bottles sold over the base point. If you start looking at your operation and evaluating your margins, it becomes fairly obvious what items you wish to increase sales of from a sales/margin standpoint."

Be sure to make the bonus achievable, but still require effort. "Things that can easily energize staff can also bring them down just as quickly. In the previous example, the operator may set the goal at five to 10 additional but still offers a bonus if the team only achieves a three-bottle improvement. This doesn't need to be stated going in; make it a surprise."

Genuine, Personal, Cool

Mike Michalowicz, CEO of the Provendus Group in Fair Lawn, New Jersey, a consulting firm, says the best employee incentives are physical, tangible gifts, "and the reason it has to be physical is because now it has permanence. The problem with cash is that if I'm your employee and you give me money I'm grateful for the moment, and then I forget about it the next day. With a permanent gift, it will sit there for years if it's appreciated by the employee, and they will think of you all the time. The one little caveat is it's got to be applicable to what they want."

For this reason Michalowicz, a former small-business columnist for The Wall Street Journal, encourages employers to get to know their employees. "Know what they want, what they hope to acquire one day, and give that specifically," he says. Case in point: "I have one employee, a young guy, who always wanted a PlayStation. He was putting money together to get it, and after a year of employment, when bonus time came around I got him the PlayStation and the five or six games that he aspired to have. The guy loved it, was crazy about it. Two years later his father wrote me and said, 'Mike, I never reached out to you but I want you to know that we still talk about you. That was my son's best job to date. Thank you for what you've done for him.'"

Picking a personalized gift shows that you are thoughtful, Michalowicz says, and that you gave him something that he cared about and had permanence. "It refreshes their memory every time they see it," he says.

Cash, Michalowicz says, is not only the easy way out but sets a precedent. "If I give you a check, next year they expect the same. If I give you a gift they expect the same, too. Once you get into the cash mentality you are stuck with it for life. Provide a bonus check two or three times in a row, and on the day you don't give one the employee will think, 'What, is the business in trouble? Are you just being Scrooge?' So realize that you are setting a precedent."

The coolest incentive, Michalowicz says, is a gift not for the employee, but for his or her significant other. "If you give me a gift to give to my wife or significant other, or to one of my children, now you're involving my family in a good way. This is a little trick I did with my employees at my old company. When a new person would come on board, at their desk would be a gift sitting there, but with a note that said, 'This isn't for you, it's for your family.' Then when someone goes home from their first day of work we all know there is one question they are going to be asked: 'How was your day?' It was the most important day of this person's new career. Now the employee is giving them a gift and saying, 'It was a great day and look what you got.'"

One caveat, he says: "It's all got to be rooted in being authentic and genuine. These techniques definitely play with behavior, but if you do it as a manipulation you're going to get caught; it's inauthentic and it's going to work against you. It has to be rooted to who you are, and then it works magically."

76 EFFECTIVE LOW OR NO-COST STAFF REWARDS

Mike Michalowicz, CEO of the Provendus Group in Fair Lawn, New Jersey, a consulting firm, has compiled a list of 51 employee rewards employers can give that don't include cutting a check. Here they are:

1. Let the employee dump the one project they like least to you.
2. Use of the president's office for a day.
3. The front parking spot.
4. A handwritten thank-you note.
5. Name the conference room or lounge after them.
6. Invite their spouse in for a lunch on the company.
7. A reserved parking spot.
8. A video game for the employee to give to their child.
9. A vacation day.
10. Brand-new desk, chair or other piece of office furniture.
11. Bouquet of flowers.
12. Prepare a short video montage that celebrates the employee's accomplishments.
13. A public thank-you.
14. Send a birthday card to them at their home address.
15. Pay for them to take a fun class, such as cooking or skydiving.
16. Find something they like to collect, such as stamps or coins, and give them one for their collection.
17. Let them suggest a way they would like to be recognized.
18. Write a note to their family, sharing how important the person's contribution to the company has been.
19. Keep the break room stocked with their favorite drink or snack.
20. Buy them tickets to a concert, show or other event.
21. Give them a small gift card from their favorite store.
22. Pick up a book or CD for them by their favorite author or artist.
23. Pick up the tab for them to have a family portrait taken.
24. Pay for their child to go to camp.
25. Buy a few extra boxes of Girl Scout Cookies from their daughter.
26. Give them a pair of movie tickets.
27. Help them with gas prices by giving them a gas card.
28. Provide them with a formal letter of appreciation for their personal file.
29. Create a "day pass" that they can turn in to take any day off, no questions asked.
30. Find a deal on a couple of three-day cruise tickets and set them up with a short vacation.
31. Allow them to be flexible with their hours.
32. Let them choose one day a week to work from home.
33. Have a birthday cake delivered to the office on their birthday.
34. Get each employee to write something positive about the person on a piece of paper, and give them the box of collected sayings, or frame them for the employee.
35. Start a company "Wall of Fame" and add them to it.
36. Find out what they are passionate about and give them a gift that relates to it.
37. Create and give them an award that they can keep and frame for a job well done.
38. Surprise them with an outdoor catered picnic.
39. Have a mobile car wash come to the business and clean their vehicle.
40. Get them a subscription to their favorite magazine.
41. Pay for a membership in a trade association of their choice.
42. Have a staff appreciation day once a month to provide them with a catered lunch.
43. Give them and their colleagues a catered breakfast.
44. Give them a new, improved job title.
45. Provide them with some one-on-one mentoring.
46. Institute a "playtime," when employees can play games or shoot some baskets.
47. Host an annual awards ceremony and give awards to employees for their contributions.
48. Celebrate the anniversary of their joining the company.
49. Allow them to dress casually on Fridays.
50. Have a massage therapist come to the office once a month and give a massage.
51. Create a relaxation room, where the employee (and other people you are rewarding) can go during the day, to read or even play a video game on their break.

And Kevin Kruse, a New York Times bestselling author and speaker on leadership and engagement, says that research shows that feeling appreciated, which comes from recognition from others, is one of the top three drivers of employee engagement. "The best news is that showing appreciation doesn't have to cost a lot of time or money," Kruse says. To illustrate that, he put together a list of 25 no- or low-cost ways to recognize colleagues:

1. A sincere word of thanks costs nothing and is very effective.
2. Post a thank-you note on their door in their honor.
3. Throw a pizza party or cake party in their honor.
4. Create a simple "ABCD" card that is given when someone goes "Above the Call of Duty."
5. Write about them in a companywide email.
6. Give a long lunch, extra break or comp time.
7. Honor them at the start of the next staff meeting (recognize someone at the start of every staff meeting).
8. Post a "thank you" sign in the lobby with their name on it.
9. Give flowers, a book or other small gift.
10. Invite them to a one-on-one lunch.
11. Give them a card with lottery tickets inside.
12. Give them a card with movie tickets inside.
13. Give them a card with a Starbucks gift certificate.
14. Have the entire team sign a framed photo or certificate of appreciation.
15. Arrange for a boss several levels up to stop by to say thanks.
16. Send a thank-you note or gift basket to their spouse.
17. Arrange to have their car washed.
18. Arrange to have their home cleaned.
19. Let them bring their pet to work.
20. Buy a dozen doughnuts and announce to the department that they are in the honoree's office; they should stop by to say hi and get one.
21. Feature them in the company newsletter.
22. Pick an unusual or funny object and place it on their desk for a week.
23. Let them dress casual for a day.
24. Have entire team honor them with a standing ovation at the start of the next staff meeting.
25. Offer to swap a task with them for a day or week.