From the December 2004 issue of Entrepreneur

Bonus Round

How can you keep your employees happy when they've hit the top of the company's wage scale?

It's a tricky question business owners face as the economy shows signs of life. "Entrepreneurs should continue rewarding employees, because if they don't raise the bar, someone else will," says Bill Coleman, senior vice president of compensation for salary website Salary.com in Needham, Massachusetts. Here are ways to reward employees who have hit the company's salary ceiling:

  • Offer money by other means. Gift certificates, equity, paying for a night class, or offering an impromptu $100 bonus can all work in lieu of a raise. Employees can feel just as rewarded if you spend money on them in ways other than straight salary.
  • Look past money. Enhancing a job title, offering more vacation days, or assigning high-profile and special projects are ways to keep workers happy if you can't pay them more.
  • Make it personal. What does the employee value? Tying monetary and nonmonetary rewards to the individual can have a big impact on morale, productivity and tenure. This way, "everyone doesn't get the same cheese basket," Coleman says. "And it shows you thought about it."

57%
of workers are happy with the balance between their social and work lives.
Statistic Source: Pendaflex

30%
of managers are viewed as "severely lacking" in their ability to manage other people.
Statistic Source: Right Management Consultants