- Happy employees are more creative and productive. They're also less likely to quit.
- Being transparent and honest with your employees helps them feel valued and respected.
- As an employer, saying "thank you" is a simple but effective way to show your appreciation.
While more money can help put a smile on your employees' faces, it's not the only way to keep them cheerful. Boosting work-life balance, being transparent, offering better benefits and saying "thank you" more often all help boost employee morale. [Check out our reviews of HR software to help you manage employee benefits.]
Here are 12 ways to keep your team happy without offering raises.
1. Prioritize work-life balance.
"To engage the workforce and remain competitive, it's no longer sufficient to focus solely on benefits. Top employers create an environment where employees feel connected to the organization and have a positive work experience that's part of a rich, fulfilling life." – David Ballard, assistant executive director for applied psychology at the American Psychological Association
2. Make employees part of the big picture.
"The best benefit you can provide to your employees is the opportunity to make a difference through their work and help guide the course of the company. Benefits such as clear and frequent communication on company happenings, individual and department direction, and big-picture company direction make all the difference in employee happiness." – Anthony Smith, CEO and founder of Insightly
3. Be transparent and honest.
"Feedback and the ability to understand employee concerns is important, but it's what you do after that's critical to retention. You should always be transparent by sharing what you've learned and a course of action for addressing the issue. For example, after a recent companywide engagement survey, we chose to share our results with all employees. We not only communicated our top areas of success but also our areas for improvement and how we planned to address them moving forward. Transparent communication and a simple acknowledgment that we heard you can go a long way." – Laura Grieco, HR and administration director at ParkMobile
4. Offer more vacation time.
"Reward your highest performers with incremental vacation days. These employees are your superstars, so you can be confident they will get their work done as well as enjoy a few extra days of well-deserved time off with family and friends." – Stacia Pache, founder and CEO of ItBandz
5. Encourage communication in common areas.
"Businesses should take steps to create spaces where employees can easily communicate and share ideas. Casual conversations in the break room can become collaborative conversations. Make it inviting and effective, with nice furniture, tables, and snacks and beverages, if possible." – Tom Heisroth, senior vice president at Staples Advantage
6. Create a career pathway.
"We found that providing developmental support, such as training opportunities and career mentoring, to employees who do not believe there are attractive career opportunities for them within the company led to such employees leaving the organization. It's critical for businesses to have regular career planning discussions with their employees. As part of training and development, make sure employees are aware of the different types of career paths or job opportunities throughout the company." – Maria Kraimer, business professor at the University of Iowa
7. Promote a positive work environment.
"Happy employees make for a happy company. Within the office, we'll publicly acknowledge accomplishments, provide a group lunch, reserve a prime parking space or change a title. We'll also help employees to grow and develop, whether by taking on new desired responsibilities or challenges, taking courses to learn new skills, or furthering knowledge of the company by traveling on company business trips." – Jakki Liberman, president of Bumkins
8. Build employees up.
"If you're looking to keep an employee by giving him/her a raise, it's already too late. Find people who share the operational values of your organization from the outset, test for fit early, and allow growth opportunities to express that value. We're fanatics about initiative and constructive impact. Our team members are consistently rewarded with higher-value projects following a constructive initiative." – Zachary Watson, CEO at HoneyCo
9. Set the example.
"One can't underestimate the importance of walking into the office as the boss with a smile on my face and making sure I give the same feeling of importance to everyone." – Jon Sumroy, CEO and inventor of Mifold
10. Always say 'thank you.'
"In my experience, employees rarely become unhappy or leave solely over money. When they do become disenchanted, it is usually because they don't like their boss, aren't engaged or feel like they have stopped learning. Having a positive culture and workplace environment helps a lot, as it encourages teamwork and communication, which increases engagement and opportunities for teammates to learn from each other. We also do periodic shoutouts to people at all levels of the organization for great work or superior effort. These kudos cost nothing but provide important public recognition for a job well done, effectively compensating people in the form of social currency, which is highly valued." – Gary Beasley, co-founder and CEO of Roofstock
11. Recognize and reward employees frequently.
"Reward frequency is more important than size. Business feedback indicates that smaller, frequent positive feedback and rewards will keep people happy longer than a single large, infrequent happy event. Even the biggest awards or raises 'wear out' in less than a year, with most employees responding better to small doses every few days." – Ron Friedman, author of The Best Place to Work
12. Offer benefits beyond the basics.
"There are many ways to supplement salary by assisting employees in other areas of their lives. You can offer an extra level of life insurance or disability insurance for employees to protect their incomes. Other ancillary benefits, such as dental, optical and wellness, are all well received by employees. And gym memberships and transit benefits are great perks to keep employees happy and healthy. It is important to provide higher benefits so your employees know that you truly care about them and their families." – Bobby Hotaling, president and CEO of The Hotaling Group
Why is employee happiness good for business?
Employees with positive attitudes are valuable assets for you and your team. Here are six reasons why it's worth your efforts to improve employee morale at your business.
1. Happy employees are smarter workers.
Workers make better decisions when they're not bogged down by fear and anxiety, according to a Swarthmore College study. When employee morale is high, employees take educated risks compared to stressed-out workers, who tend to be more distracted. Part of what inspires this clarity and behavior is the confidence that you, as the employer, instill in your team through respect and appreciation.
2. Sad workers quit.
Unhappy workers are more likely to leave for a new job. When a workspace is unhealthy, it impacts employee retention. This makes employee turnover inevitable, which places additional stress on your business as you must then direct your resources and efforts to interviewing candidates and training the new replacement.
3. Happy employees are more creative.
Adobe's State of Create study found that satisfied employees are more innovative, which is extremely beneficial for the growth of your business.
4. Happy employees provide better customer service.
Clients appreciate interacting with upbeat employees – they tend to be attentive and deliver a higher quality of service. When interactions with your staff are positive, customer satisfaction increases, which can improve client retention and business profitability.
5. Dissatisfied workers work less.
Displeased employees tend to get less work done than happy employees, according to the Social Market Foundation's happiness study. Researchers found that the group that was treated to snacks and 10 minutes of watching funny videos was not only more engaged when it was time to work, but was 12% more productive than the group who wasn't treated.
6. Happiness is infectious.
Happiness spreads and affects the energy of the entire team. When you create a pleasant company culture, it maximizes the positive impact throughout your business. This boosts overall employee engagement and strengthens comradery among your staff.
Additional reporting by Marci Martin and Nicole Fallon. Some source interviews were conducted for a previous version of this article.