How To Take Care Of and Compensate Employees Well

How To Take Care Of and Compensate Employees Well

Employees are the lifeblood of a business.

Richard Branson has said that taking care of employees is one of the most critical things you can do in a business because how you treat them will reflect on how they treat your customers. And if your customers aren’t treated well, your profits, reputation, and everything else will go down.

So what can you do to really take care of your employees and make sure they feel appreciated?

1. Compensate Them Well With Salary

This is the most obvious so I’ll address it first. As you’ll see later, there is a point where this becomes less effective.

For many lower-tier employees, they simply are not paid enough so simply giving them more money could really help out their financial situation and show that they are being appreciated.

If your company gets large enough, there will most likely be people paid close to minimal wage that are doing fantastic jobs. For these people, monetary compensation could make a huge impact to their lifestyle and standard of living.

Sam Walton of Walmart did just this when he compensated many workers for extraordinary ideas that saved the company millions of dollars. Oftentimes, the ideas were very simple, like changing one little thing in the workflow around that were overlooked because they weren’t seeing it from the same level.

There are people who are still motivated by earning more money even though they make millions. But they’re in the minority.

As you will see with evidence later on, you will get diminishing returns in performance and appreciation when you reward someone with more money. Super achievers quickly grow out of simply wanting money, often before even hitting six figures a year. They start to turn to other motivators like work-life balance, fulfillment, passion, interest, and a higher purpose.

2. Create An Environment That Cultivates Their Strengths

No employee wants to feel constrained because they cannot fully express their talents at work.

In Dan Pink’s awesome book Drive: The Surprising Truth To What Motivates Us, we learn that many people are motivated by things outside of money. In fact, for creative professions, offering any type of monetary incentive (a $100 reward for example) makes it more difficult for them to come up with solutions.

It actually slows them down.

They ran numerous experiments to test this.

They found that monetary rewards and bonuses worked best for non-creative manual labor-type jobs.

What this means is that for creative-type individuals such as certain designers, programmers, employees at Google, and story-tellers, money alone is not enough.

Creating time in their work day, an environment, and lifestyle for them to perform to their strengths and be creative will really put them into a state of flow, happiness, and well-being that leads to greater results.

In the book Creativity Inc, I learned that Steve Jobs designed the Pixar campus in a way that forced intermingling and collaboration. He made you have to get out of your way and walk around to meet others in order to go to the bathroom.

Richard Branson creates an awesome environment by having the few meetings he does have in the beachy sands of Necker Island.

People love a tropical, sunny, exotic work environment after all. They save up for years to go on a 2 week vacation to such a place. Branson makes it a daily thing. Unfortunately, this isn’t feasible for every business. But maybe it can inspire some creative ideas of accomplishing a similar thing.

3. Show Appreciation In Cheap Ways

We’ll get to expensive ways later.

However, cheap ways of showing appreciation are often overlooked simply because they aren’t expensive and sometimes because they require more personal time and effort.

An example of this would be a hand-written card and a bouquet of flowers surprise delivered by you personally for an employee’s birthday. You cannot just throw a thousand dollars and outsource it away. You have to write it yourself and show up.

Cheap sometimes trumps expensive ways of showing appreciation because no one else is willing to put in the time. Also, everyone knows how busy you are and the time-value of your time.

To get the creative juices flowing, here are a few other examples of cheap but effective ways of showing appreciation: hand-baked and hand-delivered brownies or cupcakes, a personalized letter with a very well thought out list of books you’ve bought for someone, or a surprise free product hand-delivered by you.

Showing clearly that you spent an hour or more thinking and creating something can mean a lot more than spending 2 seconds to throw 1,000 dollars+ at an expensive gift.

This same concept works in terms of forming friends and in the love and relationship world.

4. Give Them Gym Benefits and Encourage Them To Exercise

This is precisely what the billionaire T. Boone Pickens did in his book, The First Billion Is The Hardest.

In his book, I learned that he built an enormous gym next to the workplace and encouraged his staff to exercise. He even started company-wide exercise competitions to further encourage it.

The results over the years were incredible. Their profits and productivity increased immensely.

This is not rocket science. Every year, there are more studies showing how the more fit you are, the better you are in numerous other areas: productivity, focus, energy levels, happiness, and so on.

See my article The Cyclic Effect for greater detail on this or this page at that lists pages of studies on the effects of great fitness. From my own studies in courses I have taken in Exercise Physiology, I have learned that you should REALLY do moderate to high intensity aerobic exercise over anything else.

Aerobic exercise is simply cardio like swimming, jogging, or cycling. Studies have shown that it has magnitudes higher impact on your health and longevity compared to anaerobic exercise like sprinting or weight lifting, which often only just increases your muscle mass.

Consider adding gym benefits to your list of employee benefits. And maybe some culture-building fitness activities or competitions.

5. Praise Them In Person

This kind of goes in line with the cheap methods I mentioned earlier but it deserves it’s own category.

Make sure to take some time to really show appreciation in person to people who deserve it, especially if they’re not used to seeing you that often if at all.

Go out of your way to praise them in front of their peers. A person can really feel special and appreciated when he is given recognition in front of others. Depending on the person, a physical reward might also be useful: a trophy, medal, bonus, watch, car, or flowers.

Try thinking outside the box. Maybe something non-conventional like a surprise dinner at a surprise restaurant could work even better.

Make sure you praise generously and saw their name a lot. People love it when you take the time to remember their first and last name, especially in a larger organization.

Finally, make sure that the praise is truly warranted. If the wrong person is praised or recognized, it could breed resentment in the organization from peers. If it is truly well deserved after examination, be generous with your praise.

6. Take Care of Their Personal Life and Overall Lifestyle

This gets into more expensive ways of taking care of your employee.

Even then, in the end, it may not be as expensive in the long run as straight salary competition.

I was watching an interview by the entrepreneur Neil Patel. He was recognized by Obama as one of the top 100 entrepreneurs under 30.

He said that one of his employees was offered over $200,000+ by a competitor but turned it down to keep working with Neil for around $80,000. He did that by taking care of his employee beyond work: taking care of their personal life and family problems.

Consider things that may be an issue or inconvenience to employees outside of work: family health issues, jugging responsibilities with children, or anything that might stress them out when they’re done with work.

If you can pay for that or find a way of fixing it, it could mean a huge difference.

Pixar Inc. has its own company daycare since most of the employees met and married through the company.

7. Create A Lifestyle That Works With Their Peak Performance Environment and Time

GitHub is an organization that does just this.

They understand that people are different: some people are morning people while others are night owls. They let people do their work when it’s most productive to them as long as it gets done.

This means that employees can work 5pm to 4am or 5am to 11am and 5pm to 9pm. It’s been very productive just as long as the work gets done, which they measure.

Employees have been extremely satisfied with this because of the freemetidom it gives them with their day-to-day. It also lets them do things on their terms.

Having said that, this can be taken too far and may only work for some organizations. Sometimes, collaborations and in person meetings are crucial. Therefore, people have to meet on the same schedule.

Best Buy rolled out a work from home option that many employees took up for many years. Eventually, they stopped the program as it wasn’t working effectively.

8. Transition Them To What They Enjoy

Happiness studies have shown that once a certain threshold of money is made per year, the amount of additional happiness per dollar earned rapidly diminishes.

One of the big drivers that many people look to after that certain threshold of money is passion or higher calling. They want a dream job that they can enjoy. Or they want to make a higher impact on the world: make a difference, save lives, change the world, or create something new.

Of course, you must keep in mind how the business makes money and what you employ people for, but once you do, see if you can reposition, promote, add new responsibilities, or move someone to a new position.

If you can keep an open ear to listen to what your employees enjoy more but don’t have as a responsibility yet and an open eye to see where they could function better, it could make for a great win-win situation when you find something that suits their tastes better because it allows them to perform better.

9. Strengthen Community, Family, Friends, and Relationship Bonds

Relationships like family and friends play a critical role in human happiness, oftentimes more than money. This goes back to looking to see how they live their lives outside of work.

According to the book Social by Matt Lieberman, forming a strong community at work and outside of work can really develop emotion resiliency, happiness, well-being, and other elements related to peak performance.

Make sure your employees have access to the time and resources to form these relationships with friends, whether its at a religious organization or informal social gathering.

10. Give Greater Access To Common Hobbies

This may not work for every organization as people could have hobbies all over the board.

But for certain cultures, you may see large similarities: a ton of people love yoga, fashion, or rock-climbing. Perhaps, you can go out of your way to make sure that their enjoyment and access to these activities is heightened.

Maybe this could mean insider access to fashion shows or yoga events. Maybe this could be yoga or rock-climbing-themed giveaways.

Another thing you can consider is adding activities that science has shown improves success, cognition, focus, and a number of things. One of those was already mentioned: exercise. Another is meditation.

However, this could definitely be perceived the wrong way depending on the culture. If none of them value or understand meditation and you go about it the wrong way, it could just be perceived as another hindrance or duty that they have to perform on a daily basis.


According to the founder of Walmart in his book Made in America, taking care of your employees matters a lot because how you treat them is a reflection on how they will treat your customers. And what’s the benefit of treating your customers well? According to Warren Buffeett, the better you treat your customers, the more money you will usually make.

Now, I have a question for you. What’s the #1 lesson you learned that you can take action today to improve your employee care?

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By Will Chou

I am the the founder of this site and I am grateful you are here to be part of this awesome community. I help hard-working Asian American Millennials get rich doing work they love.

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