Keeping a valuable employee, even if it requires a pay raise, is a less costly prospect than searching for a replacement, training and trying to retain that person. Certainly money issues are a concern on both sides of the employment equation, but there are many other steps that you can take to reduce employee turnover. Here are three:

1.) Provide timely and effective feedback.

It may take some extra time and energy on the manager’s part, but really, that’s his/her job.

Richard Stup, a PennsylvaniaStateUniversity human-resource specialist, studied production-agriculture employees and found:

  • Employees want to know how they are doing.
  • A lack of feedback is de-motivating. People often conclude that it doesn’t matter if they do a good job, because no one notices.
  • If negative feedback is needed, just do it. But, do it constructively and clearly so that the employee knows what’s expected. Provide steps that the employee can take to improve his or her performance.

Employees want regular feedback, says Stup. Doing it only during an annual review isn’t enough. Feedback must be timely enough to help the employee shape his performance. It also should come from a credible source such as an owner, manager or supervisor, but by someone who knows the situation.

Stup points to an example where an employee was upset about a fellow employee’s $50 raise. He thought he was being penalized, and it affected his job performance. What the employee didn’t know was that the $50 boost was given only to those on staff for 5 years or more. Once that was cleared up, the employee stepped up his performance. That lack of clear feedback created a negative reaction.

2.) Recognize achievement.

Let employees know the specific things they’ve done to earn recognition, says Don Tyler, employee-management expert in Clarks Hill, Ind. Broad statements like, “you’ve all been doing a good job lately” is not specific enough. Rather, tell them that you’ve noticed how everyone is working as a team.

Be creative and add a personal touch. Spontaneous recognition is highly effective because it is unexpected. Also, make it a bit different each time, says Tyler.

  • Bring pizza in at a shift change so that both groups can partake.
  • Have a picnic or cater a meal for employees and their families. See that owners and managers are there to interact with them.
  • Provide coupons for dinner, fun parks, home-repair stores and oil changes. Consider a specific reward for an employee’s spouse following a particularly demanding period.

Again, remember the power of verbal praise. Don’t wait for an extraordinary event to praise an employee, says Vera Bitsch, labor-management specialist at MichiganStateUniversity. If things have been running smoothly for a period of time, that in itself is worthy of praise.

Note cultural differences. In certain peer groups, an employee may be embarrassed or even ostracized if singled out for public praise. You need to tune into that and determine what type of praise is more appropriate.

3.) Let employees grow.

Professional development is more than cross-training employees to do other jobs. It may involve having an employee take on added responsibility or a supervisory role, it may include outside training.

This shows that you recognize the employee’s interests, abilities and talents, and that you value him.

This can be especially effective with immigrant workers. By helping them learn and grow within and outside of the operation, it shows that you recognize the individual as a person, not just as a worker. You may need to adjust schedules or provide tuition to accommodate additional education, but it can have a long-term pay off.

Tyler offers some other tactics:

  • Have the local banker come in and talk about car loans, managing bank accounts or investments.
  • Bring an insurance agent in to talk about insurance issues.
  • Have a real-estate agent come in to talk about mortgages and home buying or selling.
  • Bring an accountant in to talk about tax changes.

The paycheck is important, but there are many other ways to entice employees to stay.