So what’s a smart employer to do at raise time? The worst thing you can do is nothing. Ignoring raises only makes employees feel used, unappreciated, and unmotivated. According to Larina Kase, Ph.D., author of The Confident Leader, “Study after study has shown that what motivates employees is not money. Money can make employees unhappy if they’re not sufficiently compensated, but it has not been shown to lead to motivation, satisfaction or performance.”

So instead of ignoring the elephant in the room, be upfront. Sit down with each of your employees as their reviews come due and explain that even though you’d like to hand out raises, this year it’s just not in the cards. Then take your compassion one step further and offer perks instead. Perks are a great way to show your staff that you really are grateful for their support. Even little things mean a lot, such as:

1) Premium Parking

If your employee commutes, a great perk is to offer a premium parking spot right near the entrance of your building. Such spots are usually saved for executives or employees of the month. However, in lieu of a raise you might want to use these spots as a substitute perk. And if there are fees for parking, be a hero and pick up the tab for that as well. Or if your employee takes the bus or train, offer to buy him an annual bus or train pass. It’s still cheaper than increasing an employee’s salary, plus the expense is tax deductible.

2) Late Start/Early Release Days

Let your employee pick a day of the week that he can come in an hour late or leave an hour early over an extended period of time. The most obvious day would be every Friday, however, maybe a different day would be more accommodating due to childcare responsibilities. Or you can offer a few extra paid personal days; for example, the employee’s birthday, anniversary, or their kids’ birthdays. If they want to use these days to bank extra paid sick leave that’s fine, too. They’ll thank you the next time junior gets a cold and can’t go to school.

3) Gym Memberships

Purchase an annual gym membership for those employees who want one. This option doubly works in your favor in that if your staff gets in shape they’re apt to have less sick days. Many big companies already have in-house gyms for their executives. Maybe it’s time the bigwigs gave up their gym memberships in favor of handing them over to their employees as perks.

4) Provide Electronics

If you don’t already provide cells phones or laptops for your staff, doing so can ease the blow of not getting a raise. Purchasing a cell phone and paying the monthly fee is still cheaper than raising an employee’s salary. Ditto on buying him a $500 PC laptop. Again, the added benefit for you is that your employee may even use those items at home to get some extra work done.

5) Gift Certificates

If you’re really strapped for cash gift certificates for massages, dinners, theatre tickets, even the movies show that you’re making an effort to show gratitude. This is definitely your most economical option, but regardless your thoughtfulness will not be lost on your employees. They will appreciate that you at least did something.

Yes, your staff will be disenchanted if you can’t afford to give raises or bonuses this year, but it’s not like they don’t know what’s going on in the world. If, however, you acknowledge your employees with a small reward (to show your appreciation) your efforts will be repaid tenfold with a motivated staff that’s ready to stick with you through thick and thin.

Do you have a good idea for an employee incentive? Share it with us. We’re always looking for alternative ways to make the great American business perk more rewarding and meaningful.

You can choose to obtain a business degree, a marketing degree or specialize in an even more focused field so that you will be properly prepared to run a winning industry. There are so many options available to you today through traditional or online schools to obtain the business degree that will be the most beneficial to your trade. Go after the area that interests you. The sky is the limit!

However, there are ways a smart business leader can streamline overhead without eliminating the workforce. Depending on how hard the financial meltdown has hit you, it could be your business simply needs a makeover in order for it to be financially fit again. So before you hire some corporate consultant bozo bean counter to come in and fire everyone (leaving you to do all the work), try these five business makeover strategies first.

1) Go Virtual All the Way

Yes, it might be time to give up the big, fancy (expensive) office space in favor of letting everyone work at home. Next to employee salaries and benefits, office space rent is the second biggest expenditure a business has (sometime it ranks first, if a small business has few employees). Email and the Internet are virtually (no pun intended) free by comparison. With communication so readily available in the form of iPads, smart phones, chat rooms, Skype, video conferencing, conference calls, etc., there’s really no reason you and your employees have to all be under one roof in order to get things done.

2) Send Your Travel Budget Packing

For a multitude of reasons (Hello, TSA!) business travel has lost its charm. Plus, it’s more expensive that ever to fly. Most airlines now charge for EVERYTHING from checked luggage to peanuts. I expect any day now they’re going to make us all step on a scale before we board and charge us to fly by the pound!

If your employees can drive to a business location, rather than fly, have them do it. But for business meetings, employee reviews, even sales calls that can’t be reached by car in a reasonable amount of time Skype is the way to go. As mentioned above, a Skype meeting is free, but just like a regular meeting you can still see your employees smiling faces (and you don’t have to spend a small fortune to do it). Plus, they still get to sleep in their own beds at night. It’s a win win situation.

3) Trade Extra Hours for Vacation Time

I used to work for a company where I had to fly out on Sundays to be at a customer’s site by Monday morning. Instead of paying me for my time, my boss gave me an extra vacation day. In a time where everyone is so busy no one can think straight, trading vacation days for extra work is sometimes equally (if not more) valuable to an employee. If you can’t afford to pay your employees for their vacation time, make sure they know it’s a “use it or lose it” situation.

Also, encouraging your people to take some time off makes for more rested and relaxed employees after they come back to work. Or they can choose to stockpile their extra vacation time in their sick leave bank. This is especially attractive to parents who may have to take time off to take care of sick kids.

4) Buy Used Equipment

With E-Bay, Craigslist, and online classifieds there is a plethora of options when it comes to buying stuff used. If you’re looking for something specific for your business anything from computers and printers, to ergonomic chairs can be found used online at places like UsedBusinessEquipment.com or UsedBizStuff.com.

If you’d rather touch and feel your used stuff before you buy it, resale shops, garage sales, and estate sales are greats place to hit when you need to furnish an office. True, you can’t be as picky as when you buy new (and most don’t come with guarantees), but wouldn’t you rather be more flexible about your business purchases if you could shave a few hundred (or thousand) dollars off the cost?

5) Cut Employee Hours

If you give employees the choice of reducing their hours versus a company-wide layoff (or closing the doors for good), which do you think they’d choose? However, be prepared to possibly lose employees if you cut back on their time too much, as they still have to make enough to earn a living. Also, if you provide benefits DON’T cut back on those just because you’re reducing work time. The idea behind this option is that it’s a temporary solution to a long-term problem. People don’t mind giving up one day a week of work, but they don’t want to give up health insurance.

Running a business (or a department) is never easy, but it’s even trickier in a bad economy. However, a company makeover can mean the difference between business as usual or becoming an overworked one-person show. And with all the other concerns a bad economy thrusts upon you, do you really want to have to figure out how you’re going to add more hours to your day?

Have you already given your business a makeover? If so, what are some of the things you’ve done to keep your doors open? We’d love for you to share your insight.