Budget Constraints? 20 Alternative Ideas to Merit Pay Increases

Is your company budget too tight to give merit pay increases this year? Consider offering these 20 alternative ideas.



Tight budgets and high inflation rates have made it difficult for many employers to give annual merit pay increases. Although your organization may need to scale back, you can still make your employees feel appreciated by non-monetary means. 

With tight budgets in mind, here are 20 ways to make your employees feel appreciated without giving a merit increase this year. 

  1. Community/Service Memberships

    Provide employees with memberships to a gym, recreation center, streaming movie or audiobook service, wholesale store, legal or financial services, and/or community connections. 

  2. Training Opportunities

    Allow employees to take company-paid training courses that will add to their development.

  3. Education Reimbursement

    Encourage employees to obtain or finish their college degree by paying for education expenses. 

  4. Staff Lunch(es)

    Cater a meal or simply provide dessert for your “Wednesday Sack Lunch Days” to enhance the social glue of company mealtime. You can even take it one step further by signing up to order affordable meals with EveryPlate as an innovative employee perk. That way, you will help employees cut personal expenses while saving them valuable time.

  5. Student Loan Debt Assistance

    Provide a monthly student loan repayment benefit to help employees pay down their education debt. 

  6. Stipends or Gifts Cards

    Gift cards are a great way to give recognition to employees for their hard work. 

  7. New Office Equipment

    Providing new laptops, standing desks, or updated workspaces not only gives a much-needed improvement to efficiency and aesthetic appeal, but also helps with ergonomic needs

  8. Gift Baskets

    Rewarding staff members with dinner and a movie for two paid for by the company will win you points for both the employee and their plus one. 

  9. Work-From-Home Days

    If you don’t currently offer employees the opportunity to work remotely at least occasionally, adding this benefit may significantly increase their loyalty. 

  10. Flexible Working Hours

    Allowing employees to start and finish their days at flexible times, as well as clock in and out during the day to take care of personal needs, is a valuable benefit to employees. 
  11. More Paid Time Off (PTO)

    Although you may not be able to afford a pay increase, you may be able to add a paid day off (or two) to your employees’ annual PTO balances. 

  12. Half-Day PTO

    If your current PTO plan only allows employees to take time off in 8-hour increments, consider amending the plan to be taken in 4-hour chunks. 

  13. Meeting-Free Days

    Commit to at least one day a week where an entire workday is meeting-free. While this may sound counterintuitive, research from the University of Reading discovered meeting-free days significantly helped employees feel more valued, trusted, and engaged.  

  14. Summer Hours

    Consider offering a 4-day workweek or shorter workdays (where possible) during summer hours to reduce the amount of time spent in the office. 

  15. Relaxed Dress Code

    Allow employees to dress down once a week or whenever they’re not meeting with clients or working with customers. 

  16. Transportation Stipend

    Pay for an employee’s parking pass, express lane pass, or use of public transit. 

  17. Thank-You Card

    Whether or not money is tight, a heart-felt thank you from a manager or owner will go a long way in helping employees feel recognized and appreciated. 

  18. Employee-of-the-Month Program

    Implement this incentive to recognize an employee who has made a significant impact at work. Employees can nominate their peers and share the great things they have witnessed at work in their write-ups to be shared during the announcement. 

  19. Social Shout-Out

    Write a shout-out about an outstanding employee in a company- or department-wide email, or post on the company’s intranet or public social media platform about what great work an employee has done.  

  20. Onsite Services

    Provide monthly onsite services such as dry-cleaning, car washing or detailing, a massage therapist, and/or a healthy meal cart as added perks to your offerings. 

Before offering a new perk or starting a new benefits program, do your homework to find out what employees want. If you discover that employees are more motivated by money than gifts, benefits, or praise, implement a bonus program with specific parameters and give spot bonuses throughout the year.  

While offering competitive wages is important, having a strong workplace culture oftentimes overpowers earning higher salaries. For more information, please contact your certified HR expert. Not a current Stratus HR client? Book a free consultation and our team will contact you shortly. 

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