Even in Tough Times, Keep Workers Happy

Small businesses often can't afford to make such concessions. They're being forced to cut back on health care or discontinue coverage completely. And forget raises. Giving workers even cost-of-living increases is a no-go for many owners.

So how do you keep employees motivated when times are tight? The good news is that it doesn't take big bucks, Cartwright says.

"A big piece of the puzzle is recognition," he says. "Walk the floors and show an interest in the people who work there. Say 'thank you' for a job well done."

When it comes to more tangible perks, use gift or gas cards as spot rewards for those who make an extra effort or exceed expectations. Rewards that promote time with family or friends are more meaningful, Cartwright says. "Tell them to take the afternoon off and give them a gift card for free pizza," he suggests. "For someone working for $14 or $15 an hour, getting a $50 restaurant card is a big chunk of change."

Time off is another low-cost incentive. Because small businesses tend to be more flexible, giving workers an afternoon or day off can be done informally as a reward for reaching goals or putting in extra time on a project.

Employee recognition isn't just about feeling warm and fuzzy. It may be the key to surviving the current economy. Trim costs all you want, but customers will stay away if they see sagging morale and a staff that has mentally checked out. A thriving team environment can be what sets your company apart.