It sounds like a no-brainer: pay your employees based on their performance. Provide merit-based pay raises, or incentivize your team with a bonus system for reaching short-term performance goals. Makes sense, right? Employees will go the extra mile for your firm, aiming for that raise or bonus. And those who don’t perform, well, they don’t see a bigger paycheck. The money your firm saves by not doling out raises to underperforming team members will fund the merit-based pay raise or bonus system for your rockstar employees.

But as logical as that all sounds, unfortunately, business just don’t work like that.

In a recent Willis Towers Watson poll, only 32% of managers feel their payroll programs are “effective at differentiating pay based on individual performance.” Only 50% believe that financial incentives impact how well their team members perform. And only 20% agree that a merit-based pay raise system drives a higher level of performance at their firms or companies.

Yet, firms continue to throw money at these highly ineffective, highly disappointing programs.

So, why do they fail? Well, firm leadership has a hard time saying no when an underperforming employee asks for a raise. This swallows up cash, which, in turn, takes money away from the pool of money set aside for the employees who are truly earning their bonus. And top performing people, well, they don’t really love working their tails off for a skimpy payout.

What should your firm do instead? Start by recognizing the fact that money is not a primary motivational factor for most employees. Rather, employees want to be recognized for their hard work, thanked with flexible work time, and offered opportunities for growth and advancement. And none of that negatively impacts your budget. But we can promise it’ll positively impact your bottom line.

Here are 10 ways to motivate your employees—without implementing an ineffective merit-based pay program:

1. Empower your employees: Give them control and allow them to make decisions that impact their professional world, even if that decision is something as simple as choosing the topic for the next weekly team meeting. Offer continuous training and development, so they have the chance to master their field, or learn a new area of business.

2. Recognize hard work: Offer sincere and specific praise, whether that be a shout out at your next team meeting, or a simple thank you note. Be sure to mention specific metrics…

3. Turn your team into a community: Your people need to feel connected to your business; that they have a purpose and make a difference. But arguably as important is making sure your team members feel connected to each other. Engage in team-building activities—company outings, playing games on a break, etc.

4. Ask your employees for input: How do they want to be incentivized? What motivates them? Just ask!

5. Show genuine interest in your people: As a leader, you don’t want to be best friends with your team, but getting to know them on a personal level shows them that you take genuine interest in them…in turn, they won’t want to let you down.

6. Reward your team with flexibility: More than money, employees are motivated to earn additional time off, or time to work from home. It enables them to maintain a healthy work-life balance, which reduces stress and gives them a chance to work when they’re at their most productive.

7. Stay in touch: 24/7 communication is overwhelming, sure, but staying in touch via email and text allows you to step in and offer guidance when it is needed, rather than after the fact. That gives your employee a chance to succeed out of the gates, rather than bomb…but learn a lesson post-failure.

8. Don’t underestimate employee perks: The parking spot right by the front entrance of your firm, a longer lunch break, time to work on a personal project—these kinds of perks can result in higher job satisfaction, which will impact productivity and your bottom line!

9. Volunteer with your team: Yeah, it’s great for PR. But it’s even better for building your team and increasing loyalty. Let your employees have a say when deciding where or how to make a difference in your community. Firms with strong community involvement and philanthropic programs are better able to attract and retain top employees, just saying.

10. Offer training and development: Many of our clients take advantage of our Team Empowerment Program, which is a virtual employee training and development program with weekly master classes, as well as over 200 tools and techniques to help advance the breadth of an individual’s professional skill set. Perfect for leaders and employees alike, programs like this benefit your firm in two ways: the skills your team members learn will benefit you firm and your employees will feel engaged and empowered.

Most small law firms don’t have the budget for a big bonus or incentive program, and that’s not a bad thing since those programs are mostly ineffective anyway! Motivating your employees with these not-budget-breaking tactics will undoubtedly improve your bottom line and ensure your firm’s performance continues to improve over the years.