In a new or smaller company the employees you have are often very important to keeping business continuity and growing the business. This article isn't about recruiting. This article is about keeping employees around that you have in the company and you want to stick around.
Here is the most critical point to keep in mind. Each person is motivated and focused on different things they value in their job. Those motivators are different for each person and can change over time. I find when I am coming into a new company and I am taking over the management of existing employees I have three fundamental areas on personal motivation I want to learn about. Usually I ask, "In three years what are your personal goals, professional goals and financial goals in regards to working at XYZ Inc.?"
I try to use three years as a time frame because it's far enough out that many things are changeable by design for an employee without having to rush or force the changes and it's not too far out that people find it fanciful thinking. In three years an employee can take a 3 month sabbatical to travel the world, or earn a specialty degree, or get into a role within the company that can double their earnings. It's not to say that it will take three years. For some goals it can be immediate or shorter term but in general three years is more than enough for almost any realistic goal.
I have found that by discussing personal, professional and compensation goals as one larger conversation you can pretty much hit anything that motivates an individual in staying with a company. Everyone is motivated differently. Some people want to make more money every year but many others are motivated by working in teams, helping to set goals, being knowledge experts, working from home one day a week, challenging their skills, having set work hours, having work hour flexibility, etc. Too many owners and managers at companies feel everyone thinks the way they do about work. That is so far from reality so be careful. You should assume you have no idea why an employee continues to work for you until you've asked.
Also realize that the lives of people can change quite a bit over a three year period so it's worth asking the three year goals question every year. A person single who gets married may find that getting home at a reasonable hour at night is important when before it didn't matter much. A person who has children can find that work hour flexibility or affordable health care now takes the lead as most important items and goals.
I find it interesting how many times employees have really never thought of three year goals for themselves. In particular they often have not thought about personal goals as relates to work. I recommend you give people a heads up in advance and give them the basic three year goal question you want to discuss and even give some examples of things people consider.
If you hit on three year goals for employees that covers all the various areas of their lives you can work with your organization to find the right opportunities to match those goals. If you can meet their goals then you'll go a long way in increasing employee satisfaction and creating an environment where people feel they can be themselves and fit in. You might also save money but not trying to motivate people with raises, bonuses or stock options. If they aren't a principle motivator then you're wasting those resources where they have the least value to the employees.
Have the conversation, make it casual and figure out their goals. You'll be better off for doing it.