There's a dirty little secret in the world of men and women who dedicate themselves to improving government management: Hardly anything makes their work seem less necessary than a booming economy. Why bother with excruciatingly detailed prioritization of programs when you can afford almost anything that the state legislature wants to buy. Rainy day funds? Who needs them when the sun is shining. Some years ago, we indicated that we thought California's financial management left something to be desired. State leaders seemed to think we had lost our grip. This was back when the nickname "The Golden State" really fit, and the idea that California should be functioning more efficiently seemed like telling Bill Gates that he should be using the lower-priced spread.

Of course, nobody would wish for the hard current economic times that are currently besetting the nation's states and localities (except, maybe, for tax evaders who may well enjoy the cutbacks in state revenue-collection offices). But the current travails certainly put the spotlight on good management and innovative practices.

This is particularly true in the area of human resources. Cities, counties and states are in the unenviable position of trying to retain and reward good performers--without being able to give them raises or bonuses. "When an employee is sitting in a state office and has a very low change of rate in salary, it's very easy to feel unappreciated," says Ron Penney, chair of the Department of Public Administration at North Carolina Central University and formerly director of the state office of personnel. "Still, it's incumbent upon the employer, no matter what the economic times, to attract and retain competent employees, and the way to do that is to express your appreciation in whatever manner you're able to do so."

How do you do that? Some of the means used sound almost hackneyed, but there's a lot of anecdotal evidence that they genuinely work.

In Delaware, for instance, some people who work in the state capital of Dover have to park quite a ways from their office. So, some agencies give the employee of the quarter a designated parking spot right by the door. Everyone knows superior performance earned the privilege. Another thing that costs almost no money, says Dana Jefferson, Delaware's deputy state personnel director, is a weekly report the personnel department does that lets the governor know about employees who go above and beyond the call of duty. Then, at an awards ceremony, the kudos that were sent to the governor are presented in front of all the employees' peers.

Steven W. Hayes, a professor of public administration at the University of South Carolina, has been studying incentives for social service workers. These folks tend to be underpaid even in the best of times, and their jobs get even more difficult when times are hard. "Social workers in a lot of counties in North Carolina were fearful because they were isolated," he told us. "And these counties have so little money. So, they gave them cell phones to keep in touch and handheld computers so they can keep their schedules more organized. These don't sound like significant moves. But they don't cost much, and they are major emoluments to the job."

Maricopa County, Arizona, authorizes on-the-spot bonuses for social workers who, for example, come in on the weekend to help a family in distress. The amounts aren't huge, but Hayes points out that even if it's a trivial amount of money, it has a far greater symbolic value.

That's the whole point of non-cash incentives: their symbolic value. But a government can go too far. We know that Omar Khayam was writing of more high-flown things when he advised readers to "take the cash in hand and waive the rest," but it's a principle that would certainly resonate with most public-sector employees. While there's probably no such thing as too much money, overuse of incentives just dilutes their utility. We have a relative who works in the private sector and has received so many Lucite "worker of the year" awards that she uses them as door stops. Not only have they become ineffective as incentives, they are just an annoying reminder that she's not being sufficiently paid, even though she's told she's the best.

With that in mind, Sally Selden, associate professor of management at Lynchburg College recommends that localities in need of good incentives look to make them as tangible as possible--even if they're not hard dollars.

Flexible schedules are one example. "They're terrific," Selden told us. Here's one reason why: People put a high value on the ability to work out of their homes.

Selden also suggests investing in training. This can be a lot less expensive than a pay raise--a training seminar might cost something like $160--but it still gives the employee something of real value. And people, she points out, are most motivated when they're in a learning curve.