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A private music festival, an indoor golf course, personal financial advice, doughnut days, discount schemes and parenting classes are just some of the rewards being offered by forward-thinking, cost-conscious employers to keep their workers sweet.

One such employer is online hosting provider Peer 1, which offers a range of unusual rewards, from 'free food day' (the day before pay day) and 'beer o'clock' (at 4pm every Friday), to a Nintendo Wii for staff to play with when they need a break, and an indoor golf course at its new Southampton office.

Dominic Monkhouse, managing director at Peer 1, believes a positive company culture breeds excellent customer service, so the company's employee benefits strategy is based on making it a great place to work.

Monkhouse believes in giving employees the right to have a say about what goes on in the company, and hopes this involvement will boost morale and retention. He even offers new staff £1,000 to leave if they decide that Peer I isn't for them after all.

"The most important benefit we give employees is the power to change anything in the business they think should be done differently. Staff have a quota to suggest two business improvements per month, and if they cost less than £100, are encouraged to make the improvement," he says.

Perhaps most surprisingly, Monkhouse sees the recession as a plus when it comes to talent. "Recession is a perfect incubator for and motivator of talent. In a service-based business like ours, we sell the talent and commitment of our staff to customers," he says.

No employees have so far taken the £1,000 to leave, and the regular 'pow-wow' meetings encourage staff to air any grievances as well as sharing in the company's success.

Rewarding and fun

Employee feedback has been positive. "Peer 1 is more than just a job, it's a way of life," says James Batup, solutions specialist at the firm. "Every day is different and challenging, which makes getting up in the morning very easy. The people here make working life fun and, coupled with Peer 1 traditions such as beer o'clock, I don't believe I will work for a more rewarding and fun company."

Matthew Morris, UK sales operative at Peer 1, is also a big fan of the company rewards. "I would never have dreamed of taking £1,000 to leave, not after I learned I would get beer and doughnuts every Friday. The company makes a real effort to keep things lively in the office - I can't wait to get on the new golf course," he says.

Retailer John Lewis Partnership (JLP) is best known for its employee share scheme (the company profits are shared among staff each year), but the company also has a number of other interesting rewards. It runs a range of clubs for its 'partners' (employees) from photography and music, to sailing and fly fishing, and also offers a 50% discount on theatre, opera and concert tickets (up to a maximum of £60 per year) to all staff.

JLP has four holiday resort locations around the UK, where staff with at least one year's service can take a break at a subsidised rate. All employees who have been with the company for at least five years are entitled to take a three- to 12-month sabbatical. Staff are also entitled to apply for the 'Once in a Lifetime' holiday fund, where worthy applicants are rewarded with a holiday of a lifetime. To date, the fortunate few have enjoyed mountain biking across the Atlas Mountains, sailing in the British Virgin Islands, and playing football at the World Corporate Games.

But Chris Jones, a manager at JLP's charity secondment programme Golden Jubilee Trust, believes the trust is the retailer's most interesting reward.

The Golden Jubilee Trust offers about 50 secondments to staff each year on a full- or part-time basis for a maximum of six months. Staffare given the chance to provide practical help to a charity of their choice, and to learn new skills along the way.

Jones says: "It's a popular choice for partners, as they can try something that is completely different to their usual day jobs, while making a difference to a charity that is often very close to their hearts.

"Employees returning to work are more engaged in the business, which is reflected in their work performance. We also find that allowing partners to take a break from their role to do charity work, along with the other partnership benefits, has a very positive effect on staff retention."

Staff who have been on the charity secondment programme have clearly benefited from the experience.

Andrew Chigbo, a warehouse assistant at John Lewis Watford, spent two days a week for three months at Watford African and Caribbean Association.

Chigbo says: "Working there has helped me develop a range of skills, including the patience to work with different kinds of people and a better understanding of how to be a good team player."

TV company Sky has also jumped on the quirky benefits bandwagon, and staged a two-day music and entertainment festival for staff to thank them for their efforts during the downturn last year.

About 20,000 employees and family and friends attended Skyfest in July and September. The festival was a response to employee feedback about what sort of activity they would most enjoy.

Dev Raval, director of reward at Sky, says the show was essentially about entertaining staff and boosting Sky's employee reward package. "In a challenging marketplace, we continue to perform and we want our people to share in our success. Ultimately, it was a highly creative, hands-on way of securing employee engagement."

Shake your money-maker

Insurance giant Axa also recently introduced a new website to help employees manage their finances and lives better. 'My Budget Day' includes budget planning for families and those preparing for retirement, and a special 'confessions' board, where employees can own up to things they probably shouldn't have done, such as spending £250 on a pair of sunglasses or living off their girlfriends' salaries.

"My Budget Day was created to help address how to motivate employees to take control of their finances and to help to tackle apathy and create change in people's financial attitudes and behaviours," says Mark Kenyon, HR reward manager at Axa.

The insurance company also launched Pensions TV to help explain pension plan options to younger employees, and a new discount scheme which, Kenyon says, has generated a huge amount if interest.

"Employees have access to a huge range of external discounts, and since the launch more than 30% have registered on the site. Overall, more than 70% of our employees have logged on."

For the win

Nich Crowson, rewards and benefits specialist at HR consultancy Independent, says employers have really had to weigh up the value and cost of the benefits they offer.

"Organisations have had to work harder to ensure value for money for every pound spent. Even if employers negotiate the most advantageous group rates for a particular benefit, they still need to consider whether it is the best use of scarce resources."

Debby Hannaford, benefits consultant at HR services provider NorthgateArinso, says the recession has also triggered a significant increase in flexible benefit schemes that employees can opt in and out of.

With the tough economic conditions meaning people are working harder to make ends meet, as well as a significant proportion delaying retirement to stay in work longer, it seems some employers are rising to the challenge by offering a few enticing rewards along the way.