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How does a company keep its employees productive and happy?

I recently answered this question at the linkedin answers forum, thought it was worth reproducing here. I have some more ideas that will be forth coming.

1) Reward employees for what they know, not only for what you hired them. (yes, that is not a typo.)

2) Use your employees for what they know as well as what you hired them for. (see it all comes together. ;))

3) Allow employees to work from ...wherever. It saves you money and it saves them time...to make you more money.

4) Reward achievement on time as long as it is within project goals. ie. get rid of the time clocks.

5) Some people want to take a nap around lunch time, if you still have a physical office (I know some of you "older" businesses still do that kind of thing) provide a quite lounge precisely for this purpose.

6) If you are forced to lay off workers, offer them a reduced salary before you give em' the slip. It is the least you can do.

What are ways that you think companies can get the best out of their employees???

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