A good cause can have a good effect in the workplace, argues DAVID HARBOURNE, director of the Learning and Skills Council North Yorkshire.

How do you retain good staff? To state the obvious, a fair rate of pay is a good starting point.

However, a growing number of employers realise that pay and other direct benefits (holidays, pensions and so forth) are not the only way to motivate people and to make them feel good about working for you.

Many businesses now make it possible for their staff to give money or time to good causes. Surveys show that this makes a very positive difference to how staff feel about their employer.

That said, many employers are approached by dozens of good causes, all of them asking for help. It can be really hard to work out the best way to respond.

One way is to adopt a single good cause each year. Most employers who choose this option ask staff for suggestions, since they may already have strong links with a particular charity.

An alternative is to provide a range of options for payroll giving. This is a very tax-efficient way for people to give regular amounts of money to charity.

The first step is to agree a list of charities you are happy to support: the list can be as long or as short as you like.

Staff tell you which charity they want to support, and how much they would like to give each month. You deduct this amount from pre-tax pay, in other words, after calculating National Insurance Contributions, but before deducting Pay As You Earn tax.This way your employee gets tax relief immediately at their top rate of tax. You pay over all the money you deduct to an agency approved by the Inland Revenue and they pass the money to the charities nominated by your employees.

All modern payroll systems can handle Payroll Giving and there are no tax forms to complete, so it is really quite straightforward to operate.

I ought to add that employers can (if they wish) match the donations made by their employees.

This is an excellent way of demonstrating your commitment to the community and to build good relations with your employees. Any matched donations you make will be allowed as a deduction against your profits for tax purposes.

Alternatively, you could help staff donate their time, rather than money, to local community groups and projects. You can do this directly, or via the national Make A Difference Day campaign.

This is organised by Community Service Volunteers (CSV). This year's event will take place on October 30 and aims to build on the success of last year's event, when about 88,000 people gave a day of their time to good causes.

They say a change is as good as a rest, and one day away from work helping a local project could be a superb way to boost morale and team spirit.

Updated: 09:41 Tuesday, March 23, 2004