I just finished posting an article in the Human Resources - Best practices area on this topic and thought I'd add my two cents with another 'Tale from the Trenches'.

Business managers and owners usually roll their eyes when they come across this topic for the first time -- they get salary and wages, overtime, and the standard drug, dental, and pension plans but can't connect with the value of some of the more unusual benefits they hear about.  I usually share this little story in the course of the discussion.

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I once stepped into an HR role in an established organization with 42% voluntary turnover -- whole departments with no one who had been there a year!  To the managers this seemed normal and they weren't particularly concerned about it.  The HR Department was dedicating approximately 70% of its time to recruiting and related activities.  For this organization it meant lower customer service levels, more rework, lower productivity.  It also translated into direct recruiting and training costs in the millions of dollars which I very carefully calculated and presented to the CEO.

We turned that around through a variety of changes -- better recruiting practices, a formal compensation system, better employee communication, better supervisory training, and equally important -- a whole range of small employee perqs and benefits that didn't cost much but were appreciated by employees out of all proportion to their expense.  I sometimes refer to this as the 'compensation multiplier factor' -- when the employee perceives the 'value' to be greater than the actual cost.

I found the best perqs were the ones that either saved employees time, or ones that were entertaining. 

- We turned an underused storage room into a exercise room.  We hired employees to teach yoga and other fitness classes.  Employees saved time going to the gym and we all had some fun together!

- On-site dry cleaning pickup, haircuts, and massage therapy -- facilitating anything that employees routinely have to do during their lunch hours or after work are huge time savers.  Practical approaches to helping employees with their work/life balance.

- Occasionally, we had staff give a talk on a projects and initiatives they were working on.  An opportunity for employees to share exciting things they were working on and surprisingly well attended -- employees like to be able to connect the dots between what they do and what others are doing in the organization.

- Tickets to sporting and entertainment events.  We also had a Skybox at the Skydome and made that available to employees when it wasn't being used for sales functions.  If your company has a nice airy room consider offering it to employees to use for kids birthday parties.

- We had some quilters and craft people in the company.  We provided them with a room, a budget for materials, and a storage spot for works in progress.

None of these are 'big things' -- they don't cost much, they help create a sense of community, and provide employees with a chance to shine. 

End results - turnover dropped to just 12% -- multi-million dollar saving (every year) and improved operational performance - a ROI out of all proportion to the cost of the Human Resource Management costs involved!

Remember the role of HRM is to attract, retain, and motivate employees -- these unusual benefits have an impact out of all proportion to their cost in achieving these objectives (and they're kinda fun for us too!).