Team-building exercises are used as way to get employees to stick around. Often, though, they consist of co-workers grudgingly playing group games.

But the efforts may be a more natural fit at small companies than at larger ones, where they may feel forced.

"It's hard to institutionalize team activity," says Ann Feyerherm, an associate professor of organization and management at Pepperdine University in Los Angeles. Relationships may be easier to form at smaller organizations, so team building may be a "more appropriate" employee-retention tactic for them, she says.

Here's a look at three small companies that use team-building activities to bring their work forces closer together -- and keep them wanting to stay around.

Treasure Hunt

Most of the 17 employees at New York ad-sales company Mongoose Atlantic Inc. are recent college graduates. It's an energetic bunch who stays around for two years on average to get experience in sales.

As an incentive for hitting sales targets, the company rewards its sales force with group activities, usually with a competitive element, says Vice President Steve Channon. "It helps ease them into the work force if they can socialize with co-workers," he says. For recent graduates inclined to hop jobs, "if they have friends here, they'll stay longer."

One recent activity was a scavenger hunt in New York's Greenwich Village, organized by City Hunt LLC, a team building and adventure company. Teams that mixed employees from different work groups combed the streets for four hours, looking for clues, such as a commemorative wall plaque, and following instructions like photographing the team all wearing sunglasses. Winners earned T-shirts and a free round of drinks.

The hunt costs around $100 per person, and Mr. Channon says he measures the activities' success partly by how much people talk about them afterward. "When they're back in the workplace," he says, having worked together in a more social way "allows people to communicate better in stressful situations," and can help make staff more loyal to one another.

Derby-Car Race

Paul Kolada, principal and owner of Priority Designs, tried to foster a social environment at the Columbus, Ohio, industrial-design firm with picnics and trips to state parks. But an annual derby-car race that the company entered on a whim four years ago at a conference has brought its 50 employees closer together than any summer outing ever could.

Entrants compete to build the fastest car based on size and weight requirements. A recent race, for instance, required cars to weigh less than five pounds. Employees begin designing the cars weeks before the race, when organizers release that year's criteria.

"There's an incredible fire and spark when you're doing something" for a cause other than routine business, Mr. Kolada says. The event, held by the Industrial Designers Society of America, has become a showcase for the firm, which has clocked first, second and third-place finishes.

For Priority Designs engineers, the race became an opportunity to prove that they can hold their own against bigger, better-known companies. The company installed a racetrack in the office, and employees stay late into the night, making design changes on the cars, which may be built of materials from plywood to carbon fiber. (See highlights of Priority Designs' derby-car competition)

While constructing a car may cost as much as $10,000, including engineers' lost billable time, the morale boost, Mr. Kolada says, is worth it. "When we go into employee reviews, people will say it's so important."

Balloons and Baseball

Once a year, every employee at recruiting and staffing firm The LaSalle Network has a party thrown in his or her honor. It's not a birthday party -- it's a "re-birthday" party, with balloons and a gift, on the anniversary of the employee's hire date.

These parties are just some of the 75-employee company's social activities. The Chicago company also sponsors after-work happy hours a few times a month and periodic outings to ballgames and concerts. Two or three times a year, a guitarist visits the office, and employees gather around to listen.

Chief Executive Officer Tom Gimbel says hanging out with his staff helps create an environment where employees feel they're "a part of something bigger than" themselves. Besides, he adds, with an average age of 29, the young employees appreciate the social atmosphere.

That's partly why employees stay an average of 3&frac12; years, despite an intense, sales-driven environment, he says.

Mr. Gimbel makes an effort to interact with staff during work hours as well. "I'll pull up a chair next to a staff-level person's chair and ask what's going on," he says. "Balloons and gifts and guitar players aren't worth anything if people don't think they're working for someone who cares."

Write to Simona Covel at