Although I was just having a little fun there, keep in mind that food=compensation. After a certain point, for most people, cash compensation is less important than other forms of compensation (like snacks and bottled water), which is nice since it's usually more feasible to buy cookies than give everyone a 3% raise. Of course, for some people, cash is all they care about. On the other hand, if your pay is below local equilibrium for the job market and profession, you have to jump through a lot more non-cash compensation elements to get anybody to work for you AND exert discretionary effort AND stick around.
The best way to keep morale up is to do things that build a sense of team or, better yet, community. Also, as necessary, train, discipline, and terminate line supervisors and managers who do not respect the dignity of their employees or who do not have as one of their chief concerns the success of every person in their charge.