How well is your company doing at fairly handling the employee bonus and incentive program? To help you figure out that answer, first ask yourself this question: Do you have a way of tracking the perks you hand out to employees so that you know you are doing this well? If your company chooses to use bonuses as part of a compensation program, but you are not effectively managing this with data, you could be missing the mark.
Treating all employees with equitable bonus programs is a concept that makes sense, especially when it comes to a compensation strategy. After all, compensation and performance are intricately linked.
How Employee Bonus Programs Should Work
When employees know they are valued by the organization where they spend a great deal of their week, this makes for a positive work environment. Cash bonuses are just one of many ways to demonstrate appreciation to employees. Other incentives can be thrown in depending on the nature of the performance or the difficulty of reaching certain company objectives. It’s a win-win when things go well.
When Bonus Programs Go Terribly Wrong
However, if employees get one whiff that they are missing out on potential bonuses because of favoritism or poorly managed incentive programs, any organization could be headed for major trouble. Why? Because the employees who do not see your compensation program as fair are probably already searching for another job.
Therefore, consider that unfairly treated employees will be doing just the bare minimum to get by until a better opportunity comes along. Sometimes, in their misguided frustration with your company’s bonus program, they will even seek out ways to sabotage other employees and eventually, the company success. This is not the scenario you want.
5 Ways to Boost Your Bonus Program and See Increased Performance
Fortunately, there are some ways to make bonus programs and other incentives fair for all employees, so that your organization gets the intended results.
- Bonuses must be attainable at all levels.
When putting together any potential bonus program for employees, consider that there are many skillsets and abilities present in your company. Additionally, there are bound to be limitless ways that employees achieve goals for their respective job types. Make your bonus program attainable and something that employees can work towards. Avoid making them too difficult otherwise employees will not see them as fair from the get-go.
- Make Incentives connect with performance.
If bonuses are going to become a motivating factor for your performance numbers, then employees should be able to see a clear connection between the work they do and the ability to earn more money. While some workforce surveys indicate that employees are driven by many non-salary factors in the workplace, if they can visualize getting a big fat bonus in their paycheck this can be a powerful way to engage them.
- All bonuses should be tracked carefully.
Having a system for tracking bonuses is especially important when designing incentive programs that are fair. It can be easy for any executive team to give bonuses to the same top performing employees year after year, forgetting the “little guy”. Make it a point to add a section to your payroll and performance management software that includes a bonus tracking report. Use this to regularly check to see who has received bonuses and who has not. Work with managers to ensure everyone knows about the bonus plan and has a fair shot at it.
- Include alternative perks and incentives.
Outside of cash bonuses, you’ve got many alternative choices that are known to be effective and fair motivators. For example, one of the top incentives that employees appreciate includes flexible scheduling, which allows them more work life balance. Other ideas for boosting employee morale and productivity include wellness programs at work, support for educational goals, merit raises, and workplace leadership programs that lead to career progression.
- Communicate bonus programs clearly.
Remember that your bonus programs should be communicated to all employees on a regular basis, and not just at performance review time. Instead, make this a part of your employee onboarding, have a written version in your employee handbooks, talk about bonus opportunities during staff meetings, and whenever someone does a good job. Reward employees on the spot for their achievements, and hand out well-deserved bonuses on front of peers. All of these things can help more employees to get on board and earn those extra incentives.
Use the above pointers to create employee bonus and incentive plans that are fair and square for all your team members.