While financial benefits are not the be-all and end-all of motivating your staff, a well-designed bonus scheme can make a positive difference. However, timing is also important when giving them. Learn how by watching this video!
Having a bonus scheme in place motivates your team to do more and encourages their loyalty.
On the other hand, a poorly designed plan can have negative effects on employee behaviour.
Creating a Hot Bonus Scheme
You can base your bonus scheme on different criteria:
- Individual performance
- Team performance
- Overall business performance
- A combination of two or all
The bonus model should be realistic. It should also motivate them to perform better as well as improve the quality of their work and behaviour.
Another important thing to remember — it should include clearly defined rules when they will receive these bonuses.
If the time frames are not clear, it will confuse your employees. Worse, they will feel tricked. Transparency, on the other hand, eliminates employee distrust.
Triggers are additional points your employees need to meet before they receive the bonus. For example, if your company earned a certain amount of profits, they receive a certain percentage from it.
Bonus schemes can either be guaranteed or discretionary.
Guaranteed bonus schemes are included in the employment contract. You are obliged to pay these bonuses if the employee meets the targets indicated in the contract whether you gain or lose profits.
Discretionary bonuses are created if there’s a high level of trust between you and your team. They are given at will when your team has shown exceptional performance.