Do you have fond memories of working for a company that provide you with a bonus package or a bonus check at holiday or review time? Do you feel that bonus packages will incentivize your employees? In many cases a bonus plan can backfire on the company if it’s not done with planning and forethought.
What should you consider when contemplating a bonus plan? Here are my thoughts:
- What is the objective of the bonus compensation? Is it a profit sharing? Something anticipated for a “job well done” or “X number of new clients or dollars brought in”? If your bonuses are tied in with revenue growth or bottom line profits, then bot you and the employee win.
- Do you want to provide a bonus based on enhance efficiencies within the company? Do you have a plan in place for reducing the cost of overhead or manufacturing line items? Can you put metrics with that and tie it into a bonus plan?
- Do you reward employees for innovative ideas? Is it a set amount per idea? An amount if the idea is implemented with success?
- Acknowledging employees for stellar customer service should be part of your business plan. Customers are the lifeblood of any business and if you have an employee that nurtures clients, that should be rewarded.
The type of bonus plan you implement is as unique as the company that you oversee. However, letting your employees know that if they go “above and beyond” and that there could be additional compensation because of it maybe a great motivator for your team.
Do you have a bonus plan? Is it working?