Bonuses can be an effective motivational tool that reinforces positive behaviour and achievements. However, bonuses can waste money and even be counterproductive if not implemented correctly, so it is important to understand the most effective ways to administer bonuses in your business.
Making your bonus strategy a success
Bonuses should never be a foregone conclusion, they should always be related to personal achievement or company performance. If you want to reward your staff, think carefully about how much you are prepared to give and how you want to go about distributing bonus payments.
Set clear goals
This is best done at the start of the year. Share individual and company-wide aims with your employees and explain what you expect from them if they are to receive a bonus. These goals should be attainable and clearly related to the growth of your business. Goal setting will help employees to feel more involved and motivated.
Communicate well
Make sure workers know whether they are meeting the targets you have set at regular intervals through the bonus period. This should prevent any shocks when bonus day comes around and help to keep staff motivated at all times. Advise on any improvements that need to be made well in advance so that employees have time to make the necessary changes.
Manage expectations
Give workers a rough idea of what they can expect from a bonus; whether it be £50 or £5,000. If each employee is getting a different amount, make sure to explain how you arrived at the amount for each staff member. Be wary of announcing expected bonuses too early as this can cause severe disappointment if the final bonuses paid do not match your predictions.
Hand them out in person
By presenting bonuses in person, you can congratulate your employees on targets reached or achievements made. Use this opportunity to reassure them of their value to your company and your hopes that they will continue to support its success.
Re-evaluate your bonus strategy
Just because you give out bonuses once, you don’t necessarily have to do so again. Consider whether the increase in motivation and productivity among your employees was sufficient to offset the additional cost to your business before deciding whether to implement regular bonuses.
Processing your bonus payments
Once you have decided how much to award each of your workers, you will need to administer this through the payroll. If you are unsure how to do this, then you should consider outsourcing to a payroll specialist. Cintra Payroll Services provides tailored outsourced payroll services, ensuring all wage and bonus payments are delivered accurately and on time.