Bah Humbug!
Will you be an Ebenezer Scrooge this year? As Christmas approaches you may be considering giving a little something extra to your employees. Perhaps you’ve considered a seasonal bonus for your workers or already have something in place, but how much thought was put into it when it was setup? Can you afford it and will help to incentivise workers like it should? We’re taking a look at what checks you can do to make sure a seasonal bonus scheme is right for your company and how to not make your employees feel like they work for Scrooge and Marley.
Should you do it?
The purpose of such a scheme is to thank workers for all the work they have completed and to incentivise any future work they will do. However, for the worth of the bonus you are giving, do your employees know what you expect from them in return.
You also need to consider how much you are offering. Will the total of the bonus make employees feel worthwhile and spur them on to do better? Or will they not be impressed by the amount and become disengaged from their work and possibly go on to search for employment elsewhere with better reward prospects?
You need to plan how much your employees work is worth over the year and maybe see what others in your sector offer as bonuses to compare.
Can you afford it?
Before you consider a bonus scheme you need to make sure it is something you can afford to keep running long-term. You should also decide whether there are any criteria by which workers will need to perform to in order for them to receive the bonus.
Check and double check
When implementing a bonus scheme many businesses use metrics to decide whether a bonus should be due to a worker. Sometimes these metrics can be mistakenly or intentionally incorrect. Frauds can occur in any business, large or small and can stem from any department. Ensure all your company’s bonus metrics have rigorous controls so as to route out any possible issues before they occur.
Don’t break your promises
If you have decided to set up a bonus scheme you are making a promise that your employees will be rewarded for their work if it meets a certain standard. Once this arrangement has been made it would be detrimental if you were to back track and not follow through with your promises. It makes you look bad as an employer and could cause many staff to become unhappy to remain in your workforce. Make sure you know what you are getting yourself in for before any promises are made.
Make it successful
The purpose of a bonus scheme is to encourage employees and drive performance, however many bonus schemes fail due to staff not understanding how their actions can influence the bigger picture. When you implement a bonus scheme make sure you fully explain what that means to your employees. What metrics will the bonus be based on? How can it help performance? What is the long-term goal?
Final words
If your company is doing really well and you have had a successful year, then it is great to share this with employees. A bonus scheme that is set up well, taking all the previous mentioned points into consideration, can be a great incentive for your workers and hopefully encourage further workplace success as well as help with the personal development of your staff.
However, if you get it wrong it could end up doing the opposite and have a negative effect on your business. Before you launch a scheme, it is wise to assess how well it works by testing it in different scenarios and fixing all those bugs before any mention of it to your employees.
If you would like any advice on setting up a bonus scheme in your workplace then contact us for more information.