Should You Pay Bonuses? How Much and to Whom?
An employee bonus can be a motivating factor for any employee and is an excellent way to boost performance, build loyalty in employees, and motivate employees to reach goals. However, if handed out incorrectly, a bonus can be ineffective in regards to motivation as well as a waste of money for employers.
When Should You Pay Bonuses?
Some of the reasons for giving bonuses to employees include:
When bonuses are used as rewards for superior performance, both the employee and the employer benefit.
How Much Should I Pay?
In addition, it's important to remember that not all bonuses need to be monetary, nor do they need to be a percentage. For example, a $200 bonus per quarter to all employees who consistently show up for work on time, can still be motivating without breaking the bank.
Sometimes, bonuses can be other things, like gift certificates to restaurants or shopping malls in amounts of $50 or less.
Bonuses can also come in the form of rewards from things such as Employee of the Month or Most Improved Salesman of the Month. The bonuses for these should not be so big that they will cause jealousy and discourage others from voting, but they should be big enough that all employees will want to strive to win. Remember, they need not be monetary - it can be an extra day off or a television set or an iPod. Be creative when deciding what bonuses or rewards are, but make sure they're something worth working towards.
Who Should I Give Bonuses To?
As a general rule, bonuses can be very effective when used correctly - as rewards to employees who have gone above and beyond the call of duty.