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Winning Tips for Holiday Season Bonuses
Holiday bonuses can be a great motivation tool, even for employees of the smallest business. But how they are planned and administered impacts how successful they will be.
Used right, bonuses can reinforce behavior that will lead your company to success by rewarding people for making specific contributions to the organization. Without planning, bonuses can lead to disgruntled employees who expect a bonus and may not be happy with what they receive. Use the tips below to make the most of the bonuses you give this season.
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Tie bonuses to goals
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To reap the most out of bonuses, clearly align them with company, or better yet, employee goals. A good time to set these goals is at the beginning of the year. If you did not set goals with employees this year and still want to give bonuses, you can tie performance and employee contribution to recognized company goals. For next year, use the following steps to establish goals in January.
- Set goals with employees — Employees are often the best source for information about what job-specific goals will contribute to overall increased productivity, responsiveness, or other business goals. Involving employees in goal-setting will also do away with resentment that can come from the imposition of goals from senior management.
- Reward specific and measurable goals — An example of a constructive goal is "Increase response time to customer calls by one-third" or "Cut customer complaints by 50%."
- Set goals that tie employees into the success of your company — Don't automatically assume that bonuses should be tied to increased sales or even profitability. For example, it may be most important in a given year for your business to cut costs or raise visibility. Tie bonuses into that critical goal rather than one that is traditional.
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Determine if you can afford to give bonuses
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Economic climate and your overall business status can impact whether or not you give bonuses. Make this decision early in the holiday season and communicate your decision to employees. Managing employee expectations regarding bonuses is important to maintaining a good atmosphere in your company. If hard times prevent you from providing bonuses, make sure employees understand the circumstances and are confident you are taking steps to improve things for next year.
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Choose bonus amounts carefully
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There are no hard and fast rules for setting bonus amounts except that you should make bonuses equitable among peer groups and always have performance justification. Employees will discuss bonuses, and paying inequitably will generate strife or even discrimination lawsuits.
When you deliver bonuses, be sure you explain the reasons for them. These should be non-subjective, measurable, and performance-oriented. Make it clear that a bonus is an extra that may not always be available. As nicely as possible, drive home the fact that you are rewarding them for this year's accomplishments and that bonuses are available based on the company's performance this year only.
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Acknowledge all staff
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When you are doling out bonuses, don't forget the behind-the-scenes people who have made the big orders, the successful client presentations, and the travel possible. Clerical staff is instrumental in making all other functions of the company operate smoothly. Reward them for it.
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Click here to return to the Holiday Center
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