NFIB

Don't Let Employee Bonuses Become Ho-Hum
04/ 09/ 2002


Even the most generous types of employee motivation can become ineffective if they become commonplace and expected by employees. In today's Workshop, Jeffrey Moses explains how to avoid "underwhelming" your employees with perks.

The rule is that any perks or benefits, including even financial bonuses, that are given out regularly can become commonplace and routine. The effect among employees is that such benefits become expected, and therefore lose much of their ability to motivate.

For example, if a standard 5% employee bonus is given out every December (based on regular yearly salary), it can quickly become expected additional pay. In other words, it becomes ho-hum, and won't be motivating. In fact, if someone doesn't receive a standard bonus, they'll be disappointed, even angry.

Keep such bonuses motivating by basing them solely on performance. When an employee goes above and beyond the call of duty, consider giving them a bonus. If a salesperson has a record month, add a bonus to their paycheck. Don't give bonuses as a general rule -- use them only to reward truly worthy achievement.

Some performance-based rewards are not considered bonuses. For instance, your sales staff will be motivated throughout the year if they receive a higher percentage of compensation for increased levels of sales.

When a company has much better than expected quarterly results that can be attributed to the teamwork of the entire organization, a dividend can be given to all. This gives your ongoing support staff(non-sales) a chance to benefit as well.

Other types of tangible bonuses, such as those accompanying Employee-of-the-Month awards should be standard and available regularly to all employees. These types of bonuses are usually not large enough to cause significant jealousy among employees, all of whom may vote on monthly or yearly winners.

Whenever a bonus is given, or whenever an employee achieves sales or performance levels that lead to increased compensation, make sure that everyone in the company knows about it. Don't be shy about advertising your employee perks. Let everyone know that they, too, can achieve such benefits through dedication and hard work.

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