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Suitable Bonus Scheme

Simple Alliance, Kenya Limited


Purpose

Bonus schemes help you to show appreciation for your workers’ hard work and devotion and devotion. They could be awarded in different forms, such as:

  • As time-off 
  • Small or huge monetary tokens

Planning and Administration Dynamics

The usefulness of bonuses in your business depends on how you plan and administer these rewards to your employees. Basically, bonuses could constitute either of two phenomena, namely:

  • Useful motivators
  • Cash drain avenues

Bonuses as Motivators

If you suitably administer bonuses to employees who make positive contributions to your business, you can encourage your workers. This usually succeeds employee performance evaluation. At times, bonuses can help you to retain productive workers within your business.  The outcome is usually business success.  

Wasting Money through Bonuses

If you inappropriately administer bonuses, your workers who feel that they have been disenfranchised will be discontented. Proper employee evaluation could help avoid such a scenario.  In this case, your bonus money is simply wasted.  

Key Bonus Prerequisites

So as to make the best out of your bonus provisions, you need to contemplate and address  certain issues.  Major factors include:

  • Goal setting
  • Determining legitimacy
  • Establishing bonus amount
  • Proper award time
  • Identifying bonus recipients

Establishing Goals

Setting goals at the start of the business year will enable you to maximise on your bonus scheme.  Your goals need to be attainable, solid, and essential to your business.   

Goal Setting Essentials

Your bonus goals will be effective if you observe certain principles. These include:

  • Fully involving your workers
  • Setting achievable goals
  • Setting measurable and specific goals
  • Frequently reassessing your goals  
  • Connecting your goals to business success
Regular Goal Re-Evaluation

Frequent reassessment of your bonus goals helps you to achieve two ends:

  • It ensures that goals are still sensible
  • Determines if your workers are still pursuing goals
Complete Employee Involvement

You need to factor in the input of your workers while setting bonus goals. Usually, staff performance appraisal helps you to determine this input. This initiative serves two key purposes, namely:

  • It eliminates potential employee goal resentment if you impose goals on your workers
  • Employees provide a valuable information repository about the productivity and responsiveness potential of bonus goals 
Rendering your Goals Specific and Measurable

Ensure that your bonus goals are specific. This quality guides your workers’ direction. Avid generalised goals that are vague.

Setting Attainable Bonus Goals

Avoid potential worker demotivation or frustration by setting realistic bonus goals.

Relating Bonus Goals with Your Business’ Success

Identify your very critical success factors. Tie your bonus goals to the achievement of the crucial factors.    

Establishing Legitimacy

Carefully consider the merits and possible outcomes of planned bonuses. If they make business sense, administer them. Base bonus wards strictly on performance.  Avoid subjectivity. Clearly justify any bonuses you award. Explain that underperformance will deny your employees of bonuses in future. If bonus awards do not make business sense, cancel any bonus plans you have.

Establishing Bonus Amounts

Generally, you need to observe equity while awarding bonuses. Lack of equity could stir lawsuits and employee strife.  

Establishing Suitable Bonus Beneficiaries 

You need to point out personnel who have made important contributions to your business. Your bonus scheme needs to include the visible staff, such as salespersons, as well as the priceless behind the scene players such as clerical staff.   

Determining Suitable Bonus Time

Depending on the type of your business, you could offer bonuses at various times. Some examples of suitable bonus award times include: 

  • After a huge project ends
  • Expiry of business trading period
  • End of a busy season

Bonuses enable you to appreciate your productive employees’ dedication and industriousness. Before awarding them, you need to conduct employee performance evaluation. You could give monetary values or even time off as bonuses. Your bonus awards could be scheduled at the end of a huge job, the end of a busy season, or at the end of a trading period. Before awarding bonuses, you need to look at issues such as; Goal setting, Determining legitimacy, Establishing bonus amount, Proper award time, and identifying bonus recipients. Your bonuses are usually tied to goals. Employee evaluation is a key task during the process of developing a bonus scheme. Some considerations you need to make while setting bonus goals include; completely involving your workers, Setting achievable goals, Setting measurable and specific goals, Habitually reassessing your goals, and  Connecting your goals to business success.

Copyright (C) 2016, Simple Alliance Kenya Limited

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