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Bonuses can be a great motivation tool, even for employees of the smallest business. They can also be a waste of money. How they are planned and administered makes the difference. Properly administered bonuses can reinforce behavior that will lead your company to success by rewarding people for making a specific contribution to the organization. Bonuses dolled out improperly will lead to disgruntled employees who expect a bonus, but who may not be happy with what they receive. | Human Resource Management HUMAN RESOURCE MANAGEMENT Bonuses How To Be Fair Bonuses can be a great motivation tool even for employees of the smallest business. They can also be a waste of money. How they are planned and administered makes the difference. Properly administered bonuses can reinforce behavior that will lead your company to success by rewarding people for making a specific contribution to the organization. Bonuses dolled out improperly will lead to disgruntled employees who expect a bonus but who may not be happy with what they receive. Set Goals To reap the most out of bonuses tie them to clearly-set goals. A good time to set these goals is at the beginning of the year. These goals should be concrete attainable and critical to the growth of your business. The steps below will help you set good bonus goals 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 goal. Involving employees in goalsetting will also do away with resentment that can come from the imposition of goals from senior management. Reevaluate goals frequently Do this at a minimum halfway through the year to insure that goals still make sense and that employees are on track. Big companies tend to have concrete goals but smaller companies let this information slide. Make goals specific and measurable Don t set goals such as Do a better job because a general goal does not instruct an employee in what steps to take. 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
