In the hilarious climax of the holiday classic, Christmas Vacation, Clark Griswold finally receives his long-anticipated Christmas bonus. The whole extended family eagerly awaits his report of a large cash bonus. The deflated Clark realizes his swimming pool dreams are shot when he gets a one-year subscription to the Jelly of the Month Club. To which, a thrilled Cousin Eddie replies, “Clark, that’s the gift that keeps on giving the whole year.”
Have you ever felt like Clark when you received a bonus? How about like Cousin Eddie? There have been times in my career when I could relate to the way each of them felt. Why was I so disappointed about the $3,000 cash bonus, and so excited about the $40 jacket?
With a lot of research and hands on experience I have come up with some tips to share what’s in a bonus program? Book A Demo
What are the factors that control how your team members feel about their bonus?
What’s In a Bonus Program
- Aligned expectations
Your team members need to know what they need to do in order to earn bonus. They need to know the criteria, the amount, and the timing. If they don’t know what they need to do, they’re not going to be motivated to do it.
- Individual control
Your team members should have some control over the amount of their bonus. They should be able to earn more by working harder, taking on more responsibility, or achieving more. If they don’t have any control over their bonus, they’re not going to be motivated to do anything more than the bare minimum.
Your team members should know how their bonus is calculated. They should know what factors are considered and how much weight is given to each factor. If they don’t understand how their bonus is calculated, they’re not going to trust the system and they won’t be motivated to earn a bonus.
If you can align your bonus program with these factors, you’ll be well on your way to creating a bonus program that will motivate your employees.
Maj. Gen. Michael Williams of the Marine Corps. said: “Leadership is the art of having people do what you want them to do and go in a direction that you set, willingly or unwillingly. Willingly is leadership. Unwillingly is coercion.”
Here are some additional tips for designing a successful bonus program:
- Make sure the bonus program is fair and equitable. Everyone should have an equal opportunity to earn a bonus. This means that the bonus program should be based on objective criteria, such as performance or results. It should not be based on subjective factors, such as personal relationships or favoritism.
- Make sure the bonus program is transparent. Employees should know what they need to do to earn a bonus. They should also know how much the bonus will be and when it will be paid out. Transparency will help to build trust and motivation among your employees. One of Dave Ramsey’s frequently used quotes is “To be unclear is to be unkind.” We love having ourlinQ’s live dashboard that gives up to date information on where your bonus is.
- Review and update the bonus program regularly. Your bonus program should be a living document that you can review and update on a regular basis. As your business grows and changes, so too may your needs. By reviewing and updating your bonus program regularly, you can ensure that it’s still meeting your needs and helping you to achieve your goals.
- Proactively Manage Projects this emphasizes taking action before problems arise. If you are involved in your teams projects you can prevent disasters from happening. This also helps create a place to celebrate successes. When you know what is going on, you can also see the positive!
- Teach your team how to think like an owner. Why is it important for a team member to feel like they are in control of how big their bonus could be? Ownership. Imagine what you can accomplish if your team members are all thinking like owners. You can read more about building a culture around thinking like an owner here. Work harder, take a bigger role, win a project, or make more profit on your projects and you will receive a larger bonus. When your team members know that their efforts control the bonus amount, they are much more likely to do the hard things.
By breaking down all of these tips you now know ‘ What’s in a bonus program ’ and, you can create a bonus program that will benefit your business and your employees.