Employee Bonus Schemes: Rewards Strategy
EMPLOYEE BONUS SCHEMES - REWARDS STRATEGY
There are various types of bonus plans that can be put into effect at your business. Bonus schemes and employee rewards strategies are established to fulfil a number of key business and HR objectives:
• To improve business performance (e.g. productivity, sales or profits)
• To focus employees’ efforts on key objectives such as customer service, quality and on-time delivery
• To increase employee motivation by establishing a clear link between pay and performance (at an individual or team level).
• To support stakeholder ideals by allowing employees to share in the success of the business
• To encourage change within the organisation.
• To create the desired workplace culture by, e.g. rewarding teamwork and good attendance.
Trends in Bonus Scheme Design
Many companies are extending their bonus schemes to cover a wider range of factors, reflecting a broader set of business objectives. This can help avoid the potentially distorting effect of focusing too much on a single measure. In addition to financial and output considerations, bonus schemes increasingly take into account factors such as attendance, customer service, quality, safety, team and individual performance or various HR-related measures. However, some companies operate successful schemes that focus on one particular key objective – most often profits or productivity.
Tying bonuses to multiple business objectives can be achieved in different ways. Perhaps the most straightforward approach is to operate a range of bonus schemes providing appropriate incentives for different employee groups, while also operating corporate-level schemes to reward all employees for the overall performance of the company. The main alternative is a multi-factor, multi-level bonus
There are various types of bonus plans that can be put into effect at your business. Bonus schemes and employee rewards strategies are established to fulfil a number of key business and HR objectives:
• To improve business performance (e.g. productivity, sales or profits)
• To focus employees’ efforts on key objectives such as customer service, quality and on-time delivery
• To increase employee motivation by establishing a clear link between pay and performance (at an individual or team level).
• To support stakeholder ideals by allowing employees to share in the success of the business
• To encourage change within the organisation.
• To create the desired workplace culture by, e.g. rewarding teamwork and good attendance.
Trends in Bonus Scheme Design
Many companies are extending their bonus schemes to cover a wider range of factors, reflecting a broader set of business objectives. This can help avoid the potentially distorting effect of focusing too much on a single measure. In addition to financial and output considerations, bonus schemes increasingly take into account factors such as attendance, customer service, quality, safety, team and individual performance or various HR-related measures. However, some companies operate successful schemes that focus on one particular key objective – most often profits or productivity.
Tying bonuses to multiple business objectives can be achieved in different ways. Perhaps the most straightforward approach is to operate a range of bonus schemes providing appropriate incentives for different employee groups, while also operating corporate-level schemes to reward all employees for the overall performance of the company. The main alternative is a multi-factor, multi-level bonus