Use bonuses to engage your employees and boost productivity. Before issuing bonuses, review your business strategy to help determine where bonuses may help you achieve your business goals.
issuing your employees with a bonus may motivate them to work harder and contribute more. Consider setting performance goals for your staff to work toward before giving a bonus. For instance, if you own a small payroll accounting software business, you could issue a bonus for staff who have increased their sales by 10% over the previous 12 months; the bonus provides an incentive for employees to reach the goal. It is an optimal time to start new projects or give employees extra responsibilities after a bonus; morale is high, with staff eager to contribute.
Staff who receive an enticing bonus are more likely to feel appropriately compensated and show loyalty to your business. Loyal employees are typically content and less inclined to look for other employment opportunities, saving you time and reducing recruitment costs. For example, if you pay a recruiter a 10% fee for each new hire, and your average employee salary is $75,000 per year, you save $7,500 in recruitment fees for each staff member you retain. Offering bonuses help attract the best talent to your business. For instance, you could offer a sign-on bonus to lure employees with specialized knowledge from your key competitors.
Builds Team Collaboration
Consider using bonuses to create collaboration within your team. Pay a bonus if your staff meet set business goals. For instance, if you own an online business, you could agree to a team bonus if your business increases its quarter-over-quarter revenue for four consecutive quarters. Having a shared business goal to work toward encourages your team to collaborate to make sure everyone receives the bonus. Achieving a shared goal and receiving the bonus helps build camaraderie and effective communication within your business that increases its overall productivity.
Creates Friendly Competition Among Staff
Use bonuses to create some friendly competition between your employees. You could offer a bonus to your top performer for the month. For example, if you own a financial planning business, reward the employee who secures the most assets under management for the month. Offer bonuses that facilitate competition on a regular basis to keep each employee striving for excellence. Friendly competition among your team is likely to have a positive impact on productivity as staff members increase their output in an attempt to receive the bonus. Send your employees a weekly update of each team members performance to keep the competition active throughout the month. Competing for a monthly bonus creates fun and buzz within the office, lifting morale as well as recognizing your key contributors. Employee bonuses bring multiple advantages to your small business that have the potential to improve its operating efficiency. Use a combination of individual and team bonuses to achieve the best results.