Properly structured compensation plans can align employees with your mission.
Q: I have a small contracting business doing around $5M annually with 15 employees. Should I implement an employee bonus program?
A: Yes. Absolutely
- Pay for performance
- Everyone should have some type of pay for performance
- Yes, it takes some work but the benefits are well worth the effort
- Set targets, track and reward
- The psychology behind it
- Everyone tunes into their favorite radio station WIIFM (what’s in it for me?)
- Bonus programs provide the answer
- Employees will consider the long-term benefits over some of the short-term effort
- Go the extra mile to find better pricing
- Fight for proper credit on errors
- Some guidance
- Not just based on projects
- Align with company mission and long-term goals
- Project goals can often be at odds with long-term goals
- Include everyone in the program
- Rewards can be more than just monetary
Key Questions:
-
How can you improve your compensation plans?
-
Does your plan align with your company mission?
-
Do we include everyone and award for actual contribution?
-
How can we make it better?
Take-Action Items:
-
Set up a solid bonus / P4P program
-
Set goals then track, monitor and coach
-
Reward performance