Attracting and retaining talent for any business is a challenge, so once you have the team you trust in place, you want to keep those employees for as long as possible. A bonus program can be an integral part of your employee retention strategy.
Why should I consider a bonus program?
Bonus programs are one way to retain and motivate employees and provide them opportunities for growth. Bonus programs are set up so employees can see how their increased efforts positively affect outcomes for their company and allow employees to share in that increased success by earning more money. This tends to keep employees happy and motivated. Employees tend to stay with companies longer and work more efficiently when they are happy and motivated. Making the investment in a bonus program that retains efficient and happy employees is far more cost effective than constantly searching for, interviewing and training new employees.
Can I afford a bonus program?
Before you decide to implement a bonus program, it is important to have solid and reliable picture of your financial situation, making especially sure the profit and loss statement for your business is accurate. It’s important to maintain these records to ensure when it’s time to award bonuses, your team has met or exceeded the goals you’ve set.
How do I choose a bonus program?
Choosing how you’re going to incentivize and motivate your employees through a bonus program is not something you have to do alone. The team at Corrigan Krause has developed a bonus program implementation strategy that we customize for each of our clients. Every business owner has different goals, so each bonus program we develop caters to the specific goals our clients have for their employees.
There tend to be two types of structures for bonus programs: individual and collective.
If a business is able to measure an individual employee’s performance as it relates to the overall success of the business, the owner may choose to structure the bonus program based on specific, individual goals for employees. For some businesses, the goal may be to increase productivity and payout rewards. Others may want to reduce waste and encourage punctuality. By implementing a bonus program that focuses on individual employee success, the whole business benefits from improved efficiency.
If it’s not possible to single out an individual employee’s contributions to the overall success of your business, a more collective approach may be a good option. A profitability bonus program is based on the metrics of the profit and loss statement that employees influence. Labor costs are a good example. If a business owner implements a profitability bonus program to incentivize employees to work more efficiently, this will very likely keep labor costs down because when employees are working efficiently toward a goal together, additional employees aren’t needed to complete the necessary work.
To determine how to structure a profitability bonus program, we look back at the historical data of the metric and determine a minimum criteria. Any quarter the minimum criteria for the bonus is exceeded, a bonus is awarded. You can adjust the bonus amounts based on profitability brackets.
Regardless of the specific goal of a client, at the core, all of the bonus programs the Corrigan Krause team creates, aim to motivate employees and let them see how their actions affect the operations.
How do I get my employees excited and motivated about my new bonus program?
Communication is paramount when it comes to implementing a new bonus program. You want your employees to understand all elements of the program, starting with the why:
- Why does your work matter to this business?
- What are the goals to reach for the bonus?
- How are you expected to reach the goals?
- What is the incentive or payout plan?
It’s important to follow up every deadline with a clear explanation of if the team reached their goals and what the next steps are. The whole purpose of a bonus program is to reward and retain good employees. Communication helps keeps employees engaged and aligned with the goals of a business.
Corrigan Krause specializes in bonus programs
If you’re thinking about implementing a bonus program in your business, the team at Corrigan Krause is ready to help you strategize so you can reward and retain the best employees in your industry. Email email@example.com for more information on becoming a Corrigan Krause client.