A Guide To: Company Bonus Schemes
A successful company is built on several elements, but the most important is its people. Whether they are client-facing revenue-generating sales geniuses or efficient administrators that keep the back-office whirring, you want them to be coming to work relishing a challenge. A bonus scheme can help keep your best people in place and encourage star performers to stay with you as they advance through their career.
There are three broad types of bonus scheme, those that are targeted at individuals, those targeted at teams and those on offer to entire companies. This week we are going to focus on company-wide bonus schemes.
Company bonus schemes
Company bonus schemes are implemented across the board and offer several benefits. They remove the risk that people feel left out of individual and team-based schemes, and can also be a cost-effective way of boosting morale and bringing firms together.
There are five main reward options available for an organisation wishing to implement a bonus scheme:
A cash bonus is probably the simplest approach. It’s easy to manage internally, which keeps administration costs low, but it isn’t as cost-effective as some of the other options because you can’t buy in bulk and employees will face a tax liability on their extra income. It’s also worth noting that cash bonuses are less memorable and more likely to get swallowed up amongst household expenses, thereby losing their true motivational potential.
2. Gift cards/vouchers
A gift card’s flexibility makes it potentially highly effective. Multi-retailer gift cards can be redeemed against a variety of products, making them a fantastic incentive for people from all walks of life. There are also significant cost savings when buying gift vouchers in bulk, making them an attractive option for growing firms. However be sure to maximise the presentation value of the reward and don’t simply leave them on employee’s desks without truly (and publicly) recognising their achievements.
Offering shares in a company is relatively easy to administer and gives people a direct stake in the health of your business. The main problem with giving shares as a bonus is that, like the adverts say, prices can go down as well as up as a result of a variety of factors. If the shares do take a tumble, firms quickly lose the motivational benefit of offering the bonus, particularly if the decline is nothing to do with an individual’s performance.
4. Corporate gifts
Corporate gifts are traditionally used for long service awards, but they’ve moved on from carriage clocks and golden watches. Whether you offer your staff a physical gift or an experience, they can be a cost-effective way of making sure that people see the benefit of working for you because they associate a memory or an object with being rewarded.
5. Online points banking
Online points systems are a very efficient way to allocate bonuses, and the continually improving technology that manages the system means that they can be administered very easily. Employees also have the option to nominate someone for recognition or a job well done, enabling the creation of company-wide recognition schemes that run parallel with the overall bonus scheme.
No matter what route you opt for, a company bonus scheme is an excellent way of boosting morale, rewarding innovation and hard work and generally putting a smile on people’s faces. With many of the approaches mentioned above, the administration systems have been designed to allow joint implementation of company, team and individual bonus schemes, creating a great deal of flexibility for management teams that want to use different tools for different requirements.
If you would like to know more about bonus schemes and how Love2shop Business Services can help with your bonus structure, please talk to us today.