How to set up an effective bonus scheme and the benefits of doing so

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THERE are many ways to encourage your team to perform to the best of their abilities but arguably the best way is to incentivise their hard work with bonuses to their pay. It’s important to level with yourself and accept that the main reason people work is to make money to survive. Expecting your workers to provide you with the best quality work through some benevolent desire to help you and your business succeed is grossly naïve. In turn, it would be incredibly unethical to expect your team to go above and beyond their expected job requirements without a reason to do so. Read on to find out how you can set up a good quality bonus scheme and why this would be a great thing for your business.

Benefits Of A Bonus Scheme
A well-implemented bonus scheme is going to give your employees a significant boost to their attitude at work as well as helping to motivate them to work harder to achieve those bonuses. This ultimately is going to be a win-win for you and your team, as they’ll enjoy getting their bonus, and your business will find more success with your employees working harder to surpass their deadlines and objectives. You can tailor your bonus scheme to suit your business too.

Alternative Options
As well as bonuses, there are other ways in which you can inspire and motivate your team. While this might not encourage your employees to beat their targets, a salary sacrifice car scheme for example, like the one from Pink Salary Exchange, can provide them with more motivation for a number of reasons. Firstly, they’ll have access to quality leases of electric and hybrid vehicles, and they’ll also save a bit of money too due to the deduction being taken from the gross salary. This deduction ultimately leads to a drop in tax and national insurance payments, so instead of paying to lease a car themselves on top of their normal pay, they can get an affordable lease as well as having some extra cash that they wouldn’t have gained without a scheme like this.

Be Transparent With Employees
It’s important to let your team know exactly how these schemes work so make sure you put the terms in writing for all to see. Avoid any confusing wording and make sure it’s simple and to the point. Ensure you’re truthful with your team too to avoid any problems down the line. If you intend for this bonus scheme to be temporary or discretionary, it’s wise to let your team know this so that you can change the terms or end the scheme without incident.

Designing Your Scheme
When it comes to designing the structure of your bonus schemes, it’s important to consider the best way to benefit both you and your employees. There’s not much point in offering a bonus for your employees beating their targets when they’re already doing so. Instead, move the goal post further or offer that bonus in an area of your business that needs improvement. For example, if sales are down, a tiered bonus system or even a sales commission structure can be a great way to get your team refocussed on hitting those targets. You could offer exponentially better rewards with each increment of extra sales beyond their targets too.

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