There are various types of bonus plans that can be put into effect at your business. Bonus schemes and employee rewards strategies are established to fulfil a number of key business and HR objectives: •To improve business performance (e.g. productivity, sales or profits) •To focus employees’ efforts on key objectives such as customer service, quality and on-time delivery •To increase employee motivation by establishing a clear link between pay and performance (at an individual or team level). •To support stakeholder ideals by allowing employees to share in the success of the business •To encourage change within the organisation.
•To create the desired workplace culture by, e.g. rewarding teamwork and good attendance. Trends in Bonus Scheme Design
Many companies are extending their bonus schemes to cover a wider range of factors, reflecting a broader set of business objectives. This can help avoid the potentially distorting effect of focusing too much on a single measure. In addition to financial and output considerations, bonus schemes increasingly take into account factors such as attendance, customer service, quality, safety, team and individual performance or various HR-related measures. However, some companies operate successful schemes that focus on one particular key objective – most often profits or productivity. Tying bonuses to multiple business objectives can be achieved in different ways. Perhaps the most straightforward approach is to operate a range of bonus schemes providing appropriate incentives for different employee groups, while also operating corporate-level schemes to reward all employees for the overall performance of the company. The main alternative is a multi-factor, multi-level bonus plan.