You must reward employees!

I worked for a guy that always talked about giving bonuses to reward the hard work of his employees. While a great concept, the follow through was quite lacking. Essentially, the boss talked about giving bonuses based on performance, but no performance metric was ever put in place and, no surprise, the number of bonuses was very little and eventually dwindled to nothing. Nothing, as in, no bonuses for anything, not even a Christmas get together to show the employees that they are actually appreciated. Now, this is am extreme case, and I hope that no one else has been put through a similar experience, but rewarding employees is essential to the overall success of the employees and the company.

Earlier I mentioned a metric. A metric is a means to measure something to determine what the amount of change is so a difference can be determined.  This performance metric needs to be established before any compensation plan can be put in place.  How is the company going to be able to show a positive change in a employee?  Once that is determined, then a means to compensate for the positive behavior can be devised.  The performance metric and compensation plan need to be well though out and needs to actually encompasses aspects of the job that an employee can really influence and will be most beneficial for the individual employee.  Rewarding an employee with something they do not really care about, for an aspect of their job that they have no real control over, does not promote positive behavior.  This type of bonus system only promotes confusion and a "lack of faith" in the owner(s)/management of a company.  Spend time thinking about aspects of the job that employees actually effect and then devise a functional reward system.  When working on both aspects of the plan (metric and compensation) try to be empathetic (put yourself in their boots) to what really influences employees and what would really make them happy.

When looking over the employee roster, keep in mind what really motivates each employee or each general group of employees.  This will help when coming up with the compensation package in the bonus plan for employees.  Keep in mind that money is not always a motivator to all people.  Sometimes an employer can get away with a simple "pat on the back" or "good job" said with sincerity to get desired results from employees.  In fact, a cash incentive system can be viewed as a demotivater to some people where, in contrast, a simple gesture of gratitude from a superior would further drive great employee behavior.  Always take time to interact and observe employees in order to find out what motivates them to do great work.  Finding the best motivating tools is the work of smart management.

Once metrics are figured out and a reward system to compliment the metrics is put in place, then an effective bonus plan can be implemented and rolled out to staff.  Take time to consider and go through the two main items of a bonus plan.  The planning for and consideration of the employees the bonus plan will affect will go a long way to insure that the bonus plan gets and promotes the desired results, along with a company of prospering and happy employees. Practicing these items will help to obtain and maintain a healthy business.