Having just enjoyed the Thanksgiving holiday, it’s a timely reminder that November has been National Gratitude Month, an opportunity to showcase the success of your employees, your clients and your business through the contributions of your employees. Acknowledging employees’ advances – new trainings achieved, implementation of their recommendations, enhanced internal processes, sales goals exceeded, etc. – is an ideal way to remind them: year-end gifts you may add to their wages or salaries are performance based and not holiday-focused.
While it’s lovely to be in a position to deliver bonus checks to your team, it’s important to remind them (and possibly, to train your own behaviors) that additions to their regular wages are not gifts tied to the calendar; they are an acknowledgement for work done on behalf of your business beyond their day to day job functions. And, as bonuses are often not of equal amounts across your employees and, in fact, may not be given to all, it’s important to ‘train’ your team to know how and why they might expect to receive one. Here are some tips to guide you:
- First, alert employees, typically on their hiring and receipt of an operations manual or contract, how bonuses are granted and how the sum is determined.
- Decide the tax implications of timing of bonuses – those delivered in December are taxable for that year (as is the deduction for you) while those handed out in January will shift the impact to the next calendar year.
- If only some employees are getting bonuses, you may want to alert them privately to avoid resentments and questions. If all are to receive them, it may be nice to be able to applaud your team publicly for the work they did that resulted in this laudable position.
- If you’re not in a position to offer bonuses, yet want to periodically showcase an employee whose initiatives had real impact, consider offering added vacation days, public awards or certificates, gift certificates, inclusion in the quarterly President’s Letter or newsletter to customers, etc.
- Remember that a bonus doesn’t doesn’t have to be tied to a boost in revenue or profits; after all, the more you acknowledge efforts, not just results, the more likely they’ll find ways to be noticed which is often a boost to your business performance or morale; even neatness counts!
- It’s easier to determine a bonus is due (and avoid misunderstandings) if you’ve previously mapped out employee goals and priorities. This might be initially defined in a job description and reviewed with your interim performance reviews.
- The more ways an employee can qualify for a bonus – longevity, exceeding goals, advanced trainings, cost-savings implementation, attendance, etc. – the more opportunities you’ll have to showcase employees and motivate others to step up, too.
It’s important to remember: your employees are hired by your company to perform a job that was defined with their initial engagement. For that they can expect to be paid with regularity and, in some cases, given ongoing medical, education or vacation benefits and contributions to their social security account. Those can easily add 30% to the check they see and you may wish to remind them: in exchange for performance of their job, they can count on getting paid now and see a future benefit upon retirement. A bonus should never be considered a ‘sure thing’ for holiday spending; it should always be tied to performance on behalf of your business, no matter in what way that performance is defined.