Financial Incentives - Bonus 1.4.4
Bonus - designed to motivate employees by rewarding them for achieving particular targets or standards set by the employer.
KEY FEATURES
KEY FEATURES
- Can help to recruit, motivate and retain staff
- Can increase employee commitment to the business
- A bonus payment to an employee can be used as an incentive, especially in a field where employees must make sales or meet specific goals.
- Bonus payments do not have to be awarded on a holiday, at the end of the year or as an incentive. A bonus payment can also be used as a means of appreciation for an employee’s hard work throughout the year or in a specified amount of time in the year. Receiving a bonus payment will not only show the employee he was appreciated for his hard work, but it will motivate him to continue to work hard for further rewards.
- Not all jobs show a clear link between performance and productivity or profit
- Employees may neglect other goals to concentrate on bonus targets.
- Because bonuses are paid out in several different ways - incentive for meeting goals, performance, profit-sharing or end-of-the-year/holiday bonuses - employees may not always receive the same amount or percentage.Both methods can cause issues of fairness. For example, if one employee has worked for a company for 10 years and another employee has only worked for two years, but the 10-year employee is always late and hardly works while the two-year employee works extra hours and has never missed a day, it might not seem fair to award bonuses based solely on seniority. The two-year employee might feel as though he is not being rewarded for his hard work.
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