While a bonus program may seem like an unnecessary expense, it can go a long way in encouraging employees to continue to exceed expectations and keep your business from plateauing. They can also serve to unify your team under core objectives by making everyone aware of company-wide goals. Maybe most importantly, being rewarded makes people happy. At first glance that may not seem as crucial as something like your bottom line, but ultimately the two are inextricably linked. Happy employees are productive because they are proud of the work they are doing, which means you get to be proud of the business you run. Sure, it might sound cheesy, but done right this positive reinforcement can revamp your business – and it doesn’t have to break the bank. Here are a few affordable options for rewarding your employees.
Periodic Individual Bonuses
Showing a little appreciation on a case-by-case basis sets the bar for all your employees, but make sure to give awards only for really exceptional behavior to consistently improve performance across the board. The most effective contests are ones that can be quantified – like, which waiter can sell the most of the day’s special, or who collected the most signatures for the mailing list at your last event. A little healthy competition can invigorate employee engagement and increase the focus of your team overall.
Rewards for these competitions don’t have to cost you much, and they don’t even have to be cash. You could give your winner a few extra vacation days, a free meal, or allow them to work from home for a week – you might even survey your employees before the contest to find out what prize they really want, showing your interest in their motivation and making the stakes even higher.
Another way to save money and still make your workers feel acknowledged is to publicize the win. Giving them the opportunity to be proud of their work is sometimes worth as much as a tangible gift, and the feeling will only make them want to work harder to receive that praise again.
Individual rewards are great for improving performance, but company-wide bonuses can rally your employees as a team. Typically, a company bonus is a cut of overall profit that is given at the end of the year; the exact amount is determined as a percentage of each employee’s salary. Generally, there is a threshold that must be reached for anyone to be eligible (if profits aren’t as high as expected, there won’t be enough extra to distribute). This gives every employee a common goal, and a year-long incentive to work together, as well as simply stay with the company, to reap the benefit of their efforts.
If an end-of-year cash bonus isn’t something your business can afford, maybe consider giving a smaller token of appreciation around the holiday. Gift a thanksgiving turkey, throw a holiday potluck – showing your appreciation in any way you can goes a long way toward encouraging good work and retaining your treasured employees.
Here’s how to get started with your own bonus program:
Start with a budget. Make sure you know what kind of bonuses your business can manage so you can set expectations and pace your competitions or distribution accordingly. If you see a spike in profits from a few successful contests, you may be able to allocate a little more toward the reward fund. Remember, you don’t have to spend your whole budget if it isn’t deserved.
Keep contests sporadic. Doing so will save you the money on incentives, and prevent your employees from getting bored or expecting an extra gift for regular work.
What if I really can’t afford it? You may not always be in the position to give extra – your business may just be starting, or you could just be having a rough season. That’s okay! The best way to reward your employees is by remaining fair, giving feedback, and praising their efforts verbally. When all the hard work does pay off, consider hosting a small celebration to reinforce the great job your team has done. The expense may seem extraneous in the short term, but consider the time and money you’ll save on hiring and training if you can retain your current employees with some extra incentive and a little goodwill.