Add Bonus Plan eSign with airSlate SignNow

Signature bonus plan

when it comes to planning bonuses there are a lot of things you have to consider if you want to do it right in a way that both rewards people and motivates them so you need a plan that everyone understands and that everyone gets excited about it so how do you create one and then once you create it how do you communicate it to your employees Adrienne grande gsella larsen is the editor in chief of the muse a career platform and job discovery site it's so good to see you it's great to be her thanks for having me I think this is an incredibly complicated discussion so compliment people think they do it at the last minute and just start handing out money and some of their employees think it's great and some think it's not enough and people weren't inspired by it or motivated so let's step back beginning of the year you're planning your bonus plan how do you start to think about what it should be well let's start at the beginning so you really want to think about what your goals are for the year there's no one right bonus plan or bonus structure out there it really depends on what you're looking to do in your business this year you do that per person then topic we want to think about it her department or parole I want to be really fair and I'll talk about it a little bit but you know for sales people for example there's a lot of different ways you could structure it some of them are incentivized on you know number of clients they bring in some of them on the total deal amount some of them on a little bit of both so you want to think about what makes sense for your business so that sales people kind of is their whole separate world right general company do you think about okay here's a pool of money do you set aside a percentage of profit or revenue or something how do you even think about what pool of money you're gonna deal with and then how do you think about how to distribute it to people right so that's gonna depend a lot on your company kind of your company's goals your revenue all kinds of things and it really is important to think about what's going to make the most sense for your business I think one thing that's really important to think about goals are they're their best when people really feel like they have control over how to achieve them so you don't necessarily want to incentivize everyone in your company based on the performance if the company as a whole you know your senior leader she might want to do that but somebody who is a you know a junior designer a junior sales rep they're not gonna have control over that number so you want to set individual goals for them got it so the end do you tell them here is the bonus you are trying to get whatever it is you know few hundred dollars a thousand dollars ten thousand dollars and if you reach these goals you will get it if you don't you'll get less or exactly you want to be very clear very specific measurable and objective are the words that you really want to focus on when you're setting these up and you want to make sure everyone is very very clear on what they need to do what they need to achieve if they're going to get a bonus so basically in the beginning of the year you say here's how much we're gonna give and maybe you don't know the number maybe it's a percentage right I'm gonna give away 1% of revenue this is how I'm going to divide it up amongst you if you reach these goals you will get this much if you reach you know don't reach it you'll get this much etc exactly as clear as that exactly another thing you can do is set up a tiered structure so there's gonna be a really great approach you know if somebody hits goal actually get a certain amount if somebody hits their stretch goal they get even more or you can set things up based on you know if they hit their individual goal they might get a certain amount if the company hits another set of goals then everybody else gets a little bit more what about something that has nothing to do with performance and is just if the company does well there's gonna be a bonus and we're gonna split it you know semi equally or some formula based on your tenure here and your salary and we're just we're all going to share with it together how do you feel about that you know I think that that can a lot of big companies use this model and that can be useful but that's not really gonna be super motivating right everyone on the team because again they don't feel like they have ultimate control over how the company does so I think those individual goals are really important but there are other things you can think about outside of the bonus structure right so you know companies can you know offer benefits offer professional development training offer other things that aren't this if the company does well we'll give everybody a bonus those things could be even more motivating to employees than this sort of vague ambiguous chance wait isn't that interesting people don't necessarily work at places because of money right they work there because of picture and because of all kinds of other issues and so right instead of a bonus maybe you spend that money on doing something is here exactly so studies and studies are showing these days that money is a motivator but it's actually not the most powerful motivator so people come to work every day wanting to feel fulfilled by what they do purpose in what they do engaged in their work engaged in their co-workers out of place that has a great culture somewhere they want to go every day from 9:00 to 5:00 if we're spending more and more time at work every day and people really want to feel like it's a great place to work and they're happy there and money is really not the thing that matters most to them all right okay well thank you Adrian this is so complicated I'm so happy we talked about especially in the beginning of the year when people need to be thinking about this absolutely absolutely thanks so much