4.2 Bonus and Incentive Plans Before you put together a bonus or incentive plan, it’s important to know the financial goals you want to achieve and in the time frame you want to achieve them. Incentive programs and bonuses are tools intended to increase productivity, encourage good business behavior and provide a way for employees to increase their compensation when they or the company is successful. There is a distinction between bonuses and incentive plans. With a bonus plan: Performance measurement is subjective Payment is semi-expected by employees Examples of situations where bonuses are given often include the holiday season, such as Thanksgiving and Christmas, and the completion of a fiscal year. With an incentive plan: Payment is related to performance (this could be individual employees or the company as a whole unit) The amount is defined by a disclosed formula The method for performance measurement is clear Employees know when and how much compensation to expect Incentive plans can be built on accomplishing a single goal or with several goals in mind. Examples of goal related plans for the office team could include: Achieving new sales milestones and levels, meeting yearend sales goal, yearend profit goal Realizing a closing rate goal for phone calls converted to estimates, closing goal rate for estimates converted to service, closing rate goal for booking a higher percentage of weekly and alternate weekly customers as compared to tri-weekly, monthly and occasional customers Hitting a permanent cancellation rate goal Accomplishing safety goals (injury and car accident free), HSP turnover goal. You can create a plan of your own. Keep in mind that measuring and monitoring any goal needs to be quick and easy Once the goal(s) are determined, the next step is to decide how much money to payout incentives. Completing a financial plan will allow you to budget for a program. Strive for a balance between providing a cost effective incentive program and the goal(s) and payout(s) you believe will increase your employees’ motivation as well as increase their accountability. Payment is discretionary The amount is arbitrary
MOLLY MAID Office Infrastructure Manual Copyright 2015, Molly Maid, Inc.
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