You’re probably thinking that a bonus can never be bad news, but you’d be wrong. Before I go into that let me discuss briefly the whole point of a bonus plan.

A bonus plan is intended to focus your employees on your company goals. As a side benefit it’s a motivator and gives employees a reason to be more productive and work together better.

Have you heard the phrase “working ON your business rather than IN your business?” Usually this means to focus on building your business rather than getting caught up in the details of the day-to-day business that can eat up your time so you never get ahead. However, a bonus plan is another way to work ON your business because you are ensuring your employees have an eye on achieving the company’s goals for you. If they are working on the goals with you (as opposed to just showing up each day), then the achievement of those goals will also help grow your business.

So, what’s the bad news? A bonus plan is only as good as its planning and implementation. If you come up with a bonus plan that’s weak, then your employees will view it  [click to read more …]