Update your bonus structure to motivate employees
When facing talent shortages, distributors must look at every angle to attract top talent. Bonuses are one way to stand out while also keeping your employees motivated and feeling appreciated.
Ultimately, bonuses reinforce positive behavior and keep employees engage, and on track to hit company objectives. Low employee engagement costs the global economy $8.9 trillion annually, according to Gallup, so anything distributors can do to promote engagement is time well spent.
There are several types of bonuses, including:
- Referral
- Retention
- Safety
- Goal-based
- Department-based
- Spot
- Attendance
- Innovation
- Profit sharing
Whether you offer one or more of these bonuses, they should be aligned with your company’s objectives. Here are a few things to keep in mind as you’re implementing or evaluating your bonus structure:
1. Define clear, measurable objectives. Start with your company’s goals. Then, break those down into smaller, actionable steps for departments and employees. You must know what you’re trying to achieve before you can determine bonuses to get you there. Objectivity is key. If there is ambiguity around metrics and how to get a bonus, employees are more apt to get frustrated.
2. Determine individual and team bonuses. If you only create a bonus program that rewards individuals, you’ll miss the opportunity to encourage collaboration. Your company’s success depends on every department working toward the same finish line, so ensure your bonus program includes some team bonuses. For example, the customer service team must work with the warehouse team to troubleshoot delivery issues.
3. Develop a mix of short-term and long-term rewards. When it comes to bonuses, don’t put all your eggs in one basket. Recognize significant progress toward the longer-term goal since employees can lose motivation if the goal seems too distant to achieve. A bonus structure with quarterly bonuses or spot bonuses can keep momentum in place.
Industry Perspective
“Acme has always held the philosophy of ‘If we work together, we prosper together,’" said Maghen White, vice president Human Resources, Acme Construction Supply Co. Inc. "To that, we have always tried to maintain a profit-sharing mentality. Toward the end of the year, if financial performance permits, we look forward to being able to give out an Acme Holiday bonus to thank our teams for their hard work over the past year and continued loyalty. It varies year to year but there is always something given as a token of our appreciation.”
Bonuses are one way to address employee disengagement. Check out this employee engagement strategies checklist from Gallup for more ideas on how to address employee burnout. Download here.
This "Tip of the Week" is provided by the Talent Development Council | Texas A&M University.
INDUSTRIAL SUPPLY MAGAZINE
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