Rewarding hard-working employees with an end of the year bonus is a fantastic way to show appreciation and improve moral. A cool thing about bonuses is that it does not have to be formal and is customizable to fit the company’s budget and culture. Typically, no one will complain about receiving a bonus, but giving the right gift will make all the difference in employee satisfaction.
There is no right or wrong way to bonus employees, but there are certainly more desired options. To help with the process here is some guidance and things to consider when picking out the best bonus option that will make every employee feel happy and appreciated. We would also consider investing in an employee performance review software to help you determine performance-based bonuses.
The first thing to figure out is what kind of bonus will work best for the company. There are two options to choose from, cash bonuses and non-cash bonuses.
Cash Bonuses
You cannot go wrong with handing out cash. This is the preferable end of the year bonus employees would like to get, especially during the holiday season. This can be in the form of actual paper money, a gift card, or it can even be added into their paystub. Different algorithms business owners typically use to figure out the dollar amount to give include utilizing a percentage of individual salaries, providing an extra weekly or bi-weekly paycheck per person, or using a flat dollar amount.
Another way to handle cash bonuses is more dependent on the employee. This bonus approach makes it more balanced amongst the employees, allowing the hard-working employees to receive a more significant bonus than those who do not put in much effort. If this is the route chosen, then the employees should already be aware that their performance plays a role in the bonus they receive at the end of the year. This gives them more incentive to be productive and efficient.
For management, merely handing out money sounds like an easy route to go. However, it could be challenging to budget in, especially for small businesses or startup businesses.
Non-Cash Bonuses
Bonuses do not always have to be money-based. If the business is on a tight budget, then getting the employees a meaningful gift, like a plaque, tickets to a show, or a gift basket, is still a kind gesture. Even throwing a party of some sort within the office will give the employees something to look forward to at the end of the year. The effort in itself validates management appreciation towards the employees. In this case, it is the thought that counts. Any kind of effort is better than giving nothing at all.
If the business can run smoothly and can handle the employees being absent day or two, another technically non-cash option would be to give them extra paid time off. If the business cannot offer straight money, the next best thing is offering them time. An employee would rarely be unhappy with receiving extra paid time off. This is one of many practices that small businesses should adopt this year. Business is constantly evolving, so should the way you treat your staff.
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