Manage Employee Expectations When Determining Bonus Plans

The Dec 11, 2014 Inc. Magazine article “Avoiding a Jelly-of-the-Month Club Debacle” highlights the need to be aware of expectations set regarding employee bonuses. Just like National Lampoon’s Christmas Vacation’s Clark, who was expecting a bonus large enough to fill his backyard with a swimming pool only to receive a jelly-of-the-month club gift, bonus giving can backfire if not well-planned.

Think First and Give Later

We all get caught up in the holiday cheer and maybe a better-than-expected year-end. Happy with bottom line results executives may rush an end-of-year bonus without a well-thought out plan or how this will be carried out in future years.

Communication of pre-defined performance objectives, well in advance of year-end, should spell out how and when bonus payments are received. Throughout the year, there should be on-going communication regarding company performance levels to keep employees focused and on task. Being consistent about the how, why and when bonuses are awarded is critical to appropriate bonus plan administration. 

Need Help with Your Bonus Planning?

Conover Consulting has worked with companies to create and refine compensation and bonus structures designed to motivate employees and align a culture. Get a compensation check-up for the New Year or find out how you can motivate your employees with a bonus plan. Learn More