Effective Bonus Plans

Joel Lazer, FCPA, FCA, CIRPConsulting, HR, Leadership, Misc

In order to be effective, a bonus plan must:

  • be related to the work performed,
  • be consistent with the company goals,
  • be seen as attainable by the participants,
  • pay out a meaningful amount,
  • pay for improved performance.

Effective means the participants will be:

  • engaged,
  • more knowledgeable about their jobs,
  • more knowledgeable about the company goals and objectives,
  • inclined to work in concert with other team members.

The results will be:

  • a happier, more effective team,
  • reduced team member turnover,
  • improved incomes for the team members and the company.

How’s your bonus plan?