{"id":93091,"date":"2023-02-24T13:51:45","date_gmt":"2023-02-24T17:51:45","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=93091"},"modified":"2023-02-27T14:11:36","modified_gmt":"2023-02-27T18:11:36","slug":"employee-bonus-program","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/employee-bonus-program\/","title":{"rendered":"Employee Bonus Programs: Motivate &#038; Engage Your Employees"},"content":{"rendered":"\n<p>What are the benefits of instituting an employee bonus program? How do you build a bonus program?<\/p>\n\n\n\n<p>According to Jack Stack and Bo Burlingham&#8217;s book <em>The Great Game of Business<\/em>, bonuses are a proven method of rewarding employees. Lucky for managers, bonus programs also encourage employees to work harder because they have a financial goal to achieve.<\/p>\n\n\n\n<p>Continue reading for a breakdown of how employee bonus programs work.<\/p>\n\n\n\n<!--more-->\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-employee-bonus-programs\">Employee Bonus Programs<\/h2>\n\n\n\n<p>According to the authors, <strong>instituting an employee bonus program is a great way to offer rewards and encourage engagement.<\/strong> Bonus programs reward employees with extra money when they reach certain goals. The promise of the bonus captures employees\u2019 attention and encourages them to actively work toward the company\u2019s goals.<\/p>\n\n\n\n<p><strong>These programs must operate on a company-wide level,<\/strong> the authors say: Everyone in the company works together to meet the goals, everyone is judged with the same metrics, and everyone gets a bonus if the company meets the goals. This method works better than offering individual bonuses because it encourages employees to work together to meet a joint goal. In contrast, when employees compete against each other for more limited bonuses, conflict and a lack of cooperation arise as co-workers see each other as threats instead of allies.<\/p>\n\n\n\n<p><strong>Stack and Burlingham recommend constructing your bonus program with tiers.<\/strong> The minimum level of effort discussed above forms the baseline that employees must meet to earn their salaries, while the company\u2019s other goals form the bonus tiers. As the goals grow more ambitious, the bonuses that employees earn for meeting each one increase as well. Stack also advises paying out bonuses every few months. This structure helps employees remain engaged throughout the year\u2014the more frequent payouts keep them interested, while the increasing bonuses encourage them to remain active.<\/p>\n\n\n\n<p>(Shortform note: As mentioned above, rewards trigger the pleasure centers of the brain, providing a burst of dopamine that increases motivation and positive feelings. This positive reaction can be enhanced by staggering these rewards and using a tiered structure, as Stack and Burlingham suggest. This kind of bonus program concretely shows employees how far they\u2019ve progressed in meeting their goals, and according to business experts, <a href=\"https:\/\/hbr.org\/2011\/05\/the-power-of-small-wins#:~:text=we%20discovered%20the-,progress%20principle,-%3A%20Of%20all%20the\" target=\"_blank\" rel=\"noreferrer noopener\">making progress is the single most important factor for encouraging motivation, inspiration, and positive feelings<\/a>.)<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Preventing Inter-Employee Competition<\/strong><br><br>As Stack and Burlingham note, competing for bonuses can lead to conflict because competition requires one person to fail so the other person can succeed. For example, let\u2019s say Sarah and Hank\u2019s employers give a bonus to whoever sells the most books in one year. For Sarah to win the bonus, Hank must fail to sell more books than her. Her success relies on his failure, which might make Hank feel resentful. These negative feelings increase conflict, making Hank and Sarah less likely to appreciate or support each other.<br><br>Stack and Burlingham recommend mitigating this problem by only offering company-wide goals, but there\u2019s another option: Offer individual bonuses that make employees <a href=\"https:\/\/www.makemebetter.net\/compete-with-yourself-rather-than-with-others\/\" target=\"_blank\" rel=\"noreferrer noopener\">compete against <em>themselves<\/em>, rather than their co-workers<\/a>. This prevents conflict, helps employees appreciate each other\u2019s work, and can make employees happier.<br><br>For example, let\u2019s say Sarah and Hank\u2019s employers change the program so any employee who sells 100 books in a month earns a bonus. For Sarah to win the bonus, she has to push herself out of her comfort zone and work hard to reach more customers and make more sales. Her success doesn\u2019t rely on Hank\u2019s failure; in fact, he can sell 100 books and earn the bonus as well. Since neither Sarah nor Hank has to fail, there will be less resentment between them. They\u2019ll be better able to appreciate and support each other.<\/td><\/tr><\/tbody><\/table><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>What are the benefits of instituting an employee bonus program? How do you build a bonus program? According to Jack Stack and Bo Burlingham&#8217;s book The Great Game of Business, bonuses are a proven method of rewarding employees. Lucky for managers, bonus programs also encourage employees to work harder because they have a financial goal to achieve. Continue reading for a breakdown of how employee bonus programs work.<\/p>\n","protected":false},"author":14,"featured_media":70642,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[14,42,30],"tags":[914],"class_list":["post-93091","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-management","category-motivation","category-work","tag-the-great-game-of-business","","tg-column-two"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.3 (Yoast SEO v24.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Employee Bonus Programs: Motivate &amp; Engage Your Employees - Shortform Books<\/title>\n<meta name=\"description\" content=\"Have your employees been working extra hard lately? 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