Bonus schemes are a popular way to provide incentives and reward employees, and when money is tight in the business you will need to be a bit more creative when it comes to showing your appreciation for your staff.
While you might not be able to give everyone in the business a cash bonus, there are ways that you can make rewards appealing even if they don’t involve a boost to their pay packet.
In this article, we will look at what a bonus scheme is, and why having one is important. We will then give some ideas of different schemes you can implement that will not have a devastating effect on your bottom line.
What is an employee bonus scheme?
A bonus scheme can either be a tool for motivation or a reward for hitting targets, and in some cases, it can be both.
There are two main types of bonus schemes that are regularly used by businesses.
This is a formal and structured bonus scheme that is based on strictly defined criteria related to performance.
The non-discretionary bonus is usually written into contracts, so there is no flexibility about how an employee can earn their bonus - and it is all tied into reaching certain targets.
The discretionary bonus scheme is less structured, and it tends to be down to managers and supervisors to decide who gets a bonus (and when).
Discretionary bonus schemes are not a part of the employment contract, which means they are generally more flexible.
Bonus schemes are usually related to specific, measurable targets, whether they are discretionary or non-discretionary. They can include things like:
- Hitting a sales target
- Getting the right number of leads
- Attendance at work
- Achieving production targets
- Increased customer satisfaction
- Successful delivery of a project
Bonus schemes can be created to reward and incentivize individuals, teams, and even the whole business.
Why is an employee bonus scheme important?
The right bonus schemes will appeal to different working styles, giving motivation where it is needed to ensure that targets are met - and they are an excellent way to reward employees when they have done a good job.
Working non-discretionary bonus schemes into employment contracts can help support talent acquisition, and adding discretionary bonus schemes can help support talent retention.
In essence, a bonus scheme gives employees something to work towards as well as increasing their sense of accomplishment when they do a good job and hit their targets, and they can work just as well for rewarding a whole team or even company-wide as they do for individuals.
Bonus schemes remain a popular addition to company policy in both discretionary and non-discretionary forms because they give staff the opportunity to earn more and get more out of their everyday work.
Having a tight budget doesn't mean that there cannot be bonuses for good work or for incentives - but you might have to think outside the box.
Ideas for cost-effective employee bonus schemes
Below are some ideas to get you started, and they can work in tandem with each other. This is useful when you have a diverse workforce that will have different ways of working and motivations.
1. Flexible work hours
If you want to reward employees for finishing a project, or for hitting a specific target, then the opportunity to go home early and still be paid for the full day is an excellent idea. This won't cost the business any more money - as they would have been paid those extra few hours anyway - but it is both an excellent motivator and a good reward (especially if it is a Friday!).
2. Public recognition of achievements
Naming the employees who have gone the extra mile, completed their assignments early, or done something else worthy of a reward can be done in internal meetings or company newsletters, or you could go even bigger and make it known to all your customers as well.
3. Free company swag
Everyone loves a freebie, and if you have branded company swag available that can make a great reward. Think things like good pens, coffee mugs, or even insulated water bottles - some companies will even go so far as to create branded chocolate bars.
4. Personalized thank-you notes or emails
A thank you goes a lot further than some might think, and a personalized email or note from management for a job well done will always be well received. You can make sure that a copy is held on the employee's personnel file too so that there is a long-term record of their achievements.
5. A company-sponsored breakfast or lunch
Perfect for rewarding a high-performing team, the opportunity for a paid lunch or breakfast, either in the office or at a local restaurant or cafe is something that many employees will enjoy. This can be as simple as bringing in some nice coffee and pastries for everyone, or it could be a long lunch with dessert at a local eatery.
6. A casual Friday dress code policy
Casual Fridays are becoming more and more popular anyway, as dress codes in the office are getting further away from the suit-and-tie combo - but if you work in an environment where smart clothes are the norm, being able to come in on a Friday in more relaxed clothing can be a lovely little bonus.
7. Additional paid time off for outstanding performance
Although employees have a specific amount of paid time off that they are entitled to, there is nothing to stop a business from adding to that - and the opportunity for an extra (paid) day off will be a great incentive. This can be a full day, a week, or even a couple of hours, and it can be added to their leave balance or given on a specific day.
8. A company-sponsored wellness program or fitness challenge
Improving the health and well-being of employees should be a focus of HR, and offering rewards that help boost fitness can only be a good thing. You might consider offering a year’s paid gym subscription, or offer yoga at lunchtime, for example.
9. Gift cards to local businesses
A gift card is a universal reward, and if you can offer gift cards for local businesses you will also be doing good for the community too. These can be as simple as a meal out for a couple, tickets for a theater show, or a night at the movies. It could also be a gift card for a supermarket or some other type of retailer.
10. A team-building event
When you want to reward the entire business or a specific team, you can also help build a culture and improve employee relationships by organizing something that is outside the normal working day. This could be a company picnic where everyone brings a plate to share, or something like a poker night or a quiz night. For a smaller company, you might want to organize something like an escape room or a murder mystery.
11. Employee of the month recognition
Employee of the month is a really lovely and simple way of rewarding staff, and other than their picture on the wall, you can add extra prizes. This might be a specific parking space near the entrance of the building, or the use of an office for the month. It doesn't have to involve big spending either.
12. Mentorship or learning opportunities
As a reward for good work, giving employees the opportunity to mentor others can work - as well as giving them the opportunity to learn from someone else, too. Mentor systems help to develop leaders which have a long-term benefit to the business. It doesn't even have to be on a work-related subject either; if you have a high-performing employee that you want to reward who has a side hustle doing woodburning, then why not offer them the opportunity to teach others about their hobby?
13. A volunteer day
Employees who have a strong sense of community and want to help those in need will value being given a paid day to go and volunteer at a charity that means something to them. This is excellent for a business that wants to give back to the community.
14. A subscription to a relevant industry publication
Working as a reward and an incentive, as well as an opportunity to learn more about the industry they are working in, magazine and other publication subscriptions are a great reward - specifically, because they can be prohibitively expensive.
15. The ability to work remotely on a regular basis
Remote work became the norm for many businesses following the pandemic, but as we return to normal, offering high-performing employees the opportunity to work from wherever they are most comfortable as a reward (or an incentive) is still worth exploring.
16. A paid training program or conference attendance
Representing the business at a conference or other industry event can be an excellent reward, as can the opportunity to attend a training program or some sort of seminar aimed at development. Paying for these things can come out of the development or even the marketing budget, and staff will enjoy the experience of being somewhere new.
17. An opportunity to lead a project
Project leadership is a great idea when you want to reward someone, especially if they are on track for a promotion into a management position. The project can be work-related, or it can be something else - perhaps the development of something like a new recreational space in the building.
18. A handwritten note of appreciation
As a step up from the email option, a handwritten note can be seen as even more personal, especially if it is accompanied by something else such as a bunch of flowers and some chocolate.
19. A recognition program with badges or awards
Cheesy as it might be, badges and physical awards are fun incentives that remind us of our childhood - so a program that uses rewards like these for different things could be a win. Having different badges available for different goals can make it a fun competition between staff members to see who can collect them all.
20. A company pet day
We all love our pets, and leaving them at home while we come to work can be tough - but allowing those who are achieving their targets to bring their pet into the office can be a lovely reward. This might also mean that other employees get the opportunity to interact with different animals that they wouldn't be able to normally, which is fun for them, too.