What makes a good bonus scheme?.

In business and amid a labour shortage, keeping hold of your talented employees has never been more important. To retain talent, incentivising employees through bonus schemes is essential, particularly in sectors where competition is particularly fierce.

But what makes a good bonus scheme? That’s exactly what we want to uncover today. Let’s get to it.

Alignment with business objectives

First, a good bonus scheme will be intrinsically linked to the overarching goals and objectives of your business. Whether it’s increasing sales, improving customer satisfaction or enhancing your product, bonuses should help you achieve your strategic goals.

In other words, make sure that you reward bonuses for the activities that you want to see them prioritise. That should engage and motivate them, prompting them to focus where you want them to.

At the same time, don’t refrain from giving bonuses for innovative and novel ideas – if you can tolerate employees investigating new ways to improve processes, products and services.

Clear and transparent criteria

Transparency is always key in any bonus scheme. Employees need to understand when bonuses are rewarded and the criteria upon which their performance will be evaluated.

Ambiguity or inconsistency in your scheme can lead to frustration and demotivation among employees, doing more damage than would have been caused without a bonus scheme.

So, be clear and consistent with your bonuses and criteria. Define metrics, targets and expectations clearly, and communicate them well and often.


Your criteria should be clearly defined but also fair – in other words, attainable for all employees. If one team can get bonuses for certain work, then all teams should be entitled to the same reward for the same or equivalent tasks.

Assessment also needs to be unbiased and fair to create a culture of trust.

Flexibility and adaptability

Business environments are dynamic, and you always need to be ready to change your plans – including your bonus scheme – so they better suit today.

So, make sure to periodically review and adjust your bonus structures to ensure they remain relevant and effective in driving your desired behaviours and outcomes.

Be personal and recognise great work

The monetary reward of a bonus is huge for the employee in question, and will, more often than not, motivate them to work smarter and harder. But don’t write off other forms of reward and recognition – a kind message or shout-out during a team meeting can do wonders for someone’s ego and motivation.

Of course, you could also consider other rewards outside of cash bonuses, like tickets to events.

Encouraging teamwork

A good bonus scheme won’t just encourage good work, but effective teamwork and collaboration – assuming that is a goal of yours, of course. That not only reinforces a sense of camaraderie but also promotes a sense of shared responsibility for success.

Long-term sustainability

Bonus schemes shouldn’t be short-sighted but instead with long-term sustainability in mind. While immediate gratification is important, a sustainable bonus structure considers overall business performance over time. After all, you don’t want to have to cancel your scheme during hard times – the times when you really need a motivated team.

Striking the balance between short-term rewards and long-term sustainability is therefore incredibly important.

Get in touch with us

If you’re trying to create a bonus scheme but are stuck with the precise details and financial viability, don’t hesitate to get in touch with us. We’ll help you however we can build a plan and deliver it.

Feel free to reach out to us to discuss your business and bonus scheme.

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