End of Year Bonuses
bover
8 Posts
My employer wants to change how we calculate and distribute end of year bonuses. We currently give out an end of year bonus in December, using a perfromance/attendane based formula. The idea behind the system is that employees that have a very good attendance and performance rating receive a better bonus than those that do not, no surprise there. The problem is that this can be very time consuming and sometimes can be have a negative affect on the employee if their manager is late on turning in their annual appraisal. I factor that in to make sure it is not held against the employee, plus it is reflected on the manager's PA. It is not a bad system, but my employer's are not fans of it. They would like to see the bonuses given out bi-annually instead of annually and a simpler system put into place. One that still rewards outstanding performance and attendance, rather than an across the board bonus.
Comments
Wow, you are in a pickle. I work for a federal contractor and we do bonuses as performance based. We would like bonuses to be given out during the year- semi-annually instead of year end (it is a work in progress). We give bonuses based on several criteria-the performance review is a small component. It would seem that you need something else to measure "performance"- that might make it easier. Some examples we use are: bringing in business, obtaining patents, etc. It would help if it was tailored to your industry. I believe everyone contributes and you have to be careful not to discriminate against people who may be on a reduced work-schedule, etc. for accommodations under FMLA and ADA.
Best of Luck,
Angie
Unless you have an automated system that helps you administer your bonus pool, you could create ever more ill-will with your EE if you attempt to administer this process more than one per year. You may want to consider pre-populating the forms (i.e. include time records & last merit increase rating) and then your managers can just let you know if anything else needs to be adjusted and that they approve. Not sure if you do, but I would wait and pay all of bonus amounts within the same paydate.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
I agree that performance should be a component within the annual bonus review, but reare many other factors that you could include beside attendance. Annual bonus payments are costly to a company and you want to ensure that you are able to use this as a tool to drive the correct behaviors (not one of entitlement). Although I’m not making your administrative woes any easier, it may be worth exploring some key objectives that management would like to keep your employees focused on. Good luck.