The Problem of Creating the Expectation of a Bonus
“We want you to help us grow the business. As the business grows so will your pay. If we do well, so will you.” Have you ever said that to staff? It may sound good, but it isn’t.
When you create the expectation of a bonus, you set yourself up for failure and you set your staff up to be entitlement oriented. You need to stop this mentality of, “The salary is meaningless. But, if you actually do your job you will get a bonus.” Growing your business IS their job and they get paid for doing it.
Why is it that you think you need to give them a bonus? Your employees should be paid a fair wage to do their job. When you create the expectation of getting a bonus for doing their job, you staff may become entitlement oriented. They begin to think that they deserve the bonus for doing their job – it is expected. Further more, bonuses rarely inspire bad workers to be good workers. Usually what happens in the good workers work harder and the bad workers continue to do nothing, yet everyone gets a bonus.
When bonuses are paid I end up seeing staff being paid much more than the market would compensate them. What staff did was apply to answer the phone or do the accounting they knew when they applied for the position what the pay range would be, so don’t inflate their pay.
School teachers don’t take their job with the idea they will get rich, most people don’t apply for a receptionist position thinking it will make them a millionaire, and most of your staff didn’t take their jobs thinking that they would become billionaires as a result. So don’t create those expectations when you talk about paying them a bonus for doing their job.
Your staff should not earn a percentage of your business’ profits just because they work there. Let’s face it, the staff didn’t buy into the business. They didn’t sign a five year lease. They didn’t take out the loans to start the business. They didn’t quit their secure jobs and risk everything to open up the business. In fact, when the times are tough the employees can look elsewhere for a job, but not the owners.
Stop trying to find a bonus formula for staff. Pay your staff appropriately and expect them to do their job and grow your business.
When you create the expectation of a bonus, you set yourself up for failure and you set your staff up to be entitlement oriented. You need to stop this mentality of, “The salary is meaningless. But, if you actually do your job you will get a bonus.” Growing your business IS their job and they get paid for doing it.
Why is it that you think you need to give them a bonus? Your employees should be paid a fair wage to do their job. When you create the expectation of getting a bonus for doing their job, you staff may become entitlement oriented. They begin to think that they deserve the bonus for doing their job – it is expected. Further more, bonuses rarely inspire bad workers to be good workers. Usually what happens in the good workers work harder and the bad workers continue to do nothing, yet everyone gets a bonus.
When bonuses are paid I end up seeing staff being paid much more than the market would compensate them. What staff did was apply to answer the phone or do the accounting they knew when they applied for the position what the pay range would be, so don’t inflate their pay.
School teachers don’t take their job with the idea they will get rich, most people don’t apply for a receptionist position thinking it will make them a millionaire, and most of your staff didn’t take their jobs thinking that they would become billionaires as a result. So don’t create those expectations when you talk about paying them a bonus for doing their job.
Your staff should not earn a percentage of your business’ profits just because they work there. Let’s face it, the staff didn’t buy into the business. They didn’t sign a five year lease. They didn’t take out the loans to start the business. They didn’t quit their secure jobs and risk everything to open up the business. In fact, when the times are tough the employees can look elsewhere for a job, but not the owners.
Stop trying to find a bonus formula for staff. Pay your staff appropriately and expect them to do their job and grow your business.
Posted by Cal Tingey at 11/5/2011 10:16 AM 
Categories: Accounting, Personnel
Tags: Bonus entitlement employees Cal Tingey Cal Tingey wages salary wage staff
Categories: Accounting, Personnel
Tags: Bonus entitlement employees Cal Tingey Cal Tingey wages salary wage staff
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