One of the best ways to motivate employees is to give them a tangible reward for their achievements. Bonus and reward schemes for employees are not a new idea, but the potential they offer is not always fully understood by employers.

The principle of linking success with payment is a sound one, giving employers a means to motivate and reward good employees and to subtly penalize poor employees, whilst remaining within the bounds of good business practice. Some employees will ask, "Why don't you just increase our pay, rather than setting up some complicated scheme?" The answer is simple:

·        As an employer, you have a responsibility to maximize your business' success – motivating employees with rewards encourages this.

·        Bonus schemes enable you to link employee rewards with company profitability, without permanently increasing the wage bill – so when times are a little harder, you can economize without cutting wages.

What Should You Reward?

Choosing exactly what will be rewarded is critical to your reward or bonus scheme's success. The criteria for the rewards must be relevant to your business, achievable for your employees and sufficiently measurable to ensure that the rewards are accurately distributed.

Reward schemes can be based on a number of factors:

·        Performance/Productivity

o       If your business involves production (e.g. a factory) or sales, then target-based rewards can work well.

·        Attendance

o       Often paid weekly or monthly, an attendance bonus based on the number of sick days recorded is a good motivator to reduce unnecessary sick leave.

·        Safety/Accident Record

o       For work involving manual labor, operating machinery or driving, a weekly or monthly bonus based on zero accidents or equipment damage can encourage employees to take a little extra care, and to follow safety procedures.

·        Customer Service

o       In environments where direct interaction with customers is involved, rewarding those who meet defined targets or who "go the extra mile" can be a successful approach.

·        Team performance/team-working abilities

o       This can be a little more difficult to assess, and is certainly the most subjective of the measures described, but where successful teamwork is critical to the business, rewarding team members for their contributions to the team's success can be effective.

What About Non-Monetary Rewards?

Bonuses and rewards do not have to be paid in cash, although that is certainly the most popular and common approach. There are a number of valid alternatives that can work well, depending on the nature of the reward – a salesperson will expect a cash or perhaps share-based reward for exceeding sales targets, but good team performance could perhaps be rewarded with a team day out or an early finish one Friday.

Here are a few ideas for non-monetary rewards:

·        Days out – often best as a team-based reward, or alternatively as a reward for employees and their families

·        Team lunch – perhaps at the conclusion of a big job or project, as a thank you gesture

·        Vouchers for employees to use – examples might be spa treatments, tickets for musical or sporting events or gym membership.

·        Coffee and Cake – really simple, but something like this to mark a team member's birthday or something similar can help improve employee morale.

A Lot of Possibilities

There are a lot of choices when it comes to employee rewards, and you need to take a careful look at your business and your employees to work out which approaches will work best for you.

What is certain is that people thrive on recognition and reward, and a little time and money spent on devising a suitable bonus or reward scheme will help you retain and motivate your employees and should boost your company's productivity.