Manage It Right!

Is your bonus compensation system fair?

0

Have you ever observed that businesses owners and compensation decision-makers in organizations over-bonus too many of their employees, be they under-performers or equal-bonus recipients regardless of performance? This is unfair to both the employer and the employees. It is unfair to the employer if the company is paying too much in bonuses. Those bonus monies might be better invested in needed capital equipment, new personnel, new business initiatives, etc. It is unfair to the high-performing employees whose bonus compensation does not reflect their relative contribution compared to lesser-performing colleagues. Unfair bonus compensation is a morale killer — it tells high-performers that their contributions are not valued as much (relative to the lower performers receiving bonus) and it unnecessarily rewards the lower performers. Over time, higher-performers will seek other opportunities outside the company, and the company is left with over-bonused under-performers. So why do so many companies endure these scenarios and […]