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Beware of this 1 obstacle when paying bonuses

by , 11 April 2016
Bonuses act as an incentive for your employees based on the work they do for you. And implementing them within your company can have positive effects on your employees' morale, which leads to an increase in performance and overall productivity.

But what if told you your bonuses could also be preventing your company from advancing in the long run?

Let me explain...


Do you have a paper-shuffler working for you?

You know that person…

·         Always busy but never meets deadlines…
·         Always making excuses for why he doesn't meet company targets…
·         He doesn't meet his KPI's…
·         And he's constantly making costly mistakes…

The next logical step is to get rid of him and get someone who can do the job. But watch out, that could cost you BIG at the CCMA!

So what can you LEGALLY do?

As was already mentioned earlier, bonuses stimulate harder work among your employees, and in return they can expect a reward.

But this is a double-edged sword in that by using bonuses to encourage harder work from your employees, they can also prevent any talent from entering your company.

When I say 'prevent', I am referring to a kind of deterrence effect.

According to Gregory Hamel at Demand Media, setting aside money for bonuses can leave base salaries at an unattractive level for outside talent who might be interested in working for you.

And let's be honest, a higher base salary is more of an eye-catcher to a prospective employee than the possibility of a bonus at the end of the year.

*All in all, it's clear that careful thought is required before introducing and implementing bonuses within your company.

In other words, you require expert advice at every step along the way in determining what path would best suit your business. But at the same time you need the convenience of having such advice readily available.

That's where our handbooks come to play!

So page over to Chapter B 03 in your Labour Law for Managers handbook, and Chapter B 02 in your Practical Guide to Human Resources Management handbook to learn all there is to know about bonuses.

Also, you can flip over to Chapter I 01 in your Practical Guide to Human Resources Management handbook to get some great tips on implementing incentive schemes within your company. 

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