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Consider these eight points before you decide to award year-end bonuses

by , 04 November 2014
At this time of the year, employers who pay out bonuses are busy dealing with these payments.

If you don't grant year-end bonuses in your workplace currently, but are thinking of paying them out next year because you've heard they can:

• Motivate your current employees;
• Make your company attractive to potential employees;
• Make sure skilled and valuable employees stay at your company; and
• Ensure you get better results from employees by linking pay with performance.

It's best you consider these eight points before you decide to award them...


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Eight points you must consider before you decide to award bonuses

 
According to the Labour Law for Managers Loose Leaf Service, how you evaluate employee performance and reward good performance contributes to how well your employees perform.
 
That's why they recommend you take these points into account before you decide to award bonuses:
 
1. Ensure every employee has an up-to-date and comprehensive job description.
 
2. Set clear performance objectives.
 
3. Involve your employees in their own goal-setting to improve their understanding of the performance requirements you expect. This will ensure their goals are realistic and will secure their buy-in.
 
4. Monitor performance on an ongoing basis.
 
5. Conduct regular (for example, weekly or monthly) informal performance feedback discussions with all employees. This will motivate good performers and allow you to intervene early if an employee isn't performing;
 
6. Encourage your employees to participate in and give their input to any performance feedback discussions and formal evaluation processes.
 
7. Clearly spell out qualification criteria and bonus payment terms in your employment contracts.
 
8. Inform employees well in advance if you're unable to pay a bonus that year, so they can arrange their financial commitments.
 
There you have it: Before you decide to award year-end bonuses, consider these eight points.
 
PS: For more information on bonuses, check out the Labour Law for Managers Loose Leaf Service.


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