HomeHome SearchSearch MenuMenu Our productsOur products

Have you opted for performance bonuses for you employees? If so, then follow these six steps

by , 12 October 2015
A bonus is a payment that you make to an employee. It's a payment made over and above the employee's normal pay and acts as an incentive or reward.

Having said that, there are three common types of bonuses and it's up to you to decide which one will best suit you.

They are:

· Discretionary bonuses;
· Performance bonuses; and
· Guaranteed bonuses.

Should you opt for performance-bonus option, the one where you reward your employee based on his performance, there are six steps you should follow.

They are:


Ensure the employee's job description is complete and up-to-date. Also ensure the employee fully understands it at the beginning of the
performance assessment cycle.


Make use of a standard performance evaluation system. Apply this system CONSISTENTLY among all your employees.

You're obliged to do performance reviews. That's why you need an extremely easy to use, highly efficient system.

The first performance review software is now available in South Africa.

This software will help you determine quickly and accurately:
  • Your employees' skill levels;
  • How every employee contributes to the overall business performance;
  • The training and skill-enhancing requirements for every one of your employees;
  • How to properly motivate your employees;
  • The required disciplinary measures.
Click here to read more…


Assess the employee's performance regularly. This should be done at least once a year.


Assess your company's performance in an objective manner.


Look at any other measures you set as factors before paying bonuses.


Make use of a standard system to calculate the percentage that employees qualify for.

If you are unable to do this, then look at what you did before, alongside how you dealt with other employees' bonuses.
So, there were six useful steps to follow if you wish to use performance bonuses for your employees.

To learn more, subscribe to the Labour Law Loose Leaf Service.

Protect yourself from labour-related problems by using this practical tool

The comprehensive Labour Law for Managers Loose Leaf Service gives you all the details you need for maximum protection in labour-related problems. You will find, for example:
  • Information on the problem areas managers have to handle in the workplace daily, and appropriate solutions;
  • Valuable advice for employers, based on the ever-changing legislation;
  • Sample contracts, dismissals and warning letters, etc;
  • Numerous practical checklists; and
  • Much more…

Related articles

Related articles

Watch And Learn

Related Products


Recommended for You 

  Quick Tax Solutions for Busy Taxpayers – 35 tax answers at a glance

Here are all the most interesting, thought-provoking and common tax questions
asked by our subscribers over the last tax year – everything from A to Z!

To download Quick Tax Solutions for Busy Taxpayers – 35 tax answers at a glance click here now >>>
  Employees always sick? How to stop it today

Make sure you develop a leave policy to regulate sick leave in your company.

BONUS! You'll find an example of the leave policy and procedure in this report.

To download Employees always sick? How to stop it today click here now >>>
  Absenteeism: Little known ways to reduce absenteeism

This FREE e-report will tell you how you can reduce absenteeism in your workplace while avoiding the CCMA and without infringing your employees' labour rights.

To download Absenteeism: Little known ways to reduce absenteeism click here now >>>
  7 Health & safety strategies to save you thousands

Don't let a health and safety incident cost you one more cent. Implement these seven
strategies in your company today.

To download 7 Health & safety strategies to save you thousands click here now >>>