Don’t let your bonuses become like a restaurant tip

It’s bad enough that the government makes us add a ‘gratuity' on top of the salary of the people that we hire.  So many people compound the problem by adding even more 'gratuity' without receiving any additional value for it.

Does your bonus program look like this?  So many people I meet have bonus programs that have become an entitlement, and for which they receive essentially no value.  A good example of this is the ‘holiday bonus’ which in a lot of cases has become simply an entitlement.

There are three simple rules that I like to apply to bonus programs:

1. Make them quarterly (or monthly). Annual is too long to make the incentive realistic.

2. Be sure they are clearly stated. There should be no element of uncertainty.

3. Use them to get the behaviors that you want and don't pay them if you aren't.