By Evan Vitale
Listen up business owners: Are you giving employees year-end bonuses this year?
This is a tough topic and, in most cases, one of two things happens when it comes to bonuses:
- There are no bonus checks.
- Bonus checks are handed out and everyone receives the same amount.
Let’s talk about No. 1 in this blog and we’ll address Point No. 2 in our next blog post.
When you share the bad news about the lack of a bonus check this year, you need to make sure to explain the reasons why to employees. After all, they may have been expecting bonus checks! Tell them the truth. For example:
- The company’s financial results.
- How each employee impacted those results.
- What they need to do more of in the upcoming new year to get an even bigger future bonus.
Bonuses can be a trap that most business owners fall into at one point or another during their business careers.
Sure, you want to be a “hero” and make all your employees feel happy. You’d rather be Santa Claus than the Grinch. If you’ve handed out bonus checks in previous years, then a bonus check this year is expected. For some, it’s entitled.
Are you giving bonus checks this year? If not, how do you feel about it?
- We had a rough year. Cash is tight. If I give a bonus, then the employees won’t worry. If I don’t give a bonus, then employees might start to worry about job security and start looking for a new job.
- We had a good year, but I don’t want my employees to know how good. I give bonuses because I feel guilty if I don’t and employees expect them. If I tell them we had a great year, they will start asking for a raise.
- We had a good year and it’s due to my employees’ efforts. I’ll hand out bonuses and thank them for their hard work. We’re not going to talk financials because I doubt if the employees will care or understand.
- We had a good year and it’s due to my employees’ efforts. I’ll hand out bonuses and share our financials with them and let them know we’re expecting bigger and better things next year.
Where do you stand?
Employees know if your business is going well or not. They see the signs. They know how busy they are; they ring up the cash register; send invoices; do the work and see new clients and contracts coming in the door.
Employees do care about their job and they care about your business. If you’re not giving year-end bonuses to employees – and it’s expected – you’ll need to share information to help them understand why.