How to Reward Staff for EOFY Results
As you wrap up the financial year, you are hopefully counting your profits and success over the past year.
It’s your business, and you have worked hard to build it and to get it to the level that it is at. If you have staff, they will also have contributed and had an impact on the profit. If it has been a good year, your staff may feel they have contributed to the ‘win’ and may well be asking (at least in their own minds, if not asking directly) what reward they will get?
What part of the success should you share with y0ur staff and how?
Profit in a business is a reward. As the owner of the business, you deserve to be rewarded; and so do your staff. Salary or wages is what you pay to get people to do the job that needs to be done; it is not a reward in itself. Increases in salary should not be made to reward good performance. Rewards are things given over and above wages or salary. However, rewarding good performance does not have to be monetary.
Do not ‘reward’ staff with a pay increase.
The effect of a reward will vary depending on the person. Not every person on your staff is motivated by money; neither are you. Of course, money is important, but it is not the only way to reward people. Designing specific bonus and financial reward schemes is something you should discuss with an expert and also with your accountant.
In general terms, the effect of a financial reward lasts only for three pay periods. Yes, that’s how short a time it takes people to adjust their lifestyle and choices to accommodate the new influx. Paying money off the mortgage, treating the family out to dinner or the movies or perhaps paying for a holiday; it really doesn’t take much for extra cash to be absorbed. And that is a key reason for you to look into non-monetary ways to reward and recognise staff for a good year.
Here are a few ideas on how to reward your staff for a good 2017/2018 financial year:
1. Host a team lunch or dinner where you pick up the tab.
That may be something that you are happy to do if the team is close-knit and works well together.
Of course, you need to be mindful of consumption of alcohol and conduct at work events (refer to an article around Christmas parties for more on that aspect).
2. Knowing your staff allows you to know what is important to them.
When you personalise a reward, it will have more meaning than the total dollar amount. Perhaps a voucher for dinner at a nice restaurant for an employee who is recently engaged or newly married. You might give a voucher for an ‘experience’ such as driving a V8 for a day, hot air ballooning or a night’s accommodation.
3. Say “Thank you.”
The power of a genuine and personal thank you can be far more powerful than you realise. Many business owners can attest to the effectiveness of a personal thank you and movie tickets or tickets to a show. Inexpensive yet highly appreciated.
4. Pay a cash bonus.
Make sure though that you have some guidelines around:
- What triggers the creation of a bonus pool of funds (i.e. profit x% above budget).
- What performance level is needed to earn a ‘piece’ of the bonus pool (i.e. performance over the year against specified KPIs that is consistently above expectations).
- How much each person will get; the amount of the bonus is relative to their contribution and salary.
- Transparency of the bonus process; staff know what is required for there to be a bonus pool and how they will or will not be deemed eligible for a bonus.
- Confidentiality; actual bonus amounts are not to be discussed.
Regardless of how successful your 2017/2018 year has been, paying a bonus for the end of the financial year just finished is not recommended unless you already have a process set up. Get creative and give your staff rewards that have meaning for them and an impact for you. Always keep in mind the purpose of a reward and the reasons why you want to reward your team.
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