Bonus Policy can be referred to as the protocol formulated in an organization based on which the employees are given a bonus. This is the guideline that is set to regulate the conditions of giving a bonus to the employees. If an employee satisfies the conditions and the eligibility criteria he or she will be receiving the bonus.
These policy templates are present here to provide you your required information. You can download these templates at your convenience.
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How to Prepare a Bonus Policy?
Step 1: Follow the Company Guidelines
Before setting any policy you must go through the company guidelines. The company has its own set of rules. The ideals, mission, vision are the epitomes, what a company wants to achieve. Based on this the different policies are set and formulated. Therefore it is very necessary that you follow the guidelines that are registered for the organization.
Step 2: Prepare a Policy Formation Committee
For the development of policy, there should be a group that will be in charge of the formulation process. Not one person decides the policy. There has to be more than one person. A discussion panel will be established and then the decision will be taken.
Step 3: Prepare the Policy Document
Now you can give the bonus policy, codes of conduct, the guidelines a structure. Design a layout for the framed policy. Make it well structured and organized so that employees, if consulting the policy guidelines, can understand. The policy should be mentioned in clear language that is understandable and avoid all types of confusion.
Step 4: Review the Policy
This means that you need to check the policy after you formulate it. Checking and re-checking ensure that the policy is correct and there is no mistake or error in the formulation process. Therefore this step is a must.
What do You Understand by Bonus?
A bonus is a type of financial compensation that is provided or given to an employee beyond the normal wage. It is a sum of money awarded to the employee occasionally or periodically based on achievements or good performance. How much bonus an employee will get is based on the bonus policy that is formulated by the organization.
The increase or decrease in bonus also depends on the company guidelines. It is not necessary that a bonus will be only in the form of money awarded to an employee. It can take any form.
What do You Understand by Bonus Plan?
A bonus plan is a plan developed by the organization to award the bonus to the employees. The plan is designed based on the policy that is formulated. The bonus plan that will be developed has to follow the guidelines as mentioned in the policy book.
A bonus plan can make or break the revenue system of a company. Therefore it is very essential that you have a proper bonus structure to avoid any inconvenience.
How Will You Create Bonus Structure?
Outlining the Goals
The first thing for any bonus structure is to establish the goals. Bonuses should be given to the employees based on performance, and goal-oriented structure ensures exactly the same. The goal of the bonus structure should be achievable, measurable, specific and focused on results and time-bound.
The Focus should be on Collective Objectives and Not Individual
The bets bonus-structure that works for every organization is to have a company-wide goal. Rather than focusing on an individual if the goal concerns the whole organization, it becomes valuable for everyone. The best thing that turns up is that the employees get to challenge themselves and think of the bigger picture.
Taking into Consideration the Employee’s Needs
Nor all employees are driven by money. Therefore it is essential that you take into consideration the choices of all the employees. Base the bonus structure on what they want. This will help you to motivate your employees and get good results from them.
Broaden Your Area
If you have a single thing to focus on, all the employees will run after that. Therefore it is essential that you give your employees the opportunity to expand their horizons and put efforts to achieve multiple things. Most of the time to get valued in an organization, employees need to focus on different things to make progress in their professional life.
Evaluation and Rewarding the Achievements
The last thing that should be there is a bonus structure is the evaluation process. When it comes to giving out the bonus it is necessary that you evaluate the performance of the individual or the team. Perform the correct analysis and get the result. This is necessary so that you can give the right amount of bonus as the employee deserves.
Can a Company Reclaim the Bonus?
A bonus is something that an employee receives beyond the normal wage. The company can reclaim it as per the contract the employee has signed. Therefore there is nothing called a fixed bonus. Your company can ask you to give it back based on the conditions.