How Do I Create a Fair Performance Bonus Policy for Support Staff? Seeking Guidance!

Hi,

Greetings.

Please guide me. I have to prepare a performance bonus policy for support staff (Admin, MIS Executive, HR). I am working in a consulting firm. Kindly let me know how to calculate the percentage as well.

Thanks.

Regards,

Manpreet

Understanding Your Company's Structure

What kind of consulting business does your company handle? What are the core departments? What are the supporting departments? What is the total employee strength in your company?

Establishing a Performance Policy

Before making policies on "Performance Bonus," you need to have a policy on performance itself. Have you done that? Have you devised means to measure performance scientifically? Do you measure what deserves to be measured? Performance bonus depends on the score an employee attains in quarterly or half-yearly Performance Appraisal (PA). Do you have a proper Policy on Performance Appraisal (PA)? If yes, has it been communicated to all the staff members? If communicated, has it been understood by them?

If your policy on PA, by chance, is flawed, then obviously your policy on performance bonus will be flawed. Therefore, I recommend checking first whether the proper foundation is laid or not. Else, it could impact employee motivation and organizational culture in general.

The Importance of Performance Appraisal

PA is a powerful source of employee development. However, it is a double-edged sword. With its wrong application, it undercuts growth and leads to employee attrition as well. Therefore, I recommend exercising utmost caution. Feel free to call me on my mobile for further queries, if any.

Thanks,

Regards,
Dinesh Divekar

Performance bonuses can be based on incentive schemes that are framed according to the goals of the organization. For example, in HR, a criterion could be set that the time lag between the manpower requisition form and the release of the offer should be less than 15 days up to a certain level.