2 Ways You Can Give Strategic Bonuses To Your Team

Businessman holding a calculatorMany organisations reward their employees annually with a bonus in addition to their regular salary.

When questioned, most bosses reply that they give out bonuses to thank their staff for their hard work, and improve employee retention.

Most companies negotiate a new candidate’s entry package, especially for higher positions, by specifying a yearly bonus percentage.

However, when workers know that they will automatically get a bonus, and even know the amount, what motivates them to work hard?

A better strategy may be to give out bonuses strategically, which will encourage your staff members to work at their full capacity, as their financial goals of receiving the highest bonus will have to be aligned with company goals.

Strategic bonuses, or bonus incentive plans, reward employees financially based on predetermined factors; in this article we will offer two ways to give out strategic bonuses.


Perhaps the most common bonus incentive strategy ties performance to financial compensation. In this scenario, an employee would be expected to perform to a certain predetermined standard in order to receive a full bonus.

For example, a customer service representative would need to get at least 90% positive feedback from customers, or a bank teller would need to process at least thirty transactions per day.

These hard numbers may be very advantageous in certain industries, but may not be possible to apply in others.

However, managers can still set up certain expected benchmarks, and then provide regular feedback about how an employee’s performance measures up to each benchmark.

Those that succeed in their roles, will get their entire bonus at the end of the year.


Another way of giving out bonuses strategically would be to align the employee’s financial compensation, i.e. bonus, with the company’s financial record.

For example, salespeople may be very motivated if they are promised a certain portion of their total annual sales, say 5%, as part of their bonus.

They will likely work very hard to sell as much product as they can to increase their own bonus.

Likewise, a bonus may also reflect the company’s total cash flow, which is a great tactic to reward key employees who truly play an integral role in running the business.

This will persuade them to be fully invested in the success of the firm, as the more revenue the business makes, the more goes into their own pocket.

Consider a strategic way of handing out bonuses, rather than committing yourself to a specific sum without knowing how your business will do in the upcoming year.

By choosing to utilise incentive bonuses, you will motivate your staff to improve their performance and/or sales record to maximise benefits for them and your firm.

Thanks again

Mark Williams

Head of Training and Development

MTD Training   

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Updated on: 30 March, 2016

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