Gary Brose, author of "Bonus Your Way to Profits!", has some unique first-hand insights into motivating employees and energizing the workforce. The following is an excerpt from Chapter 6 of his book.

ESSENTIAL ELEMENT #2

"E" IS FOR EQUITABLE!

1. characterized by equity or fairness; just and right; fair; reasonable: equitable treatment of all citizens.

Your bonus program must be Equitable!

What is Equitable?

As it relates to the creation of a bonus program, what exactly is "Equitable"? Well, it is the recognition that whatever you construct must be PERCEIVED to be fair to all employees. Note that PERCEIVED is in capitals because it is the most important word here. Perception IS reality. If your employees perceive that your Bonus Plan is not fair across the board, then you have failed to be equitable. It doesn’t matter if a scientific analysis proves that you ARE, in fact, very equitable. It is perception that counts here.

When designing a bonus program, you will be dividing your workers into multiple groups depending on their primary function and then constructing a bonus plan for each group of people. It is easy, in the process of all this, to lose focus and forget that your plan will be viewed as a whole so each separate portion of the plan does not actually stand-alone. Whatever you design for the clerical staff will be compared to what you create for the customer service folks. If your bonus program for the customer service folks is far more attractive than the clerical bonus, then it will not appear to be fair. As you are designing each portion of your bonus program, keep that in mind.

Why does it need to be Equitable?

Let’s list the reasons:

#1 – OK, this one is obvious. Everyone wants to be perceived as "fair". And if you don’t, you should. Just from a public relations standpoint, you always want to present the impression that you are a fair minded individual.

#2 – For those functions within the company that are generally interchangeable (i.e., just about anyone could do them), you do not want to create a situation where everyone wants to transfer out of one department and into another because the latter has a better bonus program and they think they can make more money that way.

#3 – One of your goals in creating a bonus program is to improve morale and energize the company. Nothing achieves the opposite faster than creating the illusion that you are not a fair person. If one Department starts thinking that you are biased and favor the "other guys" over them, motivation will be at an all-time low. Make sure everyone feels part of the program and are all motivated by it.

#4 – Remember that all of your employees talk about your company outside of work. Unhappy employees spread the news fast. Potential or existing customers may be listening. A poorly conceived bonus plan may result in employees thinking you are unfair, sharing that thought with others and customers may disappear. PERCEPTION is everything!

MOTIVATED WORKERS