On the Topic of Bonuses

How does a business leader know what someone’s work input is truly worth?

What is a person’s actual monetary value to an organization? That’s a tough question with many factors that play into that number.

One of the biggest factors is what a customer is willing to pay for a product or service. Included in the amount of what a customer will pay must be compensation for the time it takes a team member (or multiple members), to complete that project. But even if you know that number, there are many intangibles when it comes to employees and their work. A team may have gotten a project done together but some may have put more time into it. Some may have taken a leadership role, while others completed a singular task and moved on to something else. Some may have worked on it with a positive attitude and willingness to learn, while others may have done the bare minimum, complaining the entire time. Others were likely engaged in problem-solving for the project, while some stepped aside until the problem was solved and then went to work. Those are the intangibles. Even if everyone is being paid per hour, their value truly is different.

For ESI clients, that is where the bonus comes in. It helps address compensation for the differences in intangibles. In good years, when there are dollars available for bonus distributions, leaders can use the bonus dollars allotted to their team to make up the differences between those who add greater intangible value to the team and those who do the minimum.

A positive attitude, hard work, going above and beyond, growth in competencies through a willingness to learn, and showing up on time, every time, are all things that add value above and beyond the base wage, and should be rewarded when there are funds available to do so. The discretionary bonus is the best way that leadership has found to do that.