Advantages and Disadvantages of Supplying Bonuses

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Finding ways to motivate your team to be hardworking and productive is one of the biggest challenges managers face. If you are a manager or supervisor who supplies bonuses to your employees, or are considering introducing the bonus scheme into the workplace, check out the advantages and disadvantages below of supplying bonuses.

Advantages of supplying bonuses

1. Incentive and motivation

Bonus payments to employees give them the incentive to work hard and be motivated. If you give out bonuses at a specific time of the year, then employees will have something to work towards. For example some businesses supply bonuses per quarter, meaning that the employee has an incentive to work towards as the year progresses.

2. Appreciation

Employees who receive regular bonus payments feel far more appreciated than those that do not. When supplying bonuses, you should focus on what the individual has achieved within the past quarter, as this will encourage them further as each month passes.

Disadvantages of supplying bonuses

1. Costly for company

Although the amount supplied is optional, when distributed amongst all employees, it can end up costing the company a great deal of money, whether the amount is supplied on a quarterly or annual basis. Companies may wish to consider supplying gift cards or other gifts as bonuses, rather than using cash.

2. Jealousy

Bonuses are intended to reflect how well an employee has done within their workload; therefore the amount that you supply may vary from one employee to the next. However, employees aren’t hesitant to talk amongst one another; and once one finds out that the other received more, tensions may rise, and people may become jealous. This could result in more problems than benefits.

Every case will be different for justifying the awarding of a bonus to an employee. Just make sure to consider the factors above so it is performed in a fair manner.

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