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eo cincinnati, entrpreneurs cincinnati, cincinnati entrepreneurs, cincinnati entrepreneurs organization

eo cincinnati, entrpreneurs cincinnati, cincinnati entrepreneurs, cincinnati entrepreneurs organization
eo cincinnati, entrpreneurs cincinnati, cincinnati entrepreneurs, cincinnati entrepreneurs organization
eo cincinnati, entrpreneurs cincinnati, cincinnati entrepreneurs, cincinnati entrepreneurs organization

EO Cincinnati Blog

4 Secrets to Making Employee Bonuses Work
Posted By:  Jill Claire
Monday, December 22, 2014

We’re in the midst of bonus season. Before you sign those checks, think about this: While money can be an effective motivator, bonuses frequently fail to deliver incentives for better performance. Worse still, they may punish the best performers.

The last Towers Watson Global Workforce Study to address this topic, in 2012, found that only slightly more than one-third (36%) of U.S. employees surveyed see a clear link between performance and pay, including bonuses, and workers are becoming more skeptical about such a connection.

When every employee in a company or at a given salary grade receives the same incentive pay, people are rewarded merely for showing up. Such bonuses waste time and money because they tell employees to do just enough to stay on the payroll. These non-performance-based bonuses do not improve productivity, quality, customer service or creativity. They also breed an entitlement mentality.

Bonuses themselves aren’t the problem. Money can be a significant positive reinforcer, generating outstanding financial results, morale and teamwork, if used in the right way.

To be effective, bonuses must be strongly and specifically connected to an individual’s performance and must reinforce desired behaviors.

These steps can help make bonuses more beneficial to your company and its people.
  1. Identify results and supporting behaviors to reinforce. Pinpoint what each employee needs to accomplish to add value. Cover all elements of the job. For example, beyond meeting sales quotas, a sales professional might be required to file reports on time and share information with colleagues.
  2. Create an easy way to measure results and behaviors. Precise metrics are essential. Lincoln Electric has such an effective performance-based pay system that it often awards bonuses equaling regular compensation—although other companies have found that bonuses representing as little as 3% of base salary can provide substantial motivation.
  3. Help employees track their performance. Bonuses should not bring surprises. Employees need a simple way to monitor how they’re doing in relation to a potential payout. Behavior analyst William B. Abernathy developed Profit-Indexed Performance Pay, which has been implemented successfully at various organizations. All compensation in addition to base salary is paid against a company’s profit. Each employee gets a scorecard showing performance-based pay earned every month that the company is profitable. Using this type of pay system, employees at the Bob Barker Company improved their performance so much that during the 2009 recession, while merit increases averaged about 1.4% nationwide, the company’s net income rose 16 percent, enabling employees to receive pay increases averaging 6 percent.
  4. Consider eliminating annual bonuses altogether. Switch to monthly payouts. Even when aligned with individual performance, yearly bonuses can have less impact than more frequent payments because of the distance between the rewards and the behavior they reinforce. Several years ago, Aubrey Daniels International (ADI) replaced annual bonuses with a system of monthly evaluations and rewards, to close the time gap and encourage incremental improvements. With this system and a focus on the value-added contributions of each team member, the marketing team was able to increase online sales by nearly 25%.

Following these recommendations will not only make bonuses more meaningful and improve individual performance but also provide other advantages. At ADI, the shift to monthly bonuses in particular has helped the team work smarter and saved management time. What’s more, understanding how their work affects monthly results and profits has increased employee engagement and satisfaction.

On a related note, it’s also important to remember that money isn’t the primary motivator for everyone. As discussed in this video, managers need to learn what reinforces each individual and apply those unique motivators for optimal engagement and productivity.

NOTE:  reprinted from Chief Executive Network





 
 
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Chris Holtz
CAC By Design
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I found EO surfing the web to try to find like-minded people to discuss business.  I had no real peer group to have meaningful conversations about business, and in searching the web I stumbled onto the EO Network.  

I attended a "Mock Forum" and after meeting a few of the members I decided to become a part of EO Cincinnati.  The time investment and cost were major concerns.  After being a part of EO for a year I have more time than ever and I have benefited more than 10 times my investment.

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THE VALEN GROUP
 

I have had exponential growth as a person and a leader not just in my business but as a husband and a father because of my involvement in EO.

EO is a global organization for entrepreneur’s only who are like-minded peers from all over the world eager to connect and who want to learn and grow to become a better leader in all aspects of their life.



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DANCO AUTOMOTIVE
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In EO I've found my people.   I used to feel like I was the only one with this unique set of issues, I quickly discovered that EO-ers from all over the world can relate to me and I with them.

In forum I've got a trusted group of advisors that  I can share anything without judgement in a safe confidential environment. 

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Being in professional sports, I wanted to be a part of a exclusive peer to peer group made up of business owners that operated with core values that included leadership growth, non-solicitation and confidentiality.

I found that and more in EO.



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The challenges and triumphs of owning a small business bring us all together and create an amazing bond.

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AI SOFTWARE, INC.
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I found myself at a point in my career where it was difficult to connect with others on a personal level - I always had my guard up in order to avoid being taken advantage of.

EO, particularly forum, is a place where we business owners can let their guard down and be real.  It's a place where you know no one is trying to 'take' anything from you.

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Larmann Financial
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I have been a member of EO for 12 years, and it has transformed my life and business, but more importantly it continues to do so.

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