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Create a Bonus Program That Generates Business

Motivate employees with a system that's good for them--and for your bottom line.
February 1, 2010
URL: http://www.entrepreneur.com/article/204858

With ongoing, rampant unemployment, owners and managers of companies large and small might be thinking they don't need to do much to keep employees happy. With so few options out there, employees should be happy to have any job, right? Wrong!

Why? Because experts say that unless companies do what they can now to keep employees content, there will be a huge exodus of talent once the economy turns.

One strategy to keep employees satisfied and motivated is to create a bonus program targeted at generating new business. "It is a prime time to utilize bonuses to improve productivity . . . and be a boon to employee morale," says Christina Stovall, director at Odyssey OneSource, a human resources outsourcing firm.

Paul Gavejian, managing director of Total Compensation Solutions, which works with many small- and medium-size firms to design incentive plans, says he's seen an increase in the use of these plans as companies try to minimize fixed costs. "By motivating professional staff and managers to modify their behavior in some way--do more sales calls, increase hours worked, generate more news and strategies, achieve higher profit, or reduce operating costs--then a company can increase revenues and profits," says Gavejian. "The increased profits become the funding mechanism for the bonus program."

Creating a bonus program isn't rocket science. Just following a few simple guidelines is likely to result in a successful plan. Before beginning, "companies need to first figure out what exactly they are trying to achieve or what they want to accomplish in the future and then structure the bonus program around those tasks or behaviors," says Stovall.

Here's a look at some strategies for bonus programs: