Dole Out the Bonuses, Promotions, Raises . . . Or Not
“People work for money, but go the extra mile for recognition, praise, and rewards.” – Dale Carnegie, Leadership Training Guru
The end of another year is quickly approaching. Last year around this time, we wrote a similar blog entitled To Bonus or Not To Bonus: That is the Question. Over the last year, a lot has happened, and yet many things haven’t changed. Everyone’s throwing around the word “recession”, though no one seems to know for sure if we’re in one or heading towards one. Everything still costs a ton of money as supply can’t keep up with demand as we try to leave the pandemic behind. Gas prices are finally coming down. The unemployment rate continues to remain low, but ERP VAR and End-user companies like yourself are still struggling to find the best Acumatica, Sage Intacct, or other Tier 2 talent. And it’s the end of the year, the time to dole out the bonuses, promotions, and raises . . . or maybe not. We’ll talk about pros and cons and some creative ideas as well.
Performance Based vs. Appreciation
Most positions in the ERP industry receive some kind of bonus as part of their compensation. This is NOT an appreciation bonus. An Acumatica Implementation Consultant who has a KPI of 8 implementations a year should get a full bonus if they hit that KPI. A Sage Intacct Accountant who can bill a certain number of hours to a client should get the appropriate bonus. An Avalara Sales Rep who is able to close the deal on their quota should get their bonus.
These are not appreciation bonuses, nor end of year holiday bonuses. These are expected forms of compensation for doing the job (or exceeding the job) as expected of them. Appreciation bonuses are for anniversaries, loyalty for sticking through hard times, coming up with a new idea, going above and beyond, getting a client recognition, etc. One thing that is gaining more attention in the media and disenfranchising employees is the disparity of salary growth among executives vs. employees.
According to The Guardian, over the last year, for the top 300 companies in the US, CEO incomes went up 670-to-1 over workers. The average CEO earned $10.6 million vs. the average worker’s income of $23.968. While everyday Americans were paying record high prices at the gas pumps, the top five oil companies saw $35 billion in profits in the first quarter of 2022. If your company is doing well, a subscription to the Jelly of the Month Club might not go over very well with your staff. But, appreciating those who helped contribute to a profitable year, that speaks volumes.
Downsides to Bonuses
Believe it or not, there are potential downsides to bonuses. The obvious one would be not getting a bonus when you were hoping for one. If you have a track record of holiday bonuses and then stop without notice, that can go a long way to quickly sour a working relationship.
One-time payouts are not adequate replacements for deserved raises and promotions. If your Acumatica Implementation Consultant has proven they can take on the responsibilities of an ERP Project Manager, a $4,000 bonus to say thanks might be perceived as more of a slap in the face. They should be getting a raise and a promotion, especially if there’s room for it.
Also, bonuses can be difficult to dole out in a fair manner. Whether you like it or not, employees talk around the water cooler, even if it’s a virtual one. If one Sage Intacct Accountant only billed at 35% efficiency, but a Microsoft Great Plains Consultant on your team billed at 50% efficiency, any bonuses or recognitions or rewards should reflect achievement of KPIs, going above and beyond, and overall contribution to company success.
Upsides to Bonuses
According to a survey cited by Apollo Technical, an employee who has been recognized is 63% more likely to stay at their current job. Another article from Achievers found that a lack of recognition and engagement contributed to 44% of employees changing jobs. Can you really afford that kind of turnover when rates are already at an all time high? You’ve surely heard of the ongoing “Great Resignation”. According to ESR Check, it’s still ongoing with another 4.1 million workers quitting in September of 2022.
Now, none of those articles says these bonuses or recognitions need to be monetary. But the recognition should be on par with their contribution to the company. This can be celebrating a 5-year anniversary, giving a promotion, giving extra responsibilities, giving a raise, giving a bonus. There are many ways to show appreciation. We interview a lot of candidates every day here at DyNexus Group. The vast majority of candidates who are looking to change jobs are all singing the same tune. They want:
- Remote work opportunities
- A work-life balance
- A competitive salary
- Opportunities for advancement and growth
Praise publicly, praise adequately, and praise sincerely.
Sincerity and Honesty
Most importantly, if you are going to give out bonuses, make them meaningful. If you truly cannot give out paycheck bonuses or something significant to your team, coming up with a “cheap” alternative doesn’t deliver the message you’re hoping. Bored Panda produced an article last year with a list of 30 cheap and insulting holiday bonuses. A few of the noteworthy ones are:
It’s pretty funny . . . unless you’re the recipient of said “bonus”. If you’ve given out holiday bonuses in the past but you can’t this year, just let your staff know. If you’re thinking of some kind of alternative, make it meaningful and sincere. Just know, your staff is probably feeling the squeeze as well. According to The Ascent, 28% of Americans are planning to cut back on their holiday spending this year.
If you can’t afford or don’t typically give a monetary holiday bonus, there are many creative suggestions. SnackNation has put together a great list of ideas. Just remember to put some thought into it. If your Acumatica ERP Implementation Consultant is allergic to nuts, don’t get them a box with a chocolate bar with nuts in it. If your Sage Intacct Marketing Manager doesn’t drink, maybe don’t get the Happy Hour Box. Though it does come with a cool tumbler from MiiR.
The main point I’m trying to make here is that this is the time of year to show appreciation and reward staff as they deserve and as you are able to. Remember, the cost of not appreciating your staff will be greater than anything you can do to show your appreciation. It’s the End of the Year. Dole Out the Bonuses, Promotions, Raises . . . Or Not It’s up to you how you show your appreciation . . . just make sure you do.