PAY CASH
A leader I was speaking with awhile back lamented that he paid his people bonuses and they did not even thank him for it. In at least one case, an employee did not even realize he had been given a bonus and it was more than $1,000!
How do you pay your individual bonuses? Team bonuses? Profit sharing?
I was speaking with
David Spire
, a very successful IT solution provider in Bradenton, Florida today. He is a member of our
CharTec Thriving Profit Peer Groups
. He mentioned that he pays his profit sharing bonuses in cash.
Wow.
Not a new idea, but a good one in this case. You see, David's first quarterly profit sharing payout was in cash. It was very well received. The next one he paid by direct deposit and no one said anything. How many of you have paid a bonus and the employee(s) said nothing? Probably too many of you.
David went back to paying cash and it has been great for employee morale.
If your bonus program is not having the positive effect you are seeking, consider having one type of bonus paid in cash. Profit sharing could be the best option. Talk with your accountant about holding back some money for the mandatory taxes like social security and whether any other taxes should be held back. Also consider whether cash payments are a security risk.
Cash is a momentary motivator and always will be. Used in small amounts on a monthly, quarterly or annual basis, cash can reinforce how much you appreciate your people. It is not the best way to motivate people, but cash is one way to wake your people up to what a great place they work for.
David Russell, CEO
Success With People, Inc.
MANAGEtoWIN, Inc.
| MEETING IDEAS |
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There are two key meetings you need to have for this idea. The first is with your accountant to confirm whether you even want to try a cash bonus, and if so, how do you do it in a way to avoid liability. The amounts paid are still taxable and need to be reported on employee W-2 forms.
The second meeting is with your leadership team. Discuss the pros and cons of a cash bonus, what type you might try in a pilot, and when.
As always, if people like the idea, then try it one time as a pilot. You can always cancel it.
The alternative is to find a way to communicate the bonus to people. I have some other ideas on that we can discuss another time.
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