A successful business stands on the pillars of hard work and creativity and employees are the main important force that drives any work toward success. So reminding them that they are important to the business and its success is one of the most used yet underrated ways. This is why the importance of organizing employee rewards and recognition programs is becoming more and more important but they are not easy. Especially if you are confused about what reward and recognition you can hand out. For that, giving spot bonuses is an excellent idea. It will clear the confusion about what to choose and at the same time boost the productivity among your employees.
But before knowing how you can arrange one, let's know what a spot bonus is.
What is a Spot Bonus?
Spot bonuses are also known as the one-time rewards, typically in cash that are handed out to employees who have done exceptionally well in their respective departments. These cash rewards are not part of the employee's remuneration or salary packages and are awarded on spots. These bonuses are given at the managers' discretion which is why the value is most likely to be more modest than other rewards.
Now that you have gotten the concept of what a spot bonus is, let’s move on to how you can arrange a spot bonus program for your employees.
1. Define What the Primary Objectives are:
The first step of setting a spot bonus program is defining the primary objectives, clearly and concisely. When you are outlining your end goal, you are ensuring that whatever bonuses you are choosing are meaningful to both the organization and the employees. You can create a spot bonus for various purposes such as retaining top talent, reinforcing desired behaviors, promoting recognition culture, encouraging creativity and innovation, enhancing employee engagement, motivating employees, recognizing exceptional performance, etc.
2. Identify the Criteria:
When you are organizing a reward and recognition program, there must be set grounds for eligibility. This is to maintain transparency in the process and encourage your employees to give exceptional performances. Similarly, when it comes to spot bonus programs, merely organizing them will not be enough, you need to set clear criteria. You can select on the basis of criteria like customer satisfaction, exceptional performance, meeting and exceeding targets, leadership, team collaborations, innovation and creativity, peer nominations, problem-solving, etc. In the end, ensure the fact that these criteria are aligned with the quantifiable performance metrics. You can also involve key shareholders and investors in this process.
3. Set the Budget:
When it comes to giving out rewards and especially spot bonuses, setting a budget is an important step. The budget depends on the financial capabilities of the organization which you can set considering these facts - what are the frequency of bonuses? What is the number of your organization’s employees? What is the average bonus amount?
4. Make Clear Communication:
Clear communication becomes necessary for any program to be conducted peacefully. So you need to ensure that your employees understand what this program is, what its purpose is, and what criteria they need to meet to get rewards and benefits. You can set this clear communication via emails, team meetings, or web portals where everything will be listed with straight instructions.
5. Select the Format:
After your employees know what program they will be a part of, it is time to select the format of the spot bonus as there is a ton of variety in spot bonuses. You can go with the classic allure of cash prizes or you can choose gift cards as a spot bonus for your hard-working employees. You can also choose a paid vacation or time off as a spot bonus or even go for a non-financial reward. But the array of attractive formats does not end here, you can also set up a point-based reward system as a spot bonus. These points will have monetary value attached to them which will give employees the power to choose their rewards.
6. Establish a Fair Bonus Process:
While setting up the spot bonus program, make sure the process is fair and transparent thoroughly, starting from nominating, evaluating and finally approving those well-deserved spot bonuses.
In the whole process, you can definitely include managers, human resources, and supervisors to ensure the fairness and success of the program.
