Year-end bonuses can be exciting, but in my experience they are kind of a pain.
Not that giving bonuses, and recognizing your team members is a pain. But the timing of year-end bonuses is tricky. Usually you are trying to fit year-end deadlines in while figuring out who will be out on vacation and who will be keeping the office open. Combine this with figuring out your own personal schedule, and anticipating your own year-end bonus, and it can be stressful.
Year-end bonuses don’t need to be stressful. When they are a core part of how you manage your team, and you have outlined what makes up a bonus (especially a year-end bonus), you can simply follow procedure and make sure you do it the right way. But if you are making this stuff up as you go, on the fly, it can feel like you might be playing favorites, or you might be unfair to some people on your team.
In this post I want to share five considerations to help you take the stress out of your year-end bonus strategy. We’d love to hear from you… what have you done, or seen, that makes year-end bonuses smooth and exciting?
Year-end Bonuses Should Reward the Right Things
Years ago I remember hearing that annual employee reviews tended to be biased towards what the employee did in the two or three weeks leading up to the review. Don’t worry about what great things you did in January through November… those are already forgotten about. Make sure your December 1 – December 15 are excellent. Be super nice, smile a lot, bring in donuts. And you might do better in your review.
This is, for lack of a better word, disgusting.
An annual review, which usually heavily influences year-end bonuses, should be a review of the whole year. I know, I know, it’s crazy I even have to write this. But I do. Please consider everything your employee has done since your last annual review. I think it’s critical, as a manager, to keep some kind of log of things that you might want to discuss in an annual review. Keep this current throughout the year because it’s pretty easy to forget much of what you should journal.
I tell employees to keep their own journal! A friend of mine said he prepared a 10-page document with things to bring up in his review:
After that one, I gave my managers 10 page documents about my yearly performance with goals stated and objective metrics about those goals, plus commentary/explanation. You hate to have to do that, but experience eventually pushes you there.
— Matt Eland (@integerman) October 21, 2021
Should employees have to do this? No. But I strongly encourage it. I’ve walked into reviews, excited about news about my year-end bonus, and was shocked at the wins that were not mentioned at all, and a small year-end bonus. It was frustrating.
Go in prepared… this advice is for the manager and the employee!
Year-end Bonuses Should Complement Other Bonuses and Incentives
If you didn’t know, Snowfly is an employee engagement company that specializes in rewards and incentives. We specialize in complex incentive payouts to your employees based on performance, metrics, or other criteria. I say complex but it’s just complex behind the scenes. To the admin and the employee it is quite simple.
One of the most important aspects of performance incentives and rewards is that the reward is applied immediately. If your employee does something well, and an incentive is triggered, that employee should see the incentive (if it is financial), that day, or the next day!
Can you image doing something worthy of a bonus and then waiting until the end of the year to get your $20 or $200 reward? If we are in January, that’s too long. You won’t feel that your accomplishments or efforts were recognized or rewarded. By the time the year-end bonus comes around you’ll appreciate the extra money but you may have forgotten what it was for.
We encourage these immediate incentives because they reinforce positive performance, thoughts, behaviors, etc.
So use those as a tool to reinforce certain behaviors and the year end bonus as a tool to reward other behaviors, like longevity, improved performance, or other long-term objectives.
Year-end Bonuses Should Be Sent Out Early In 2021 (And Maybe Forever After)
If you’ve read any news lately you have heard about the supply chain challenges around the world. Shipping containers stuck in the water, not able to get unloaded. Lead time on buying things can be months longer than usual, if they are even available.
I have a hunch that most-year end bonuses are spent for Christmas, or the year end holidays, rather than squirreled away for January. It doesn’t make sense to award someone a year-end bonus a few days before Christmas (or whatever gift-giving holiday you are thinking about) if they need to do their shopping before then. And that’s where the supply chain issue comes in.
But supply chain aside, next year, and the year after that, consider giving your bonuses in November! That would make planning for those year-end personal expenses a lot easier. Whether it is to buffer for planning time or help with buying something that’s currently sitting in the Pacific Ocean, getting the bonus early will just be nice. No more “I hope I can cover all this with my bonus” guessing.
This also frees up your November/December months so you can focus on the things I talked about at the top of this post. If that’s the only reason you do it, that would be worth it!
Year-end Bonuses With Snowfly Can Be Simple
You may not have seen how sophisticated our incentives and rewards payout system is. It’s really quite fantastic for managers. Some organizations have the luxury of a big payroll and HR team that has all of the complexities figured out. Whether that is true where you are, or doing things like bonuses and rewards feels logistically overwhelming, don’t worry! We have you covered!
For years we’ve been perfecting our incentives and delivery systems that takes taxes, calculations, delivery, etc. out of the equation for you. You simply tell us who gets what, when, and we can likely deliver it. And we can do it quickly. If you have already set up the Snowfly prepaid cards we can easily (and quickly) get money on that card.
This is a very cool, convenient solution for you!
We need this to be simple for you, and your employee on the receiving end. Let us do the heavy lifting and you can move on to more important things on your list!
Year-end Bonuses Can Be Gamified For Maximum Value
One of the most important, and used, features in Snowfly is the gamification part of our incentives package. This is something you need to see to understand, so get on a call with our sales team so they can brag about all our cool features.
In a nutshell, we have a game system in Snowfly that allows your team members to play games and earn more than what you might have given them in cash. Employees love it because there’s a good chance they’ll come out ahead, and the psychological benefits are awesome.
It feels like you can multiply your year-end bonus budget and your team feels even more appreciated!
Like I said, you need to see how this works. Reach out to us and we’ll show you!
Your Year-end Bonus Strategy Should be… Strategic
Don’t let this year-end bonus thing sneak up on you. Plan for it, and do it well! Your employees deserve your attention to this. Instead of having it be an after-thought, make year-end bonuses something your employees really appreciate!
Let’s talk about this!