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Health & Fitness

Holiday Bonuses for Your Employees... Yay or Nay?

How do you motivate your employees? This is how I do it and it works!

Do you, as a business professional, give a holiday bonus to your employees? In tough economic times do you cut back on your holiday bonuses to your employees? What kind of bonuses do you give, if any? I’d like to tell you what I do that has been pretty successful.

I don’t like to pay a bonus for doing your job. I don’t like to pay a bonus that is expected, as if I owe them more than their hourly wage, for doing their job, but I do LOVE giving my employees, who do an incredible job, more than what they earn. Happy employees, make a happy leader. Happy employees, make a happy customer. Happy employees, make more money for you and for them.

Like most retail stores, we run at either a break-even or a slight gain for the first nine months of the year, and then in the 4th quarter, finally, make some money. In the summer of 2008, I decided I was no longer going to give a holiday bonus to my employees for just showing up and doing their job. But, I was willing to give my employee a percentage of the profits if they could increase sales in the 4th quarter over the previous year. We looked at our 4th quarter sales from 2007, and decided that we would like to increase our sales by 20 percent in 2008... wait, what? 20 percent? Weren’t we headed into a recession then… Oh, yes we were, but I was choosing not to participate.

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I thought back to my days in direct sales, some 27 years ago, and thought about what really got me charged up. The direct sales company I was working for was straight commission, and they had a full color 16 page catalog filled with items like: a gas grill, Lane cedar chest, Lane Rocker Recliner, telephone, clock radio, jewelry, etc. Each item was assigned a point value, and depending on my sales, I could pick prizes from this catalog. I was more excited about the prizes than I was about the commission. I could “see” the prize, I couldn’t see the cash. I knew if I earned the prize the cash would be there. Today we would call that visualization.

I put together a small 8 page prize catalog, geared toward my employees likes. You can see the prize catalog here. Just a note, the catalog is formatted to print out like a booklet so the pages will look unorganized to you in the pdf.

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We have had great success with this catalog. While we haven’t hit the 20% increase (mostly because the rest of the country thinks we are in a recession.) we usually have over a 10% increase, and we do have an increase in everything the employees have to do to earn points. That means we have an increase in customer average, and we have an increase in daily sales, all that adds up to increased quarterly sales. Last year we gave out over $2000 in bonuses at each of our franchises. That might not sound like a lot until you realize I have a staff of 7 at one store and a staff of 8 at the other, and most of them are under 21 years of age. They were thrilled when I use to give out $25 and $50 cash bonuses. Last year we gave away over $3000 in Visa gift cards, a 32” HDTV, a Garmin GPS, a $100 AMC gift certificate, and a couple of iHomes and a few miscellaneous items.

This year, I added to the back of the catalog a place where they could list what prize they wanted to earn, and a “thermometer” so they can keep track of how they are doing. I took them through a goal setting exercise, and told them how they can each reach their desired prize. If all goes according to their plans, I will be giving out several iPads , and a laptop.

My employees don’t realize it yet, but they all got a dose of “personal development”, and it didn’t hurt them a bit. I am training my employees to be goal setters, which will make them into great employees for their next journey as well as future leaders.

When our employees realized that we were going to be sharing the increased profits with them they got excited. When they are excited they are motivated, and when someone is motivated with a goal, look out, you can’t stop them from succeeding.

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