Recently I read some research from The Chartered Management Institute's (CMI) National Salary Survey. It concluded that a third of those given bonuses were rated as "not meeting expectations." The average bonus for under-performing senior managers was almost £9,000. And the average for company directors - £45,000! According to their Chief Executive Ann Francke, "Too many managers are reaping the rich rewards of their positions despite being poor performers... it seems to be a lot easier to reward poor performance than to face the awkwardness of having difficult conversations with underperforming staff." This is a scenario I’ve come across all too often...
We all know how difficult it is to broach the tricky subject of poor performance. The tendency is to avoid the subject and hope that the issue will go away or that performance will improve. Unfortunately, that gut feeling you have that someone just isn’t performing well is probably right and the only to deal with it fairly, is to discuss it.
However, when you have a bonus scheme in place that pays out on a regular basis and is perceived not to be strongly linked to performance, the more people will come to rely on that money and the harder it can be to give the message that there is no bonus this time around. Often there can be a culture of rewarding past glories. If that’s the case, you might be better advised to address the level of basic pay first before reviewing your bonus scheme.
Local, small businesses are constantly telling me how it is increasingly difficult to find, recruit and hold on to staff. Some economists believe it is this skills shortage that could be forcing up wages and bonuses. Whatever the situation in your organisation, it’s worth doing a review of your pay and any bonus schemes you may have in place to check they are fit for purpose – and that they reward what they’re supposed to.
However, when you have a bonus scheme in place that pays out on a regular basis and is perceived not to be strongly linked to performance, the more people will come to rely on that money and the harder it can be to give the message that there is no bonus this time around. Often there can be a culture of rewarding past glories. If that’s the case, you might be better advised to address the level of basic pay first before reviewing your bonus scheme.
Local, small businesses are constantly telling me how it is increasingly difficult to find, recruit and hold on to staff. Some economists believe it is this skills shortage that could be forcing up wages and bonuses. Whatever the situation in your organisation, it’s worth doing a review of your pay and any bonus schemes you may have in place to check they are fit for purpose – and that they reward what they’re supposed to.