Either hold those fourth-quarter bonuses against performance or possibly pay out a larger bonus if goals are exceeded. If you're one of those generous souls who take great pride in doling out holiday cash to the troops, the shift to a performance-based incentive program may seem cold and uncaring at first. Kefgen says in reality, it's just the opposite. The bonus programs that tend to go wrong are the ones that aren't grounded in quantitative measures, they're totally qualitative. They breed expectations.
People work hard, or at least they think they work hard.
It sets people up for disappointment. But if it's designed correctly, they will work hard to earn that extra income rather than spend the year wondering how generous you'll be feeling come December. I think the key is to make sure you're doing it in a fair and consistent way. Jay MacDonald is a contributing editor based in Florida. Bankrate Inc. All rights reserved.