4 Tips for Talking About Changes to Bonuses

Tips for Talking About Changes to Bonuses

Bonuses combine two powerful forms of motivation — extra pay and clear acknowledgement that an employee has done a great job. So talking about changes to these rewards can feel a bit daunting.

But even if these conversations aren’t easy, they’re essential. Otherwise, you can set up employees for disappointments and lower office morale.

Here are four tips to consider:

1. Talk to employees right away.

If your company’s bonus program is being changed, share the details as soon as possible . You’ll give your team more time to adjust their expectations — and their personal plans and budgets. And you can avoid rumors and speculation that dampen employees’ spirits and productivity.

2. Provide reasons and resources.

Even if your employees aren’t thrilled by what’s happening to their bonuses, they can understand when a change is necessary. So provide as much information as possible , and be straightforward with your team about the reasons. If bonuses were cut across the board, reassure employees that it wasn’t tied to their performance. Some program adjustments involve changes in the way bonuses are administered — who qualifies, payment timing, etc., which means not all employees would see a reduction (see Tip #4.) Either way, if you don’t know all the details, give your staff other sources they can turn to with their questions.

3. Offer other kinds of rewards.

If tighter budgets are affecting the way bonuses are distributed , start with empathy when delivering the news. A loss of income can be painful to virtually anyone. Then find other ways to show your gratitude for employees’ achievements. Personal, handwritten notes are one way to thank your team members individually. Or a hold a small celebration or department lunch where you express your appreciation for each person’s contribution. These communications can be important for keeping up employees’ spirits, in a time of unexpected changes. And your sincerity will be valued.

4. Clarify structural changes.

If your company’s whole bonus program is being restructured, make sure your employees understand the new details. That means you should outline which employees are eligible for a particular bonus. Explain the qualifications, such as specific goals that must be met. And clarify when the bonus will be paid. A referral bonus, for example, might not be paid until a new employee has worked at your company successfully for several months. By making these points clear, you can keep employees motivated, while setting realistic expectations.

Although talking to your staff about changes to their bonuses can be challenging, it’s crucially important to keep them in the loop. A Robert Half survey found that a lack of honest communication is at the heart of most employee morale problems. But one of the best ways to remedy that problem is to get a good discussion started.

Have you had to communicate holiday bonus changes to your staff? How did you handle the situation? Share your experience and success stories in the comments section.