Incentivizing Your Employees

Here’s how our company handled bonus programs over the years. As we figured it out.

Employees are like all of us, they prefer incentives they can control. SecurEmploy Division had annual bonus tied to company-wide profits. Like most companies.

Michael Gridley recently had interesting article on incentives. (Michael is serial entrepreneur and investor based in San Antonio. He is the chairman and co-founder of Dura Software.)

Majority of companies incentivize employees on annual company-wide profits.  That is not a good motivational tool. Rewards people, yes. But does not motivate them to go the extra mile.

Michael talked about 4 incentive points…that employees can control

SecurEmploy Division adopted above 4 points 30+ years ago. Michael’s article was good reminder to take look at current bonus programs for our 5 Divisions.

Here’s how SecurEmploy created our bonus program.

First year we did it after budget season. That was our first mistake.

I have learned that most good things we have done over the last 50 years were learned from mistakes or dumb things we have done or tried. (Like all companies, we have had few missteps.)

We have all read articles that attest to learning things the hard way. I’ve got 50 years proving that. Humbling? Initially, but then our response to mistakes became highly motivating. We now know and accept that everything is not going to work.

Pareto’s 80/20% rule. 80% outcomes will come from 20% ideas.

As soon as we recognized that we stopped kicking ourselves when bonus idea didn’t work.

Those 4 incentive points? Easy to say and list. They take real thought on how to implement for different employee teams. We involve employees when adopting bonus programs. When something does not work, we all have vested interest in making corrections.

Now, we allocate bonus dollars, when building budgets. (Logical decision, so how did it take 3 years?) We started by setting aside equal dollars for every Department in all 5 Divisions. If you want to have second stretch bonus program, create them. We funded stretch programs separately.

Do all teams and Departments contribute equally? Heck no. When we first started this HR and Accounting had fits. They loved one-size-fits-all.

Our base premise

Every department and all employees, including hourly associates, deserve a bonus program.

Here, everyone participates. Teams/Departments spend few minutes asking how we can improve last years program. What changes do they suggest. We do that month before budgets are due. Initially all our teams were skeptical. They saw us getting bogged down in details.

We kept stressing need to keep bonus programs simple.

Reaching out to customers consistently? Every employee is expected to talk to minimum 3 guests/customers each day. That’s standard. No bonus for meeting standard. Bonus comes from suggestions made that can be easily implemented and measured. Employee writes up suggestion and submits it to sub-team in their Department. Sub-team says yes or no to suggestion. Then determines bonus $ for suggestion, how and how often results will be measured.

Employees get response within 3 days. They know if, and when rewards will come.

Every Department and Division in our company has made major contributions over the years. Some of best ideas come from employees. We’ve learned to seriously consider all ideas from everyone. Our Division’s are distinctive. Cross-over was an unexpected surprise.

Every Department and Division in the company created their own bonus program criteria and how to allocate their dollars. First year Executive Team accepted Department bonus programs unaltered. (Did everyone learn from that experience? Yes, in surprising ways, that were self-correcting.)

Overhead Departments? Initially we had them. Our first goal was eliminating them. No-one wants to be considered “overhead.”

We talked to employees in those Departments. Asked them how they would alter operations to shorten delivery times, improve service…to customers and other Departments that relied on them. Increase revenues. Reduce costs. How their Department could escape being “overhead.” We were able to transition 82%.

At SecurEmploy we were amazed at the ideas we received from entry level and mid-management employees. Often, they had more ideas than top management. Their ideas were often better. Every year our management teams have sought employee ideas throughout the year. Not just during budget season.

Now we offer instant incentives for the best ideas. Ideas we adopt, employee with idea, gets year end incentive based on success of idea. Then we pull in the person with the idea, and their immediate team to get ideas on how to make the adopted idea better the next year. Remember above? Michael Gridley encourages incentives for employees who think of company success in years instead of months?

Ah, but what about 2026? Budget season is long past. 2027 budget season is on us. That was true at SecurEmploy our first year. We got our Executive Team together and figured out how we could find some extra money to pay bonuses. We started with instant incentive dollars for the best ideas. In actuality, we paid a small incentive to everyone who submitted an idea. Our goal was to encourage employee contributions.

We have learned a lot over the 10 years we have been using this approach. Employees buy-in? Oh yeah. Are they thinking about company long-term? Absolutely. Has it reduced turnover significantly? Yes.

Have questions? Bonus program ideas to share? Reach out to Tom Ferree via LinkedIn.

Tom Ferree is the founder of Ferree & Associates and SecureEmploy, organizations focused on helping companies find exceptional talent and helping professionals advance their careers. Since founding Ferree & Associates in 1977, Tom has worked extensively with hospitality companies, executives, and rising leaders across the industry. Through SecureEmploy, he shares practical career strategies, leadership insights, and real-world advice to help professionals grow their careers and help organizations build stronger teams.