Randee Stever has been writing for pleasure since she was 10 years old. She recently started freelance writing for business and beauty and hopes to continue on this path of working in a field she loves.
5 Tips to Help You Predict Your Year-End Bonus
Year-end bonuses are typically used by companies to incentivize employee to work productively throughout the year and encourage them to actively work towards the company’s bottom line. Bonuses also ensure accountability, especially when companies tie portions of an employee’s pay to both individual and company successes. Almost one-third of all companies takes advantage of this motivation and provide some kind of year-end bonus to their employees. If your company offers an annual benefit, how can you predict your reward amount? The five tips below may help you predict your year-end bonus so that you can plan accordingly.
1.Know the algorithm of the annual payout. It’s important to first understand that annual bonuses are typically factored into yearly budgets at the start of the year. Generally, a company has to meet a certain financial goal before it can even pay any bonus at all. Once the targeted goal has been reached, payout scales up to 100 percent of the planned bonus money or possibly more if the company did exceptionally well. More often than not, an employee’s bonus is tied to the overall rating receive in their performance review. Other times, the bonus is based on whether the employee was able to accomplish a specific set of goals and/or projects.
2. Plan ahead for your year-end bonus. When it comes to bonuses, early communication with your supervisor is critical. If the compensation is directly tied to your performance rating, make sure you understand what is required of you in order to meet and exceed expectations. If the amount is based on a checklist, then you need to understand those goals and the metrics used to measure your success. Remember to maintain open communication about your role and targeted accomplishments throughout the year. If you wait until Q4 to start the dialogue, you will already be too late in securing a better rewards compensation.
3. Pay attention to measures throughout the year. It's equally essential to keep talking with your manager regarding your progress over the course of the year so that there are no surprises come December. One of the more confusing parts of performance-based bonuses is what happens when you can't meet one of your goals due to circumstances beyond your control. Perhaps a project is cancelled or delayed; maybe you move into a new role with new responsibilities. It's crucial to talk to your boss when anything changes or affects your ability to attain a professional objective. Come up with ways to replace old goals with new ones so that you stay on track for a handsome payout.
4. Remember that earning a bonus cannot be done alone. Although it can be frustrating at times to have part of your bonus tied to how well the company performs, this is the way of the future. Companies are raising the bar on how employees can earn annual bonuses and it’s more important than ever for employees to work as a team to ensure the company’s success. Learn to motivate and work well within the various teams you’re a part of and you’ll help increase everyone’s chances of earning a nice bonus.
5. Pay attention to what is going on in the company. Payouts can only be made if the company's goals are met, so be observant of the environment around the office. Observe your manager’s behaviour to get an idea on how well (or poorly) the company is doing. Is your boss upbeat and positive, or does your boss seem stressed? Also pay attention to other clues that may help you decipher the financial climate. Have any projects been cancelled due to budgeting? Have office perks like company meals and corporate snacks been scaled back? Noting the atmosphere of the office can be one of the most telling signs of what to expect towards the end of the year.
While these five tips may be able help you predict your year-end bonus, remember that bonuses are never truly a sure thing and should not be factored into your life’s budget. Live on what means you can depend on; this way, regardless of the annual reward schedule, you won’t be in unexpected debt. Keep in mind that if your manager is less generous than expected or substitutes cash for a less-equitable reward like retail gift cards or extra vacation time, it may not have anything to do with your overall performance. The company may be going through a rough patch, but know that your hard-work is recognised and will be rewarded when the time is right.