Basic Bonus Rules

The bonuses have to support the growth of the organization, the bonuses should not support the increase of the personal income of employees and managers. It is the basic bonus rule, which has been forgotten during last years.

The bonus KPIs have to be set according the business and HR Strategy. The managers have to respect the business strategy and the sustainability of the business in the future. Many organizations set the goals, that are focused primarily short term and they can bring huge issues in the future. The current financial crisis and the recession are good examples or wrongly set bonus KPIs for the employees and managers.

The top management has to define the right mix of bonus KPIs as they support the growth of the organization and some of the bonus KPIs have to be focused on the risk management. The employees cannot be focused on the sales to everyone, they have to be risk aware as they build the stable organization, not the organization, which will be destroyed by the next small recession.

The bonus KPIs have to be defined on the top level of the organization and the management can make the changes according the needs of their own units and departments, but they have to respect basic bonus rules as all the employees share the same goals and vision of the top management about the development of the organization.