Bonus and Company Underperformance

This moment comes in the life of the organization, sooner or later. The organization does not meet its financial and sales targets and the top management has to make a very difficult and very important decision about the bonuses for the employees.

The top management has to make one of its most difficult decisions. The decision about the bonuses for the employees. Honestly, in the recent years, the bonuses became a part of our salary, which is paid every year. And then, the top management writes a nice letter to employees, explaining their “Thank You” for the hard job and the decision about the no-pay of bonuses.

The decision about the bonuses is the real leadership decision as the top management cannot hide and they have to provide a good explanation and they have to show the positive leadership example to follow. The top management has to be the first line to cut their own bonuses, they have to cut their base salaries to show their relationship with the organization and its employees.

The top management has to express the reward to employees as their effort was huge, but it was not enough to meet the overall company goals. They have to provide some special payment to the employees who contributed most or they have to organize a small and cheap celebration party for them as they have to recognize the value of the key employees.

The company underperformance should be announced as soon as possible, the employees should be warned about the potential influence of the business results on their bonuses and they should be allowed to have time to prepare themselves.