A plaque, catered lunch, gift certificates – when it comes to employee recognition, many traditional programs have high cost but little cultural impact. One distinctive solution Fusion employs with regard to compensation is the practice of merit pay. Like some companies, Fusion bases employee annual increases on performance or merit. However, Fusion’s approach to merit pay does not stop with annual increases. In addition to annual merit based increases, Fusion supports on-the-spot bonus rewards when employees perform above and beyond expectations. Employees are not limited to a once-a-year increase in pay based on merit. On-the-spot compensation may occur repeatedly throughout the year. This contributes to a culture of confidence that breaths accountability in a natural, unforced way.
Below please find three tips on implementing a successful spot bonus program for your manufacturing team:
- Connect the dots. Spot bonuses are a powerful tool to emphasize the connection between individual performance and company performance, commonly referred to as “line-of-sight”. Fusion employees engage in exceptional behavior at an increased rate due to our established culture of consistent recognition and acknowledgment of the value they bring to the Company. Creating continuity between our vision, strategy, and Core Values builds employee accountability. Spot bonuses reinforce this behavior by ensuring our employees know exactly how going above and beyond drives the bigger picture.
- Use the element of surprise. One of the reasons our spot bonuses are so effective is that they are awarded to the employees on the fly. Department Managers find that providing a tangible thank you for exceptional behavior is extremely rewarding for both them and their employees. Adding the element of surprise – by varying the time of year, time of day, and the recipient – is a surefire way to increase morale and engagement.
- Involve management. Our monthly Fusion peer-to-peer bonus program, entitled the “Rockstar Program,” is entirely based on employees voting for their peers without the input of Management. Employees are asked to consider the employee that best exemplifies our Core Values and nominate them for consideration. In contrast, our spot bonuses are a direct result of input from Department Managers.
Further, our management team meets with me and our COO quarterly to review employee performance, make recommendations and discuss improvements. Spot bonuses are an essential element of this meeting, and the benefits are twofold. First, it provides a structured method for top-down recognition. Secondly, it reminds employees that their performance evaluation is an ongoing conversation, not just an annual event.
Fusion believes that monthly and yearly recognition programs can be valuable means to recognize employee accomplishments but no method of employee recognition is better for retention, morale and engagement than on-the-spot recognition. When an employee can connect their performance with their impact on the company vision, values and strategy, they are much more likely to adopt a stewardship mindset. Spot bonuses reinforce this behavior and are one of the many ways we reward our team.