Christmas can be an expensive time of year, particularly amidst the current cost-of-living crisis. Rewarding staff with a seasonal bonus is a great way to show your appreciation and motivate employees.
Studies have concluded that around 33% of British workers have never received a bonus. Many believe that with cutbacks and the current financial climate, bonuses may be a thing of the past.
Legalities surrounding bonus payments
Whether or not a business is legally required to pay a bonus depends on whether the bonus is discretionary or a contractual right.
Employee rights to a bonus may be written into their employment contract. If this is a guaranteed amount, you are legally obliged to pay this and you will be in breach of contract for failing to do so. This can only be waived with the consent of the employee.
A discretionary bonus has no legal standing and can be paid to some or all employees, so long as the practice uses fair, non-discriminatory, and objective criteria.
Specialist legal advice on employment contractual obligations should be sought in relation to employees with protected characteristics, such as women on maternity leave and those on parental leave.
Business Coaching
A business coach can assist greatly in determining issues surrounding bonuses and staff motivation. They may be able to assist with financial planning, to establish whether discretionary bonus payments are financially viable. Or they may be able to work with a business to come up with alternative ways of motivating and retaining staff.
To view the full range of services offered to businesses by a Stroud business coach, visit www.randall-payne.co.uk/services/business-advisory/business-coaching.
Employee motivation cultivates a positive working environment, conducive to staff retention and increased workflow, therefore the issue of bonuses and other incentives should be considered carefully.