Have you ever been given a raise or a bonus by an employer? Few things can make you feel more valued in a workplace. As a business owner, you can give out rewards, holidays and do all the team-building you like but nothing will inspire your staff more than extra money in their pay packet. So what is the best way to do it? Below, we discuss if you should give out a raise or a bonus.
Let’s see the different pros & cons of raise or a bonus
Pros and Cons of a Bonus
The biggest advantage of giving out a bonus is that they are more manageable. You can decide how much you can afford and offer it, as opposed to a raise which is a recurring cost. It also gives a certain level of flexibility. If the business is not doing well, then bonuses can be lowered or stopped entirely.
As a business owner, don’t just limit bonuses to employees either. They can be used to bring in more leads, especially when used effectively. The online gambling industry has been using the concept of a casino bonus to maximum effect, often matching the funds people put into the service. In a competitive marketplace, this has spurred the whole industry on with many casinos flourishing as a result. When this is done with your employees, you can create incentives within the workplace. Bonuses can be a way to reward productivity, such as bringing in more leads or producing more units.
The main drawback to a bonus is that they need to be used thoughtfully and sparingly. Once your employees come to rely on them, removing them can cause dissatisfaction in the workplace. Instead, create a culture where they are seldom given out but are worthwhile when they are.
Pros and Cons of a Raise
A raise is a great way to ensure your staff are valued. If you have top-tier talent and are worried about them going elsewhere or even worse, to competitors, then a raise is a great way to keep them in the office. Even better than this is an annual raise, so that pay goes up a small amount every year of a person’s employment. The more they know about your company and the more valuable they become, the more likely they are to stay.
The tricky part of a raise is working out how to deploy it. Even a small increase in a monthly salary can become a large chunk out of the payroll, especially in companies with smaller turnover. It can also look insulting to offer smaller amounts.
Employees may also be disgruntled if they find out one person has a raise and others do not. To counteract this, some companies may give a small company-wide raise each year. However, if you plan accordingly because the increase is steady, it remains manageable.
Once you have decided which is best you just have to decide on the right amount. This is dictated by the company finances but no matter how much, it is sure to be appreciated by your staff and ensure the formation of a tight-knit team who value their employers.
