A Fair Share of the profits – Everybody loves a bonus

It’s that time of the year, when managers and employees engage in some necessary conversations: performance reviews, goals and KPIs and probably the most anticipated, bonus entitlements.

Our Great Place to Work TI survey trends show that, most organisations consistently struggle with employees’ perception of receiving a fair share of the profits. This should come as no surprise, since we all want more money and want a fair slice of the profits made as a result of our contributions.

The good news is that many of our Great Place To Work Certified companies and in particular, the best of the best get this right. Approximately 75% of employees in 2022 Aus Best Med and Large Workplaces and nearly 90% in small & micro-sized  organisations agree they get a fair share of organisation’s profits.

Here are some tips on what these great organisations are doing to enhance employees’ experience around bonus or profit share.

Clear Structure

• Is it a percentage of annual profits, or fixed bonus pool?
• What does any individual need to achieve to get a share of the profit/ to be entitled for a bonus? Is it a set amount for everyone? Or is it tied to performance?
• If performance based, what are the criteria? How do individual, team and company’s performance affect the employee’s bonus amount?
• If for a multi-national company, would regional and global performance impact on a local employee’s bonus pool?
• If companies have share schemes, are they accessible by all, or are they different levels of entitlement based on tenure or seniority

Transparent Communication

• Discuss the structure at the outset, typically during planning or goal setting session at the beginning of the business year
• Make sure the bonus/profit share structure and related information is readily available to all employees throughout the year (i.e., intranet; Employee Handbook)
• Inform organisation progress towards target at different times of the year
• At year end, take time to sit down with the employee in a one-on-one conversation to
  explain how they’ve performed against the target and how that relates to the bonus amount

What if we don’t have profit share scheme?

Some in our certified  community including not-for-profits, community  organization and government agencies do not have profit share or bonus schemes. Such organisations can still win the trust of their employees by clearly articulating how are profits reinvested.

What % is dedicated into the community/customers they serve and for business sustainability and growth. Moreover, organisations should explain what is reserved for the employees’ benefits – by way of employee growth and development through learning and development, wellbeing benefits, staff amenities and facilities.

How do these relate to our Trust Index Survey statements?

I feel I receive a fair of the profit made by the organisation

• 87% of employees in 2022 Aus Best – Micro agree
• 86% of employees in 2022 Aus Best – Small agree
• 74% of employees in 2022 Aus Best – Medium agree
• 75% of employees in 2022 Aus Best – Large agree