It’s Decision Time for Your Compensation Plan

TLDR: Shit or get off the pot when it comes to your bonuses. 

You may not know it yet, but today marks a pivotal moment for your company's compensation plan. It's decision time. You're at a crossroads, faced with a crucial choice that could shape the future of your organization: do you stick with the status quo of giving out bonuses that may or may not accomplish anything at all, or do you embark on a bold new path towards business success?

The era of sign-on bonuses as a dime-a-dozen perk is over. What was once a rare and enticing incentive has now become commonplace, losing much of its effectiveness along the way. It's time to acknowledge the truth: the traditional sign-on bonus no longer carries the weight it once did. It's no longer enough to simply offer a sign-on bonus as a token gesture to attract talent. If you're not willing to go all in and make sign-on bonuses truly valuable, effective, and ROI-driving for your company, it might be time to do away with them altogether.

If you’re really looking to make your sign-on bonuses effective, you may have to pony up a bit more cash upfront. But consider this – would you rather spend $10,000 that doesn’t accomplish anything or $20,000 that gets you the best candidates and the best performance? 

Go all in. Instead of abandoning sign-on bonuses altogether, why not reinvent them? Imagine a sign-on bonus that is not just a one-time cash injection but a strategic investment in your company's future. Picture a sign-on bonus that is designed to attract top talent, incentivize performance, and drive long-term results – all wrapped up with a bow of enforceability. 

To achieve this, sign-on bonuses must be more than just a monetary reward. They should be tied to specific performance metrics and milestones, ensuring that they deliver a measurable return on investment for your company. By aligning sign-on bonuses with your organization's goals and objectives, you can turn them into powerful tools for driving success.

Here’s our recommended 4-step plan: 

1. Make your sign-on bonuses meaningful to you, the employer, and to your employees 
   1. e.g. give a larger, upfront bonus to secure the best talent but tie it to a longer, more enforceable time commitment - $10k may not attract your A-team talent but $20k might, and think of the productivity you’ll get from that star player if you land them
2. Ensure that your employees are gently, but consistently reminded - and make the communication automated (hassle-free!) 
3. Nest your sign-on bonus with a follow-up retention bonus to keep star talent engaged and loyal
4. Ensure employees understand their commitment to you and that there are actual negative consequences for failing to uphold that commitment

So what will your compensation plan decision day look like? Do away with sign-on bonuses because they're no longer effective, or go all in and make them valuable, effective, ROI-drivers for your company? The choice is yours, but remember, the future of your organization may very well depend on it.

Interested in delivering smarter sign-on or retention bonuses that help you nail this 4-step plan for your company? Let’s chat.