Employee Bonus

[Pain Applicant1]

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With the holidays coming around I'm wondering what I should bonus my employees. I've been open almost two months and my employees are doing well and so far I'm really happy with them. How much bonus is reasonable for employees around the holidays? Do you automatically give raises and if so, when? Is it around the holidays or at the one year anniversary? Also, how much of a raise is appropriate? What about birthdays?

 

[facets]

The bonus is given according to how long they have worked for me. In your case it does not matter but I have had employees for anywhere between 1 month and 18 years so it does not seem fair to give them all the same. Since you have been open only 2 months give them each 100 bucks. Birthdays, no, they get a cake. Raises are given at 1 year and sometimes after the 90 day probation period.

 

[PMR 4 MSK]

A small token of appreciation at the holidays is acceptable. Some practices go overboard, with large amounts of money or trips. In this economy, small amounts are much more appreciated. Just remember, they count as income and are taxable.

Acknowledge the birthday with a card and a cake. If you want to do more, get a $25 gift card from a local restaurant, $50 if you feel generous, but you'll have to do it for everyone.

Raises should be considered each year, along with the economy. Many practices have frozen salaries for a couple years now. As a newly growing practice, do not set your standard high, or they will expect it. 3-5% is normal 1/year depending on performance. If someone is doing exceptionally well, promote them to a new job that pays more. Keep in mind they will tell each other what they were given, even if you tell them not to.

 

[Tenesma]

1) you don't want to be too generous early on, because it becomes increasingly hard to out-do yourself as time goes on.

2) some gifts don't have to be in cash per se --- i have given people random days off "sanity days" - which they LOVE.

3) i like Mr. M's suggestion of renting a limo and having them go to local mall with gift certificates...

4) i also don't think you should offer raises -- it becomes tricky if some get raises and the others don't... you should have a system that is written that lays out policy behind raises (ie: last years inflation % AND evidence of meeting certain standards (timeliness, tardiness, absenteeism, patient satisfaction, going the extra mile, etc...)... and institute that policy on the 12 month anniversary of each employee

 

[ampaphb]

Some of this is based on your priorities

If you underpay your employees, they will jump ship at the first more lucrative opportunity, and then you will have to invest time and energy training new employees.

I overpay my employees, and have, as a result, never had one leave for economic reasons.

 

[Ducttape]

When i took over my practice a year and a half ago, the staff here were very apprehensive and almost depressed, as the clinic was going to close shop.

they have been wonderfully accomodating and hard working, and have made my life tons easier.

last year, after having been here 6 months, i organized a half day off and bought them all gift certificates for massages/facials at a nice spa. each certificate was for a 1/2 hour treatment, and cost roughly $100 (worked out great as the spa was having a 10% sale).

i plan on doing the same this year.

 

[Tenesma]

i agree w/ ampa... but would point out that higher salary isn't the only thing that is important in the work-place... getting along w/ the other staff is key. it has to be a work environment that has no toxicity in it.

the minute there is a toxic personality or behavior, it has to be nipped in the bud and that person is disciplined or fired.

 

[PMR 4 MSK]

i agree w/ ampa... but would point out that higher salary isn't the only thing that is important in the work-place... getting along w/ the other staff is key. it has to be a work environment that has no toxicity in it.

the minute there is a toxic personality or behavior, it has to be nipped in the bud and that person is disciplined or fired.

I will also add in the caveat to document everything on your employees. Keep a file locked away from them with everything. Every time you have to correct them, document it. Everytime disciplanry action is taken, document it. Every time there is a complaint about them, document it.

For any formal discipline - suspension, major screw up, showing up late repeatedly, etc, have them sign a form acknowleedging what they did wrong and what the consequences are. Never use the term "punishment" with an employee. It can be construed as retribution or harassment.

At some point, an employee will be bad, or turn bad. You will fire them, or want to. And they will threaten a lawsuit. You might need documentation to cover yourself.

We just had an employee I've been trying to get fired for over a year quit. She was toxic, but also friends with part of admin. And her husband is a lawyer. They adjusted her duties, cut her hours, even moved her from site to site and she still wouldn't quit. I had filed at least a half dozen formal complaints about her. Her own boss hated her. But admin refused to fire her. She finally up and quit last week. Sigh of relief. But she apparently sent a text to another employee yesterday "Just wait until they see the lawsuit..."

 

[Pain Applicant1]

But she apparently sent a text to another employee yesterday "Just wait until they see the lawsuit..."

Wow, that's crazy. You gotta be kidding me. Is it really that complicated to fire someone as a small business owner?


Anyhow, as always, thanks for all the helpful advice. You guys/gals are an excellent resource and this forum has given me so many answers.

 

[Tenesma]

there is no good insurance coverage for some of these lawsuits and the insurers will try to wiggle their way out of covering you...

employees can claim all types of discrimination, harassment, etc...

BEST option: clearly state in the contract that the first 30-60 days are probationary - and that all expectations/issues are clearly laid out.

typically you will know within 2 weeks what your future employee is going to be like.

 

[deleted185747]

I will also add in the caveat to document everything on your employees. Keep a file locked away from them with everything. Every time you have to correct them, document it. Everytime disciplanry action is taken, document it. Every time there is a complaint about them, document it.

For any formal discipline - suspension, major screw up, showing up late repeatedly, etc, have them sign a form acknowleedging what they did wrong and what the consequences are. Never use the term "punishment" with an employee. It can be construed as retribution or harassment.

At some point, an employee will be bad, or turn bad. You will fire them, or want to. And they will threaten a lawsuit. You might need documentation to cover yourself.

We just had an employee I've been trying to get fired for over a year quit. She was toxic, but also friends with part of admin. And her husband is a lawyer. They adjusted her duties, cut her hours, even moved her from site to site and she still wouldn't quit. I had filed at least a half dozen formal complaints about her. Her own boss hated her. But admin refused to fire her. She finally up and quit last week. Sigh of relief. But she apparently sent a text to another employee yesterday "Just wait until they see the lawsuit..."

FIRST, KILL ALL THE LAWYERS. Those kind of people make me sick and they are everywhere!

 

[Mister Mxyzptlk]

I spoil my employees. I admit it.

If I have a good quarter I give bonuses. My office manager will often get $1,000 or more and others maybe only $50-100 depending on their position and length of service. I want them to feel that when I do well they do well.

They are often treated to lunch at a local restaurant several times each month, usually Friday afternoon.

Xmas is a limo ride to a fancy mall with $200 in hand, then lunch.

If your kid is sick, take off. If you're sick, take off. There have been days when half the staff was out. We survived, partly because the remaining people were willing to work hard and pick up the slack.

They get COLA raises even though I'm getting decimated on fee cuts. In return they watch every penny for me and work to make the practice thrive.

I think the investment is well worth it. My days in A/R and my collections after contractual write-offs would probably make most of you weep and it's nothing that I have done myself other than hire good people and treat them well.

 

[Mister Mxyzptlk]

I will also add in the caveat to document everything on your employees. Keep a file locked away from them with everything. Every time you have to correct them, document it. Everytime disciplanry action is taken, document it. Every time there is a complaint about them, document it.

For any formal discipline - suspension, major screw up, showing up late repeatedly, etc, have them sign a form acknowleedging what they did wrong and what the consequences are. Never use the term "punishment" with an employee. It can be construed as retribution or harassment.

At some point, an employee will be bad, or turn bad. You will fire them, or want to. And they will threaten a lawsuit. You might need documentation to cover yourself.

We just had an employee I've been trying to get fired for over a year quit. She was toxic, but also friends with part of admin. And her husband is a lawyer. They adjusted her duties, cut her hours, even moved her from site to site and she still wouldn't quit. I had filed at least a half dozen formal complaints about her. Her own boss hated her. But admin refused to fire her. She finally up and quit last week. Sigh of relief. But she apparently sent a text to another employee yesterday "Just wait until they see the lawsuit..."

We do quarterly evaluations. They are written up and reviewed with the employee, who signs it. Signature doesn't mean they agree, just that they've reviewed it and discussed it. Best documentation there is, especially when you have to prove to the unemployment people that the termination doesn't deserve a claim.

 

[Jcm800]

I do the exact same thing. Quarterly bonuses if I have a good quarter. We do spoil our employes because it is impossible to find good help. I am currently looking for an additional employee and I will take no one over what's out there.

my employees, especially as of late have been functioning like a Family and they look out for me b/c I take care of them. We movd offices and they came in on the weekend to pack, they moved some of their own things and others to lesson the move fee, etc. when someone makes 14 dollars an hour how much can it cost me to spoil them, a thousand dollars a year? After it goes through the business and is deducted etc, it's hardly felt by us, but to them, they really feel it and appreciate it.

I hve been using bank and credit card rewards for gift cards to Target lately. I don't pay taxes on it, they don't pay taxes on it, and it's like cash because what do you need that you can't find at target! So they appreciate not paying taxes on it. If your employees suck, then no bonuses, but I have 3 amazing employees, 1 extremely loyal bull-headed works her ass off but is slow employee, and on that is loyal and decent but kinda dumb. They all get along great. But they all do not get the same bonus...



QUOTE=Mister Mxyzptlk;11752651]I spoil my employees. I admit it.

If I have a good quarter I give bonuses. My office manager will often get $1,000 or more and others maybe only $50-100 depending on their position and length of service. I want them to feel that when I do well they do well.

They are often treated to lunch at a local restaurant several times each month, usually Friday afternoon.

Xmas is a limo ride to a fancy mall with $200 in hand, then lunch.

If your kid is sick, take off. If you're sick, take off. There have been days when half the staff was out. We survived, partly because the remaining people were willing to work hard and pick up the slack.

They get COLA raises even though I'm getting decimated on fee cuts. In return they watch every penny for me and work to make the practice thrive.

I think the investment is well worth it. My days in A/R and my collections after contractual write-offs would probably make most of you weep and it's nothing that I have done myself other than hire good people and treat them well.[/QUOTE]

 

[PMR 4 MSK]

I hve been using bank and credit card rewards for gift cards to Target lately. I don't pay taxes on it, they don't pay taxes on it, and it's like cash because what do you need that you can't find at target! So they appreciate not paying taxes on it.

How do you purchase the cards? With corporate money? That's pre-tax and to give it to anyone means they owe the taxes on this. If you are audited and they see bank/store gift cards purchased, they are going to want to know where they went. Without documentation, the assumption will be you used them yourself and are essentially embezzling your own money in an attempt to hide it from taxes. IF you tell them they went to employees, they will see that as employee tax evasion and go after both of you.

With your personal money? That's post-tax and, as I understand it, is exempt up to $11K/year per person. But the tax has already been paid on the money by you.

 

[Jcm800]

How do you purchase the cards? With corporate money? That's pre-tax and to give it to anyone means they owe the taxes on this. If you are audited and they see bank/store gift cards purchased, they are going to want to know where they went. Without documentation, the assumption will be you used them yourself and are essentially embezzling your own money in an attempt to hide it from taxes. IF you tell them they went to employees, they will see that as employee tax evasion and go after both of you.

With your personal money? That's post-tax and, as I understand it, is exempt up to $11K/year per person. But the tax has already been paid on the money by you.

its credit card points, so its post-tax i guess... there is never any purchase of it...they can be gifted without tax from what i understand

 

[Tenesma]

technically any form of perk/benefit must be listed on their w-2.... and that includes gifts/awards, etc...

the idea of doing it w/ credit card points is interesting because it is hard to trace - but technically should be included on their w-2.

at least they don't have to pay FICA on it.

 

[Mister Mxyzptlk]

When is it a gift and not compensation? Suppose we just call the first $10,000 in pay a gift and make it tax-free? And another $10,000 gift from your spouse.

 

[PMR 4 MSK]

When is it a gift and not compensation? Suppose we just call the first $10,000 in pay a gift and make it tax-free? And another $10,000 gift from your spouse.

Have a few kids and even your office manager can work tax-free!

 

[Tenesma]

only one problem Mister M... gift money is post-tax dollars - so you already have paid tax on that amount...

and then if there is ever an employment lawsuit - the question will be "why did you pay the employee out of your personal funds? were you trying to keep the employee quiet about something?..."