How to Grade Employees on a Bonus Program

by Carol Deeb
Some employee rewards require little or no cash.

Some employee rewards require little or no cash. Images

Offering bonuses to your employees can motivate them to perform at their optimum level. As a small-business owner, budgeting for rewards can pay off by improving your staff's morale and encouraging increased productivity. Depending on your company's goals, your system for grading employees for bonuses should reflect activities that are important to your revenue and income.

Appraisal Rating

Grading employees based on their overall appraisal ratings can ensure that job standards are consistently met. Your performance-review system may rate employees for each job duty and give an overall ranking, such as outstanding, above satisfactory, average and below standard. Your bonus program can reward employees whose overall ratings are higher than average. To ensure consistency, train managers on assessing employees and review appraisals so that one supervisor does not rate higher than another for the same level of performance. Once your system is in place, offer monetary bonuses, days off with pay, gift cards, spa treatments or other motivating rewards.


Quotas are goals for employees to reach and are usually used for sales personnel. Your sales staff may find new customers by prospecting their territories or by selling to people who call your office. If you own a storefront, the representatives service customers who visit your shop. Regardless of the type of selling they do, employees should be given a quota for realistic expectations of their productivity. Other types of quotas, such as manufacturing output, also exist. List quotas that employees are expected to achieve on their job description or contract, and bonuses can be given for meeting or exceeding goals. Develop a program that rewards employees at different levels based on the percentage by which they surpass their quotas.


If you own a business with essential deadlines to meet, your employees can be motivated to focus on completing a project if they will be graded for bonuses based on when they finish. If projects are assigned to teams of employees, then the group is graded as a whole. Individual staff members who complete their portion of the assignment on time cannot receive a bonus if the entire team missed the deadline.


If you have employees who perform duties that cannot be graded by a program that you develop, such as the clerical or part-time staff, institute a different bonus program for them. For example, give rewards to those who have the highest attendance rate or who invent the best time- or money-saving idea. Your support employees perform duties that aid the professional staff in generating revenue, so show your appreciation with a small but significant act of appreciation, such as taking them to a special lunch. Including your entire office in a bonus program keeps your business running smoothly and your valuable employees happy.

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