Holiday bonuses can be a great way to spread some cheer, motivate your employees, and show your appreciation for your team’s hard work. If you have a little bit extra to spare this holiday season, it’s time to get creative.
Of course, everyone appreciates a little extra cash, especially around the holidays, but what if you changed things up by introducing a bonus that carries over into the new year? A ‘betterment bonus’ is a creative type of holiday bonus that encourages growth and personal development. Employees design a project to improve themselves or the world around them, and their holiday bonus (or part of it) is used to fund that project.
Interested? Below explains why you might want to consider offering a betterment bonus and what you can do to create one at your company.
What Is a Betterment Bonus?
A betterment bonus is a regular bonus – with a few strings attached. The money can’t go toward just anything. Instead, this type of bonus is meant to help employees do something for themselves, for other people, or for the world in general. In other words, your employees have to spend this money on something enjoyable and enriching.
A betterment bonus can go towards a wide variety of different activities. If you establish this type of bonus at your company, you can set some ground rules about what kind of personal projects the money can be used for. Ideas include:
- Learning a new skill like playing an instrument, speaking another language, or becoming an amateur chef.
- Taking a trip to learn more about their family history.
- Volunteering, either in your local community or abroad.
- Meeting an athletic goal like training for and running a marathon.
Most companies who offer a betterment bonus also ask for a short presentation describing what the bonus was used for and why it was impactful. It’s an exercise in reflection, but also a way to bring new perspectives and ideas into a company.
Why Offer a Betterment Bonus?
Offering a betterment bonus instead of a traditional bonus isn’t just good for your employees. It can also be good for you. Here’s why a betterment bonus is an all-around win for your business culture.
What is a Betterment Bonus?
For your employees, this type of holiday bonus could mean having a rare (and guilt-free) opportunity to do something for themselves. Many people drop their hobbies or put off pursuing their dreams once they’re working adults, figuring that their time and money are better spent elsewhere. This might seem like a practical mindset in the moment, but in the long term, it’s bad for people’s overall happiness and well-being. Giving your employees a betterment bonus will help them stay well rounded and enjoy their time outside of work.
You’ll be able to feel great about encouraging your team to achieve their personal goals, but that’s not the only way offering a betterment bonus will help you. Positive, fulfilled employees make for a thriving business. It’s no secret that people are most productive and creative when they’re happy. Your employee loyalty will probably increase, and if people share updates about their projects at the office, it could create a more tight-knit work environment. If your company’s culture is right for it, there’s really no downside to offering a betterment bonus.
How to Establish Your Own Betterment Bonus
If you already give your employees a holiday bonus, creating a betterment bonus probably won’t be too difficult (but you may need to increase bonuses slightly to get everyone on board). If this is the first year you are giving out bonuses, you’re set! The biggest part of the change will involve sharing the idea with your team and getting them on board with their personal projects.
1. Get the Financials Right First
First, consider how a betterment bonus fits in to your company culture. Does it make sense for your workplace and your team? Is there a particular angle you’d like to take with this bonus? For instance, maybe you’d like to encourage your employees to travel or to do some kind of service work.
Think about how much money you can put towards each bonus. It may be a good idea for everybody to get the same amount, to prevent hurt feelings or jealousy, but this can vary from company to company. If you already give end of the year holiday bonuses & employee recognitions, it should be easy to figure out how much you can spend on each employee.
2. Consider Running a Small Test
Next, talk to your team about the idea of a betterment bonus. Tell them you’d like to thank them for their contributions this year by helping them gain a new skill or make some lifelong memories. Emphasize that they can choose their own projects, and those projects don’t necessarily have to be related to work.
If your employees are excited about the prospect of getting a bonus for self-development, an optional but good idea is to do a small test-run of the idea before you devote an entire holiday bonus to it. At the end of a particularly good quarter, give each employee a small bonus to spend on a hobby or an experience. Afterwards, ask them to tell the rest of the team about what they chose to do. If your test run is a success, your employees will probably be fully on board with the plan and eager to choose their next project.
3. Ask Employees to Pitch Their Ideas as Part of the Bonus
Then, around the holidays, create a schedule for your employees to pitch their project ideas to you. Encourage them to think big and to focus on how their project will help them improve. If you want to set any rules for what the bonuses can and can’t be used for, this is the time to bring those up. Once everyone’s projects have been approved, consider having your employees share their plans with the entire team, so that the whole office can cheer their co-workers on throughout the year.
4. Check in with Employees Mid-Year
Lastly, check in with your employees regularly throughout the year to see how their projects are coming along. At the end of the year, set aside a day or two for your team to share their progress and discuss how their experiences helped them improve in some way. If the first year was a success and you want to do it again, encourage your team to start thinking about next year’s projects.
A betterment bonus can be a unique and memorable way to thank your employees for all their contributions over the course of the year. It shows your team that you care about them as people, both inside and outside the office, and it helps your team bond over something besides work. You might even see your employees’ productivity and morale go up. A betterment bonus doesn’t have to cost you anything more than a traditional bonus, but it’s great for your whole company.
How do you handle holiday bonuses? Would you consider creating a betterment bonus at your company?