Reward programs are one of the hardest things to implement in a business. And the reason for that, sometimes people have no idea what they’re actually doing to have an impact on the overall business and the profits. It’s easy to just, hey, the business is up this month, let me give you a cash bonus. Christmas time comes around, I’m going to give you a cash bonus. What happens in those situations? Well, it’s here and it’s gone and a lot of the times that person has no idea what did they actually do, what behavior did they do to get rewarded for the business doing better?
And oftentimes, you know, people will get in a spot to where they are being rewarded and then they want an expectation again of getting rewarded again and then the next month if they don’t get anything, well, they might get demotivated, there might be certain things along the way to where they get discouraged because they don’t know what to do to enhance their ability to earn that reward. So the best thing that we can be doing with reward programs is finding individuals or there can be groups of people that we can be able to target and it’s more of like a month by month or quarter by quarter where it can be monetary, where there is cash involved or it could be non-monetary where there’s some sort of an experience or something offered to them in exchange for them reaching their goal.
And the trickiest part to this is that most of the time, businesses are not very privy to understanding what options or what things they should be focusing their attention on to improve profits in a business. So for instance, let’s say that you are a service-based business where, well, I have appointments that get scheduled, and then the goal is after a year, I want them to come back again.
Well, the person that could be in control of that, of getting them on the calendar, would be the person at the reception, someone in the front desk. If this something where the business struggles, well, every time that person goes to check out, they’re collecting the payment, that person by default is saying, hey, let’s get you on the calendar for your next visit. There’s still gonna be good amount of people that reschedule, maybe they cancel, but the goal here is that the more people that reschedule, well, the more people will show up, which will then hopefully keep profits up, maybe increase profits.
And for that person actually doing that continuously, well, they get rewarded for it. Another thing could be is, well, if I’m offering a certain service and let’s say that I’m a veterinary practice is the best example here, that there’s a certain treatment that can be offered to everyone. And every time the technician goes in there and offers that treatment that goes towards their goal. Granted, not everyone is going to do it, but the more people would if they are maybe presented with that opportunity, they have a direct tie to how they can improve the profits of the business. The best place to start with this is you should be looking for a consultant that can get into your nitty gritty into the weeds of your business. And the most formal terminology they call them are KPIs, key performance indicators. There’s some areas where you might be doing really, really well. And then there’s some areas where your business is dragging. And the spots that you’re really dragging is we want to be able to hone in on one or two things.
And then there could be different people focusing on different things or groups of people focusing on different things. But the goal here is to how do we keep juicing up profits? So then they know where they actually impacted the results of the business. They know where it helped the profits of the business. And now they can actually be able to do it again the next month. And you can still give out Christmas bonuses and monthly bonuses, but they’re not gonna have the same impact.
If you want to talk about this further, reach out to us. We’d be happy to set up a time to talk with you a bit more.
Video Summary:
Many business owners hand out bonuses with good intentions—around the holidays, after a profitable month—but without a clear link to performance, these rewards often fall flat. Employees might appreciate the cash, but they’re left wondering what they actually did to earn it. Worse, irregular or unclear rewards can lead to confusion, entitlement, and even decreased motivation.
A successful reward program ties incentives directly to actions that improve business outcomes. Whether it’s a front desk team rebooking appointments or a technician offering a high-value service, the key is identifying measurable behaviors that drive profit. These are often tied to KPIs (key performance indicators), and the most effective programs are structured around achievable monthly or quarterly goals—monetary or non-monetary.
Want your bonus program to actually move the needle? Focus on clarity, consistency, and aligning rewards with results. Need help creating one? We’re here to dig into the details with you.
This material is intended for general public use. By providing this content, Park Avenue Securities LLC and your financial representative are not undertaking to provide investment advice or make a recommendation for a specific individual or situation, or to otherwise act in a fiduciary capacity. Guardian, its subsidiaries, agents, and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation. Tom is a Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS). Securities products and advisory services offered through PAS, member FINRA, SIPC. Financial Representative of The Guardian Life Insurance Company of America® (Guardian), New York, NY. PAS is a wholly owned subsidiary of Guardian. Florida Veterinary Advisors and The Next Step Planning Group are not an affiliate or subsidiary of PAS or Guardian. California Insurance License #0K80141. AR Insurance License #15823672. Florida Veterinary Advisors is not registered in any state or with the U.S. Securities and Exchange Commission as a Registered Investment Advisor. The individuals associated with Florida Veterinary Advisors do not maintain specialized licenses or qualifications for the financial services provided to veterinary professionals. 7989827.1 Exp 5/27