Companies Fine-Tuning Bonus Plans
December 2, 2008
According to an article published by the Human Resource Executive Online, four in 10 companies report that they are very likely to respond to the economic crisis by cutting travel and entertainment spending, one in three companies said they are very likely to freeze or reduce hiring, and one in six said they are likely to reduce bonuses. Human resources insiders say that in the current economic downturn, companies are emphasizing the retention of key personnel, as opposed to slash and burn tactics that have reigned in other crises. It is a good sign, insiders report, that many companies are planning to meet their existing bonus commitments to employees as they wrap up this difficult year.
Insiders advise that what is best practice during normal times becomes critical during an economic crisis in order to maximize the effect of all money expended on employee bonus plans. Included in these best practices are effective performance-management programs and close monitoring of employee communications so that employers may resolve any misperceptions within the workforce before negative consequences emerge.