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It is the duty of management and it is only fair to consult with the staff at the earliest possible moment, to warn them of this possibility that bonuses may not be paid or may be reduced this year, or if necessary take the extreme precaution of informing staff categorically that no bonuses will be paid for that year.

If it is later possible to pay the bonuses, then it will be a pleasant surprise for all employees. That kind of thinking is irresponsible and it does not solve the problem, it only postpones it until next year.

If employers cannot be fair to their employees with regard to the payment of benefits that employees have right to expect, either contractually or otherwise, then the employer cannot expect those employees to be fair to him.

There is no greater impediment to productivity in this country than disgruntled employees. The performance bonus. A performance bonus can also be paid as a lump sum to a department, and split up in equal amounts to each employee in that department.

This would apply in the situation where all employees in a particular department are collectively responsible for above-average performance.

The performance would be measured against laid down company standards, but the bonus would not be paid only for the occasional work done which exceeds company standards, but for consistent work exceeding company standards.

This means that line management and the shop foremen and even supervisors have to become much more closely involved with the monitoring of performance on the shop floor and careful records must be kept.

In a situation where the results achieved by a department depend entirely on the collective effort of all employees in the department, the amount of the bonus could be calculated on the basis of a percentage of profits achieved over and above what was budgeted for, or as a percentage of the total profits generated by the department and so on.

Whatever the case, the method of calculation must be fair and equitable. The production bonus. The production bonus is based, not on performance measured against company standards, but rather on production measured against targets.

Measurement is also based on quality of production. In other words if the company has set a target for one particular employee or, for that matter, for a particular department to produce widgets per hour, and the employee or department consistently produce widgets per hour, then a production bonus would be justified.

It must be admitted that the additional production and the reduced rejection rate can only mean good management within the department, and it can only mean a genuine interest in the job by the employees, thus generating additional profits for the shareholders.

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