The company wants a lot of effort from its employees. The managers demand to have many aspects in the remuneration scheme. Without being limited and navigated by the HRM Function, the bonus schemes in the organization can get very complex and losing its main goal – to support the productivity in the organization.
The bonus scheme has to be kept as simple as possible. The one page bonus scheme produces better results than the complex scheme, where the employee can see a lot of processes in the organization influencing the target bonus level.
The employees like to see the immediate performance result being translated into the language of money. The managers like to see many translational layers between the performance result and the bonus being paid. They feel they have more influence on the performance of the employee, but in reality, the employee feels lost in the bonus scheme and having no direct impact on the level of the bonus.
The HRM Function has to have knowledge and the power to influence the managers, when the new bonus scheme is developed for the organization. It is a very difficult task, as the HRM Function has to demonstrate the knowledge of the business, products and processes in the organization to tick the most important aspects.
The bonus scheme has to support the main objectives of the company; it is not a managerial tool, which saves time to managers in managing employees. The bonus scheme is supporting the effort of managers; it is not a super manager.
