A year end bonus can be a powerful tool for reminding your staff that their hard work and commitment and the company’s overall growth and success are closely intertwined. And according to recent Robert Half research, 95 per cent of Canadian companies plan to award year end bonuses this year, with 65 per cent offering higher bonuses than last year.Presenting employees with a financial reward — whether it’s to acknowledge individual, departmental or companywide success — can help bolster retention and even help with recruitment efforts. It can also be a motivational tool for driving team productivity and engagement in the year ahead.A year end bonus can help employees feel like they make a difference at work, and also have a direct and positive impact on their personal lives. So if you’re looking for a way to show your employees how much their contributions are appreciated – beyond, of course, a competitive salary – there is still time to consider giving them a year end bonus.Here are three tips for using financial incentives and other rewards to appreciate and motivate your team members:
No matter what you decide regarding “when” and “how much” to give employees, you also need to make clear “why” you are awarding a year end bonus. And the answer to that question will depend on the type of bonus.A year end bonus provided to all staff that isn’t tied to performance metrics is easy to explain: It’s intended to foster goodwill with employees as well as promote a positive company culture. It’s a celebratory reward that benefits everyone.Employers may also offer one-time bonuses at the end of the year as incentives for individuals or teams working toward a specific project or goal. For example, the company might be planning an ambitious new initiative or project in the months ahead that will require significant time or commitment from the staff. These bonuses are also often structured with specific metrics and milestones attached.The performance bonus, which firms often give to employees following their year-end performance review, is also tied to specific metrics and objectives. The metrics relate to what the employee is expected to do in their role and the value those activities deliver to the business.If a year end bonus is attached to metrics, they should be clearly communicated and tracked — by the employee and their manager — throughout the year. And, of course, when a worker exceeds expectations, those efforts should be considered when determining the year end bonus that team member ultimately receives.
If all staff-level employees are to receive a similar bonus payment, then a group announcement is fine for sharing the news. But if you are distributing an incentive offering such as a performance bonus only to select employees, you’ll want to have private, one-to-one conversations with those workers. Some best practices for this process include:Scheduling a meeting with the employee — separate from the performance review — to discuss the reason for the year end bonus.Explaining how the year end bonus amount was determined and when the employee can expect to receive it. If you previously set metrics for the team member to achieve and tracked and discussed that person’s progress toward those goals throughout the year, this conversation will be straightforward. It’s an affirmation of what you and your employee already understood.Offering your sincere appreciation for the employee’s contributions. (Yes, a year end bonus is nice, but so are encouraging words from the boss.)
What is a bonus payment, if not a reward for all of the hard work your employees have put in over the course of the year? If your business is unable to award a year end bonus to all (or any) team members, there are alternatives to consider.For example, according to the 2025 Canada Salary Guide from Robert Half, half of Canadian job seekers are looking for better benefits and perks than their position, while close to one third want more flexibility. Offering such as schedule flexibility or extra vacation days are likely to be highly valued by your staff.Whatever your decision regarding a year end bonus, be sure your staff members know what to expect. Be transparent and timely in your communication about whether or not the company will reward them at the end of the year — and how those rewards will be decided. And while compensation is always essential for recruiting and retaining skilled talent, it isn’t the only factor. One of the best rewards you can give your staff is support and appreciation throughout the year.
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