How to Announce and Go About Bonus Payments

Payments and compensations can be a difficult topic to bring up amongst employees. The whole idea of putting one’s efforts into a figure of currency can prove to be a struggle for employers. A survey done by the compensation research firm PayScale, found that 73% of company leaders “do not feel very confidence in their managers’ ability to effectively communicate with employees about salary related issues”. As difficult and as much of a struggle as it may be, these conversations tend to be “the most important conversations you have throughout the year” –V. G. Narayanan, professor of business administration at Harvard Business School. Here are some ways one could carry out these situations.

Explaining Early and Often

Employers should discuss and explain the terms and conditions of salary related aspects early on (beginning of the year or before an employee starts working). By doing this, it lessens the chances of having employees feeling surprised and confused on a company’s procedure and conditions. Explaining early on also creates awareness for employees as they can then create goals and understand what is expected to achieve these goals, as well as what can be received by doing so.

Giving Enough Information

Employees may feel discouraged and disappointed upon learning about their raise or bonus. Most of the time, it may be because they lack information and context. Stating facts on how the company or employee is performing would be a good way to start. Employees should be given an understanding on how the company is performing compared with other competitors.

Apart from that, explaining how decisions are made regarding the amount of the salryis also helpful. Showing the ups and downs of employee performance will give employees a better understanding on what they did right or wrong, thus lessen the chances of having disagreements and misunderstandings.

Conduct Performance EvaluationsBefore Initial Discussion of Salary

Employers give compensations to employees that perform well. However, evaluations on performance should always be done separately. V. G. Narayanan said that a formal evaluation should first be focused on, before the initial conversation of salary occurs. Focusing first on personal growth, development and an overall background on the employee would be the proper step before going to the part where one would deliver news about raises or bonuses.

Expect Challenges

There are several scenarios where employers will face challenges upon discussing the salary raise or bonus. The employee could disagree with the amount he/she receives, the employee might disagree with the employer’s evaluations and comments, or an employee may wish to know how much other employees earn in their raise. These are just some of the many possible challenges employers might face. It is always a benefit to be ready for such challenges and have a well thought up plan to avoid such confrontation.


In conclusion, though discussion about salary can be a difficult thing for most employers, it is still a topic that a manager should be ready to do. Always being aware on the amount of information and context that is given to the employees will lessen the chances of having to repeat oneself and have miscommunication. As far as compensations and bonuses go, employees should always have an understanding and a detailed view over how the company is performing, to really get a deeper understanding as to what the numbers mean with respect to their salaries. This is the task of management, to make sure the message is clearly sent across from one party to another.

Brodie Bavidge