By Kate North

Remote working has become a staple for many organizations and professionals across the world, allowing for a better work/life balance, higher productivity and greater efficiency. However, with the increasing cost of living, remote workers are facing many financial challenges. One report in 2023 found that 48% of companies have lowered pay since the pandemic. Even if their pay has remained the same, professionals feel like it isn’t stretching as far due to the increases in the price of food, fuel and energy.

As individuals and businesses alike feel the pinch, one solution to help offset the burden is to offer great performance-based bonuses. In this short guide, we explore how performance-based bonuses can be a lifeline for remote workers.

Benefits of performance-based bonuses

There are multiple benefits to receiving a bonus as a remote worker, which also extend to benefiting the business itself. These include:

Financial relief for low-income households

The most obvious benefit to receiving a bonus is immediate financial relief. This can help employees offset the rising costs of inflation, and provide an extra financial buffer to allow them to manage their daily expenses. Though remote workers often don’t have to worry about commuting costs, the strain of affording to survive is a constant worry – especially for junior members of staff or those on lower wages.

In April 2024, only 27% of Americans on low-income salaries said they were able to live comfortably on their current income. And while some lower-paid employees working in-person roles – such as those in the hospitality industry – can rely on tips to supplement their income, remote workers are unlikely to receive any compensation above their standard salary.

More motivation and higher productivity

Knowing that exceptional performance can lead to financial rewards also encourages remote workers to stay engaged and maintain high productivity levels. This will help to push the top line and grow the business as a whole. Plus, bonuses serve as a wonderful way to recognise and appreciate employees with tangible rewards for the hard work and dedication they put into their roles.

Boosted morale and job satisfaction

Feeling appreciated by receiving financial incentives can significantly boost morale and job satisfaction among all employees, remote or on-site. Of course, there are other ways to show value to employees, but such a tangible reward as money is never going to be ill-received.

Higher skilled workers and a thriving business

Offering performance-based bonuses drives employees to improve their skills and take on more challenges, fostering professional growth and ultimately raising the performance of the business as a whole. When team members are driven to do their best, business owners reap the benefits tenfold, boosting their output and results which in turn help the business grow and thrive.

Increased retention rates

By tailoring performance criteria to fit individual roles and contributions, remote workers can focus on areas where they excel, and companies can benefit from higher employee retention rates. The Consumer Technology Association found that 88% of companies view incentive compensation and bonuses as key to retaining employees. The cost of recruiting new employees often outweighs the cost of rewarding existing workers, so it’s definitely something worth considering to help cut costs in the long run.

Ambitious employees need to feel like their careers are progressing, and offering performance incentives acts as a reassuring way to pay them back for their loyalty. Feeling valued in this way comes back full circle and further boosts motivation and productivity. As a result the business itself will grow from the top level through to the bottom.

How to offer effective performance-based bonuses

It’s clear that implementing a performance-based bonus system can not only enhance employee satisfaction but also improve overall business outcomes – so, how could you implement them?

Transparent criteria: It’s crucial to have transparent criteria for any bonus targets. The criteria need to clearly outline the performance metrics used to determine any financial rewards, to ensure fairness and avoid any misunderstandings or conflict in your teams.

Feedback: Providing continuous feedback and support to remote workers is key in helping them reach their goals. Leads and managers should understand their employees’ progress and which areas they need to improve in order to receive any bonuses.

Regular reviews: While performance-based incentives can go a long way to keeping the top talent satisfied in their roles, it’s important to regularly review employee feedback and results individually. This will ensure that top performers are also recognized and rewarded with promotions, where appropriate.

Win-win

Performance-based bonuses present a win-win situation for both remote workers and employers, offering financial relief, boosting morale, and fostering a culture of achievement. For businesses of any size, these bonuses can also be an effective tool in talent management and organizational growth.

About the Author

Kate North has worked in the corporate landscape for many years, so understands the trials and toils of balancing the tasks of keeping employees happy whilst also growing a business. She also enjoys water colouring and cold-water swimming when she isn’t supporting ambitious professionals and entrepreneurs.