A large number of employers are doling out cash to employees for exceeding expectations, hitting project milestones or staying with the company: some 60 percent of organizations issued spot bonuses and 54 percent gave out retention bonuses in 2014, according to a survey by WorldatWork.
According to the results of the latest Dice Salary Survey, roughly 38 percent of tech pros said they received a bonus in 2015.
If you think you deserve a bonus, there may never be a better time to ask for one, according to Tom Wilson, a compensation advisor and president of Wilson Group, which creates compensation plans for companies: “Employers are awarding a wider variety of short-term cash incentives and bonuses to drive results outside the normal business cycle.”
There are different types of bonuses:
Spot Bonus: Many managers are giving employees a lump sum (up to thousands of dollars, in some cases) on the spot for special accomplishments. Some executives will even offer up a list of potential awards at the start of a project in order to boost motivation.
Retention Bonus: If “keeping the band together” is vital to the success of a mission-critical project, a company may be willing to pay as much as $5,000 to $10,000 to keep a key player on the job, Wilson said. (If you’re a tech pro angling for a retention bonus, make sure to focus on the benefits of staff continuity when you make your pitch, so you don’t seem like you’re threatening to quit to inciting defections.)
Project or Milestone Bonus: Milestone or project bonuses are usually awarded to development teams for meeting deadlines and hitting quality benchmarks. Payments vary, but can range as high as 20 percent of the employee’s total compensation depending on the length and complexity of the project.
Here are some tips for planning your pitch and lining your pockets with a few extra dollars:
Dedicate Yourself to a Plan
Asking for a bonus isn’t a time for improvisation or half-measures. Before scheduling a meeting with your boss, sit down and ask yourself how much you want, and how to plan to get it.
Justify Your Request
Remember, a bonus is for achieving extraordinary results, not just doing your job, advised
Kendra Lee, president of KLA Group. Requesting an amount proportionate to the level of contribution increases your chances, as well.
“Be prepared to describe your level of effort, the benefits to the company, project owners or other stakeholders, and why you or your team deserves a bonus,” Lee said. Cite the potential for increased output, quality and motivation to validate a request for a team bonus.
Don’t ask for a bonus because you’re feeling underpaid or under-appreciated, wrote Lewis Lin, CEO of Impact Interview and author of “Five Minutes to a Higher Salary,” who responded to our questions via email.
“Some 90 percent of employees think they have above average performance,” Lin wrote. Clearly, that’s not the case. Seeking feedback from your manager and peers can help you determine whether your performance is truly “bonus-worthy.”
Build a Base of Support
You may need to build a base of support if your company isn’t in the habit of awarding bonuses.
“Referencing success stories from colleagues who’ve received bonuses at other companies and compensation surveys can highlight competitive gaps and garner support for your plan,” Wilson said. “Win over your project leader or IT manager first. Then, shoot for the CFO or key clients to generate political endorsements for change.”
Look for Leverage
If your performance is critical to the success of a major project or the development of a new product, your company stands to gain by paying you and your teammates a bit extra to ensure that things go smoothly. Leveraging proven expertise and a successful track record can give you an edge in negotiations. If you meet resistance, ask for small pool of funds for a trial run or team celebration.
“Most managers recognize the importance of making employees feel valued and supported,” Wilson said. “So linking bonuses to increases in team motivation and job satisfaction can be an effective way to gain your manager’s support for an incentive plan.”