What is the best way to maintain and reward top employees and contractors.

As the owner of a small business you have put your life savings in keeping effective employees without 'giving away the farm' is key to manage your greatest value Human Capital. Here are some keys I have found helpful over the past 20 years.

1) Does an across the board bonus plan work?
Developing a bonus plan is an across the whole company may not work. You may think this is the easiest and fairest way to share the profits. The fact is, there is nothing fair about the equal treatment of unequal performance. This type of plan sends the wrong message to both under performers and your top performers. Your bonus plan should send a message about what your organization values. You get what you reward.

2) Tie contributions and goals to corporate objectives
Distribute gains through bonuses that reward actual goal attainment. When the team and individual goals are directly linked to corporate objectives and values, everyone wins.

3) Bonus base on cultural goals and profit goals
Culture and company core values shape the brand of the company. These attributes can be rewarded. In addition tie in reward to profit. Be as transparent as you can to ensure employees and contractors understand general profit goals and whether you have achieved them.

4) Communicate the expectations
Next step, is communicating these goals to your employees and explain that their bonus levels are directly tied to the attainment of these goals. To encourage a team environment, a portion of the bonus should be awarded based on team accomplishments. Share both good and poor experiences. It goes a long way to build trust.