As a diversified city in Hong Kong, the service industry has always been one of the important pillars of its economic development. The service industry often faces fierce competition, with major brands seeking to bring their products and services to the forefront of the market. In this case, retaining “talent” is the top priority, and providing employees with competitive salaries is one of the ways to “retain talent.”
However, the bonus calculation has always been a service industry’s pain point, which involves multiple variables. Factors such as employee sales, department, position, etc. will affect the calculation of bonuses. Some companies have also introduced stepped and proportional bonus calculation methods, making it difficult to accurately calculate bonuses.
This article will discuss how to accurately calculate bonuses for the service industry and see the efficient solution that Workstem’s one-stop human resources management system provides you!
How is compensation typically structured in the service industry?
In Service industry, the salary usually consists of basic salary, bonus and other components. Basic salary is an employee’s fixed income, while bonus is additional compensation that fluctuates according to the employee’s performance. It is usually calculated based on sales or position and is allocated to employees according to a certain proportion. It accounts for a large part of the salary of service industry employees. Some companies even adopt a pure bonus system.What are the pain points in calculating bonuses in the service industry?
- Various calculation methods and high complexity
Since the sales performance of the company and the sales contribution of employees are different, the formulas, proportions, and gradient settings for calculating bonuses will also be different.
- The data is complex and accuracy is difficult to guarantee
Bonus calculation involves a large amount of data, such as sales volume, number of units sold, sales profit, etc. These data are overwhelming, and their accuracy directly affects bonus calculation results.
- Calculating manually or using traditional methods is inefficient
Calculating bonuses using traditional methods such as manual or Excel will undoubtedly require multiple calculations and checks. If the calculation is incorrect, the table will need to be modified repeatedly, which is time-consuming and labor-intensive. More seriously, it will affect the interests of employees and may lead to unnecessary labor disputes.
Have you also encountered the above problems? How exactly can bonuses be calculated accurately and efficiently?
How to accurately calculate bonuses for the service industry?
Let’s take a look at the following service industry cases. Workstem will give you an in-depth understanding of bonus calculation in the service industry.
The company is a pet hospital. For different departments and different positions, they receive different proportions of bonuses, and thus the bonus amounts they receive are also different. The bonuses for different departments are composed as follows:
|
Department name |
Bonus composition |
|
Retail sector |
SchemeA,SchemeB, SchemeC, SchemeM1 |
| Beauty department |
SchemeC, SchemeD, SchemeE SchemeM2-tier1, SchemeM2-tier2 |
| Pet Care Department |
SchemeC, SchemeF, SchemeG1, SchemeG2, SchemeM3 |
The pet hospital’s bonus-applicable departments and positions and their bonus ratios are also different, as shown in the following table:
| Bonus name | Applicable departments | Applicable positions |
Ratio start |
|
SchemeA |
Retail | Store Sales Supervisor and Brand Representative/Senior Brand Representative/Brand Representative Trainee | 80%~110% |
| SchemeB | Retail | Store Sales Supervisor and Brand Representative/Senior Brand Representative/Brand Representative Trainee |
80%~110% |
|
SchemeD |
Grooming |
Pet Stylist/Department Head/Senior Pet Stylist/Pet Stylist/Pet Grooming Assistant & Shop keeper | 68%~101% |
|
SchemeF |
Pet care | Pet Caretaker/Senior Pet Caretaker |
75%~110% |
|
SchemeG1 |
Pet care |
Store Department Supervisor | 75%~110% |
|
SchemeG2 |
Pet care | Store Department Supervisor | 70%~120% |
|
SchemeM1 |
Retail | Store Shop Manager and Brand Representative |
85%~110% |
| SchemeM2 | Grooming | Department Head/Senior Pet Stylist |
85%~110% |
| SchemeM3 | Pet care | Store Department Supervisor |
75%~110% |
Calculate the bonuses that employees should receive after their services in different departments, different positions, and different stores reach a certain percentage of the target value for the month.
If there is only this one position, HR may be able to control such a large-scale salary calculation, but if there are multiple positions and multiple departments, and the salary calculation standards are different, it will be a huge workload!
Referring to the above cases,In order to reduce bonus calculation errors and improve work efficiency, pet hospitals can summarize some methods to calculate bonuses efficiently. Here are some suggestions:
- Establish a clear bonus policy
Establishing a clear bonus policy can help employees understand bonus calculation methods and standards and reduce misunderstandings and disputes. The bonus policy should include bonus calculation methods, bonus proportions, bonus settlement time, etc., such as the different bonus calculation methods mentioned above.
- Develop a clear bonus calculation formula
Bonuses can be calculated based on sales, review ratings, profit margins, or other metrics. When determining how bonuses are calculated, the specific circumstances and business requirements of the service industry need to be taken into account. Companies should formulate a clear bonus calculation formula based on their own sales performance and employees’ sales contributions, and communicate it with employees to ensure that employees understand their sources of income.
- Use professional automation tools
A sound data collection and management mechanism is to ensure the premise of accurate calculation, and using automated tools can greatly improve the accuracy and efficiency of bonus calculations. For example, the Workstem human resources management system can automatically manage attendance, instantly record lateness, early leave, absence and other abnormal attendance status, automatically integrate all data, and help service industry automatic calculation bonus, reduce manual errors and save time.
Workstem – your best payroll assistant
Workstem All-in-One human resources management system, supports one-click application/approval of leave, open and transparent leave records, customizable attendance bonus calculation method, through the powerful AI salary calculation engine, calculation based on the attendance bonus calculation formula, and automatic comparison of salary data to ensure attendance Bonus calculations follow company policies and standards to help you deliver rewards quickly and efficiently.
Besides,Workstem has a powerful AI grain calculation engine, other salary items can also be calculated quickly, helping you handle employee attendance bonuses, Final Pay, etc., perfectly solving all salary matters.
Read More:
How to Efficiently Handle Payroll with Complex Long Service Payment in Retail?
How to Efficiently Handle Payroll with Complex Transportation Allowance in F&B?
How to Quickly Calculate Different Types of Attendance Bonuses?
