While virtual assistants come with their differences, such as working from miles away, one thing remains the same across all forms of support: motivation influences performance.
Motivation comes in different forms, including bonuses. Many founders and managers have figured out how to offer bonuses to traditional employees, but don’t know whether they should include them as part of their VA’s compensation. If you’re one of them, this article is for you.
The answer to this question depends on several factors, so what works for one business may not work for others. However, as we walk you through why businesses offer VA bonuses, when it’s necessary, and when it isn’t, you’ll be able to decide whether you should adopt VA bonuses for your business or not.
Types Of VA Bonuses
The simplest definition for virtual assistant bonuses is any extra pay they get beyond their hourly rate or the project fee. There are different kinds of bonuses, including performance-based, milestone, holiday, and loyalty bonuses, and companies typically pay them when profitable.
Performance-Based Bonus
This bonus is tied to specific performance goals that form part of a larger project. If a project aims to triple a business’s sales over a holiday, for example, a VA might earn the bonus based on an individual metric, such as the number of sales they personally close.
Milestone Bonus
Unlike performance reviews, milestone bonuses are for rewarding virtual assistants who reach a significant goal or complete an impressive phase of a project. In the example above, it goes beyond just making sales to hitting a certain revenue threshold.
Holiday Bonus
Typically given at the end of the year or on recognized holidays, this bonus isn’t tied to performance or milestones but just given out of goodwill. The amounts given can be randomly decided or fixed; e.g., businesses may offer 30% of a VA’s salary as a bonus.
Loyalty Bonus
Loyalty bonuses are also known as retention bonuses. They aim to reward individuals for sticking with a company for a long time and to motivate them to stay even longer. They come after being with a company for specific periods, e.g., two, five, or ten years.
For clarity, bonuses are not raises or commissions. A raise is a permanent increase to a VA’s salary, while a commission is an agreed-upon payment that’s part of your regular pay and tied to specific results.
Why Businesses Offer Bonuses To VAs
Businesses offer bonuses to their VAs for many reasons. A few of them are:
To Motivate VAs
When VAs feel rewarded for the extra effort they put into delivering great work, they are likely to do more. First, that feeling of appreciation is priceless. Also, they get the impression that if they keep delivering impressive results, then they may enjoy more rewards beyond their regular salary.
To Retain VAs
Many VAs stick with their companies because of bonuses. That extra cash that comes in once in a while helps them do more than their salary permits. They may use it for a trip or to boost their savings and investment portfolio. Also, they look forward to what they’ll do with the bonus from the next milestone, which may sometimes be higher than the previous one.
To Strengthen Relationships
When bonuses feel fair, it can increase a VA’s loyalty to the company. Also, there are cases where bonuses are team-based. Here, VAs work together to earn it, which can improve their collaboration going forward.
To Strengthen Your Reputation
Opinions about companies spread fast in the VA world, whether it’s good or bad. Being the hirer who offers fair bonuses puts you in VAs’ good books and boosts your reputation in their industry. It can also bring more resourceful VAs your way when you are hiring.
When It Might Not Be Necessary
While bonuses can be offered in any circumstance, they are not always essential. Here are some examples:
One-off, short-term contracts
With short-term contracts, say 1 to 3 months, there is hardly any time to use incentives to improve performance. If you hire me to provide 20 blog articles for your blog in one month, the contract will likely be over before you can fully gauge my strengths.
Also, you may not be able to break this small project into several goals and tasks that you can reward me for. And unless you plan to rehire me in the future, any bonus you give me at the end of your contract won’t affect your future results.
Projects with fixed rates
Some project rates already account for scope, effort, and outcomes. Remember, though, that some bonuses aim to influence outcome through effort. Since the project already makes provisions for these factors, bonuses can feel like paying extra for something you already bought.
Highly standardized roles
Many VA roles are highly standardized. There is a process for getting things done, and all they have to do is follow the process all day. An example is file management, where you provide the naming conventions, item types, folder structure, and handling rules upfront. The VA’s skill or creativity doesn’t change the outcome enough to justify a bonus.
Tightly constrained budgets
When budgets are tight, no point going out of your way to pay extra to a VA. In this situation, you need to prioritize your business’s health and plan your finances well enough to keep running predictably. All that matters is that you pay your VAs a fair wage.
Experimental projects
With some projects, you don’t fully know what you’re aiming to achieve when you start, so you can’t easily measure outcomes or define success. You may even change direction halfway through. When it’s unclear where you’re going, how can you tell if you’ve made enough progress for a bonus pay? It may just be best to avoid it.
Alternative Rewards For VAs
Instead of bonuses, here are some other ways you can reward VAs, build trust with them, and keep them around for longer.
- Flexible working hours where they work during the time of day that is most comfortable for them
- More paid off-days, especially after busy working periods
- Priority access to new tasks, especially the higher-paying ones
- Skill development support, such as paying for them to learn new skills and tools, which they will also use to work for you
- Public recognition, either through testimonials or in team channels
How To Structure A Fair VA Bonus System
You can set up a fair system for rewarding VAs with bonuses in just four steps.
Step 1: Set measurable goals
You must be able to define what warrants earning the bonus. It doesn’t matter whether it’s a key performance indicator, the length of time spent in your company, or what quality someone must attain. It’s only what you have properly defined that you can properly reward.
Step 2: Document everything
Bonus structures are not something to store in your mind, but something that must be well documented, preferably in writing. If you don’t document the bonus structure, future confusion will arise, and there will be no way to address it. When you do, the document serves as a reference material and a contract between you and your VAs.
Step 3: Communicate it clearly
After setting and documenting your bonus criteria, inform your VAs. Ask them if they have questions so you can clarify any unclear aspects. When everyone understands the bonus criteria clearly, those who want to earn a bonus know what to strive for, and no one feels cheated if they don’t earn.
Step 4: Pay promptly
When VAs meet the bonus criteria, pay them within the agreed-upon time. You should specify the payment timeline for bonus payments (e.g., within three months of meeting the criteria or at the end of the project). This way, VAs won’t feel like you are unjustly holding onto their money.
Examples Of Simple Bonus Structures
Here are some simple bonus structures you can consider for your business:
Fixed-amount bonus structure: You pay bonuses when VAs meet specific criteria, e.g., $50 for meeting monthly targets.
Percentage-based bonus structure: You pay bonuses as a variable of another figure, e.g., 5% of monthly client revenue.
Monthly bonus structure: You pay bonuses each month based on short-term goals.
Quarterly bonus structure: You pay bonuses every three months to reward sustained performance.
Annual bonus structure: You pay bonuses yearly in recognition of long-term contributions.
Individual bonus structure: You pay bonuses to one person based on their performance.
Team-based bonus structure: You pay bonuses to a group of VAs when they achieve their collective goals.
Tiered bonus structure: You increase bonuses with rising performance levels, e.g., meeting the base target earns $50, exceeding it earns $100, and top performance brings a $200 bonus.
Common Mistakes To Avoid
When you decide to give bonuses to your VAs, here are some things you must avoid doing.
Being Inconsistent Or Subjective In Rewards
If I write an article that hits a million views in one week and get rewarded with $20, that’s something I should feel good about. However, what if I remember that another VA wrote an article the previous month that hit the same figure within the same period, but got $30 for it? Then it feels unfair to me.
You should avoid changing bonus amounts randomly or playing favorites when rewarding VAs. What one VA gets should be the same as what another gets for meeting the same goals, except you have stated clear exceptions in the documentation, e.g., VAs who have stayed for over a year receive 50% more than those who have stayed for less.
Promising Bonuses Without A Clear Policy
It’s better not to offer bonuses than to do so without a clear policy. The policy addresses the criteria for earning the bonus (e.g., performance metrics or targets), the bonus amounts or how to calculate them, and the timeline for their payment. Without this, VAs may not fully understand how the bonus system works, which can make it feel unfair.
As much as possible, don’t leave bonuses to your discretion or that of your manager. Even if you already understand how it works and have a system for it, still document the system.
Setting Unrealistic Expectations Or Unsustainable Bonus Habits
You don’t have to give large amounts of money as bonuses. While they have their benefits, they aren’t compulsory. If you give away too much as bonuses, you may not be able to keep up with it all the time.
Before deciding what to give out as bonuses, consider how it affects your profits, especially during slow periods. If you can’t comfortably pay bonuses during such periods, then you should reduce what you are offering.
Finding The Right Balance
VA performance incentives and bonuses can be a wise investment. Think about your VAs putting their best effort to earn that extra cash or retaining some of your best VAs because they feel appreciated. However, don’t let the pressure of giving them overwhelm you, since they are not mandatory.
Also, you have to consider the situation and decide whether VA bonuses are really necessary or if you are already paying for the effort and results. If you are on a tight budget, consider the alternatives shared above. And yes, there are many bonus structures you can adopt—we shared some of them in the article as well.
For more helpful resources, like what to do about high VA turnover or how to provide feedback to VAs, surf our blog.
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