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A bonus program shouldn’t be the only motivational tool you use, but it can spur better performance. You just have to run it properly. Here are four basic components of a successful bonus plan:

• Clear goals. Employees should have a voice in setting performance goals so they understand and accept them.

• Feedback. Let them know how they’re doing as often as possible.

• Cooperation. Your plan will be more effective if employees collaborate to reach goals, instead of being pitted against one another.

• Challenge. Goals shouldn’t be too easy, or employees will take your bonus for granted.

—Adapted from Inc. magazine