Quick reminder. We still have space available in two of our Leadership programs. The program is six weeks (six sessions) in length, one program to be held in Fort Lauderdale FL (kicks off Wednesday, September 12), the other in Orlando FL (kicks off Monday, September 24). For more information, visit www.workingleadership.com.
Reggie and I kicked around his bonus system last week. Moving away from bonus as motivation requires a different mindthink on the part of the manager. Last Friday, we talked about the first shift, moving performance talk from the manager to the team. We talked about how the manager creates that conversation.
“Reggie, when you are barking all the orders, and telling people, if they will just perform to this standard or that standard, they will get an extra bump in their paycheck, where does that place accountability?”
Reggie looked at me for a minute, shook his head, “I’m not sure what you mean, where does that place accountability?”
“Reggie, the reason this is a difficult concept, is that most managers rarely talk about accountability. Back to the question. Where does a bonus system place accountability for performance?”
“I still don’t know what you mean?”
“The manager says, if you perform to this standard, you get an extra $100 in your paycheck this week. What happens to accountability for performance to the standard?”
Reggie was working through this in his head. “Well, the manager has done his job. He defined the performance standard and calculated the bonus, so it’s now on the team member?”
“Not quite,” I said. “The team member now has the choice to perform, or not perform and understands the consequences. If the team member underperforms, $100 of their promised pay will be withheld.
“So, the team member underperforms and does not receive the bonus. They’re okay with it, because, in the end, they didn’t have to work that hard after all. And the manager must be okay with it, because he doesn’t have to pay the $100.
“So the performance standard is not achieved. Who is accountable for the underperformance? Is everybody happy?” -TF
What if the bonus is only positive and is awarded only when the employee goes above and beyond the normal expectations? So no decrease in pay is offered, but if 120% effort is given, then extra pay is awarded?
How is the bonus system all that different from that of commission based sales?
What is the incentive if the overachiver is rewared at the same level as the status quo? How do we reward people that go above the expected standard or as in commission based sales are more profitable that less skilled or motivated peers?
Allen and Nick,
You both raise interesting and pertinent questions. Please stay with me through next week as we talk more about bringing out the best in people.