Entrepreneurs often ask questions about the bonus system. And I'm an ardent fan of her. But in this article I will tell you exactly when to implement it and to whom it should apply. After all, if you do not follow the rules, the system not only will not start working, it can lead your business to collapse.
Bonus system: benefits
When a system is good and well founded, it works great. And this is appreciated not only by employees, but also by managers. It's simple: the seller sells more - this has a positive effect on his salary. If not, no bonuses are awarded. And for most jobs, the bonus system works well. For example, an executive director may receive some percentage of the profit, and this is taken into account in the bonus part. At Visotsky Consulting we have just such a system.
The main mistake
But there is one common mistake. Managers see that the bonus system worked with a specific employee (or several in the same position), then they decide that they should extend the bonus system to all employees, thinking that this will increase staff engagement. And when they start to bring this idea to life, everything breaks down.
When the bonus system doesn't work
You need to realize that a company is a business process. There is a certain set of functions. When everything is set up, they bring results: satisfied customers, income, profits, and so on. Let's take a closer look at some part of the business process.
Example
We decided to launch an advertising campaign. Advertising generates leads, new customers are interested in the product and apply. Then there are sales. Sellers close leads, convert into customers, close deals and sign contracts. Further in the stream are logisticians and suppliers who wisely allocate resources and ensure the company's activities. Further in the business process is manufacturing. That is, there are different functions.
And there is a natural reason the bonus system breaks down. All functions are interconnected. If advertising is ineffective and does not generate leads, then this will inevitably hit sellers: there will be a decline in their work as well. Salespeople will come to the manager and say that the number of concluded deals has decreased through no fault of their own: they usually received 28 leads, and this week - 12. They not only fail plans, but also lose in salary due to lack of bonuses. All due to the fact that the functions in the company are interconnected.
When to implement a bonus system
When we do large annual consulting projects, we consistently build a system of management tools. It also includes the development of a bonus system. But I draw your attention to the fact that we do this last for the reason that the first step should be the development of a business model and organizational structure that would correspond to it. This is a necessary base for the subsequent implementation of additional systems. If this base exists, the manager can correct the work of a problem area in the business process in time, before it harms the rest.
Conclusion
You can create a bonus system in which each employee will be result-oriented. And the payment will vary depending on what success he will show during the reporting period. I love it, because this approach seems to me as honest as possible. Not all people are equally productive. And it's damn unfair when leveling is at work. We need to give people the opportunity to earn and encourage them for this.
Required base
But there is a catch: you can fully implement this tool only when you have a foundation. If it is not there, then bonuses can be introduced only for certain positions. To organize everything competently, you need to develop a functional model of the company, organizational structure, measurement of results. And this will be the correct sequence in which the bonus model will work.
