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Performance Management: What are good approaches for setting up a performance based bonuses for employees?
Kenneth Wolstrup, Value adding advice built on analysis. answered:

In my business, positive bottom line equals bonus for everybody. Percentage of salary to employees - same for all, up to three months salary. That is simple and works well, and is aligned with overall goals. And it is easy to report where we are. We don't have sales targets, which we maybe should have.

Depending on your business type that may not be feasible for you-startups don't make money initially. But building on your idea, hitting targets is important. Both growth and quality. People will behave as they are measured and challenging targets will help you create a sense of urgency instead of entitlement. (However, increase risk of suboptimization).

I think hitting sales targets, finishing projects on time and budget combined with NPS for both sales and project process should be enough. You don't need many targets, but use them all the time, talk about them with your team, incl. what you are trying to achieve. KPI's are no substitute for leadership; your team needs to know what your intent is.

One way of showing your commitment to quality could be to collect NPS yourself through customer interviews. That would also inspire new ideas, and give you better market knowledge. Given the size of your team that should be feasible.

Good luck. Should you want to talk more to someone with a business of similar size, feel free to give me a call.

Best regards
Kenneth Wolstrup

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