Loading...
Answers
MenuWhat are good approaches for setting up a performance based bonuses for employees?
Answers
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
I would spend sometime working alongside the team members you want to target to find out what would be their hot buttons for a bonus.
Attaching a bonus to a difficult task or a part of the business that they don't typically enjoy can suddenly make that part of the business great.
At management level if we do not see or feel what they feel, our opinion on what will excite them as a bonus is sometimes off target.
Just an idea.
Keep up the great work and good luck!
Mark
We've tried so many different models of this over the years it actually hurts to think about.
What we currently do for "core/critical" staff is we base bonuses on gross margin. We also tie a % of commission to sales people to gross margin so that there is an alignment on incentives between production staff and sales staff.
Is it perfect? Hell no. It does work the majority of the time though.
Related Questions
-
We (2) just started up a digital agency. What is the best way to answer: "How big or how many employees does your agency have?"
Answer with the truth. And perhaps follow their question up with a question such as "Why do you ask?" This serves 2 key purposes: 1. It helps you get to the root of what they are looking for / need / want. And regardless of whether you get that particular client's business or not - you gain valuable insight into the mind of your market. 2. It positions you as the adviser... Asking "why" helps you get more clarity so that you can make sure you are the best fit for them. In fact - their answer might prompt YOU to say "I'm sorry - it sounds like we might not be a good fit for you." By willing to walk away you show poise, confidence, and professionalism. For more tips and assistance with growing your agency - give me a call. Best of luck!DB
-
My partner is an idea person who refuses professional business plan. Is this typical of creatives or is this a sign of unprofessional habits?
I have been working with creatives for years and the ones who refuse to follow standard business practices such as planning are normally the ones you don't want on your team. Creatives are great but if they don't understand the importance of business planning, resourcing, money management they are not going to be partners... only employees.MG
-
How do I get top shelf design agencies (web, branding, etc) to allow me to use some of their portfolio on my website?
As the former owner of a web design shop, I can see the appeal of a program like this. The biggest reservation I think a shop owner will have is understanding how you will treat their clients, what expectations have been set, and how much damage control they will have to manage if something goes sideways. Your best bet will be to establish a relationship with these owners so they understand your customer service philosophies, approach, and communication style. I'm happy to help more, feel free to set a call here on Clarity and we can discuss how you might approach them to start this relationship. All the best, -ShaunSN
-
How do you deal with a control freak in your company?
There is likely a lot of background to this question, so it's difficult to answer online with one specific solution. To begin, "control freak" and "abuse of power" can be quite subjective terms. Objectively, in what ways do you feel he is overstepping his authority? Is this a recent event, or an ongoing concern? Has he been formally spoken to or reprimanded by senior management in the past about this behaviour? Hopefully your organization has policies in place to address behaviour like this. Setting clear expectations around what is and isn't acceptable, and turning to progressive discipline if necessary, often help the employee to understand the outcomes (possible suspension, demotion, termination etc), should they continue down this path. It's important however to first understand and deal with the root cause of this behaviour, not just the symptoms. Speak with the individual candidly and honestly, and ask them if they feel it's appropriate to behave like this, and try to reveal WHY it's happening. Perhaps they're having difficulties in their personal life, or they're stressed at work. Be respectful, and work with them as best you can. If you would like additional help, please arrange a call with me. I would be very happy to help you get through this in a way that is best for the employee, and your company.GN
-
Hourly? or Set Prices for projects/programs? What are the best practices for creative agencies pricing models?
Bill for the project and set clear expectations of the number of revisions, etc. Extra changes are charged at a pre-determined rate (hourly, per change, etc). The idea is to keep the objective of the project in the forefront. Rather than "designing a website", you are improving the website the meet the goal of the client (perhaps to improve their conversion rate, for example). It gets very muddy when a client who doesn't know what they want starts getting involved in the design; "what if we change this from black to blue? Can we add a little more space between these lines? I like that picture, but can it have more pop?" These types of changes dilute the primary reason the client chose you -- for your design abilities. That is a main reason you charge for the project: a website that (we can all assume it will be fully functional, attractive, and in line with best industry practices) meets their goal of conversion. If you have done your due diligence, you will produce something that captures the "voice" of the client brand and the back and forth design changes will be avoided (in truth, they don't add or take away from the primary function or objective). This approach *only* works with clear communication and expectations upfront. Have wireframes approved early. Have mock-ups/colors/photos/text approved early. Explain that, once approved, any changes fall outside the scope and will be charged at XYZ rate. We don't go to auto manufacturers and ask that they change the size of the radio dial nobs or change the pitch of the seats. We are buying a product. Custom work can be spec'd out accordingly, with the appropriate price figure. Clients should not expect budget prices and unlimited revisions. Let me know if you have other questions -- happy to help.SN
the startups.com platform
Copyright © 2025 Startups.com. All rights reserved.