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
-
How should I handle a situation where an employee asked for a raise a couple months in advance of a scheduled raise?
Do you find your employee an efficient worker? Is he performing well in your business? What could be the lost in your business if he leaves? You mention that you are barely keeping up with the demands, so is it possible to hire more employees, if he leaves? These are some of the things you can think about to trigger your decision. It is important to keep the employee happy if they are giving you great performances, but it is also important to measure the benefits you can offer to the benefits of your business. I can understand your feelings when your employee address the early salary raise issue to you. If this employee is doing a great job, I believe you know that he deserves to get a raise, and it could also be a motivation for the other employees to work harder. On the other hand, if an employee is not performing efficiently, you should consider putting your focus on another that do. If you need more support regarding the issue, I will be happy to help you sort things out. Best of luck!CL
-
I am hiring an employee and need to prevent them from accessing my clients email address. Is there software that can do this?
That is an interesting situation and I am sure many others share a similar concern. I would recommend trying out Podio (free), it lets you create all sorts of templates to capture and work with information (text fields, categories, dates, etc). You can set it to receive e-mail for you and it will automatically insert the appropriate information into the fields (including attachments). You can decide if your staff only sees the name of the student and the attachment if you wish. You can also create a workflow that informs you when your staff members finish the corrections and are ready to be sent back. You can even use it to keep track of all pending essays, their progress and due dates so you are always on time. Let me know if you have any questions!AJ
-
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
-
How you deal with unpaid invoices for your marking agency?
Require payment up front, either in full or as a deposit. During your onboarding process, make it clear that your policy is to pause future work if the client becomes past-due. And then follow that policy if it becomes a problem—be polite but firm. Concerned you don't have the reputation or track record to require payment up front? Look at the social proof you're using in your marketing. Mention U.S. brands you've worked with (if you have permission to do so). Share testimonials and case studies. The goal is to reduce risk to your prospective clients, so they're less likely to push back on pre-payment. In the U.S., I see independent agencies doing primarily Net 30 as their payment terms. If you're doing that now, shorten terms for new clients to Net 15. (Don't do "Due on Receipt" since no one pays on receipt; you should have a real due that that's some point in the future.) Here's more on preventing this long-term: http://sakasandcompany.com/clients-who-keep-paying-late/ Onshore agencies struggle with this, too, so you're not along in facing this problem. Good luck! Background: I led business operations at 2 digital agencies, have worked in digital marketing since 1997, and advise agencies about operations, strategy, and leadership in (so far) 15 countries. If you have followup questions, request a call here on Clarity; I'm glad to help!KS
-
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
the startups.com platform
Copyright © 2025 Startups.com. All rights reserved.