Replies

1. 
   Catskinner | Dec 18, 2002 03:26am | #1

   Yeah, me too. Let's hear it.

   DRC

2. 
   HammerHarry | Dec 18, 2002 04:35am | #2

   The first thing to determine is, what exactly do you wish to reward?  Speed and productivity only, or productivity AND quality? Determine what you want to reward.  Then, determine an objective way of measuring it.  And think about what potential problems this might cause.  Are your guys going to be tempted to short one area in order to max out bonuses that focus on another?  You don't want them to go lickety dam all the time, and leave shoddy work behind.  Doing it properly means you have to look at all the angles.

   I had a boss once who was famous in the organization for being the guy who's team had the lowest cost airfare every year.  Lowest cost as in lowest percent of full fare.  He accomplished this by always making everyone stay over saturday nights.  I once spent 8 days away for a two day meeting.  The airfare was measured for the general managers' bonuses, but meals and hotels weren't.  Overall, I don't think that plan accomplished what it was supposed to.  So, look carefully at what you intend to reward, and make sure you aren't missing another part of the picture.

1. 
   rody | Dec 18, 2002 05:18pm | #3

   In my industrial setting, the main factors are always safety and quality of work, usually measured by accidents or incidents, and rework. The budget and schedule are factored in also but gains can be quickly erased by a "recordable" injury or time lost due to mistakes. Like someone else here said: Quality, Budget, Schedule, pick any 2 but you can't have all three and IMO safety must always be first, last and everywhere in between. I've lost good friends from the plant, both from death and from disabling injuries and you can't reward a good safety record enough. The penalty is too great.

   Lefty - Lurker without an attitude or a clue

3. 
   TommyB12 | Dec 18, 2002 09:28pm | #4

   I've been thinking along those lines since I started.  Finally have a couple of guys that deserve it.  I don't have a solution yet but I'll give you some thoughts.

   I think it is very difficult to give production oriented bonuses, which I think would ultimatemately be the goal.   Working efficiently is certainly my ultimate goal of course safety, quality, etc. come before that.

   I have given merit bonuses in the past where I've given the guy an envelope with cash in it but addressed to the wife.    Maybe a little sneaky, but I can't tell you what an asset it is to have the wife on your side.  Don't know if it would work with girlfriends. 

   I'm not sure periodic bonuses at my discretion have the desired effect.   

   So here's what I was thinking.  I accrue a percentage of their annual salary on their check,  they see it building up.  But with the understanding that mistakes, showing up late, could potentially go against their bonus accrual.  The bonus would be awarded and payable on a specific date each year, only to employees who are with the company.  I'm not sure if there are any legalities that I need to be aware of is the only hitch.

   The percentage would increase with years of service.  Like 1% the first year, up to maybe 10% after ten.  

   This would accomplish a number of my objectives.  For instance, the first year guy might be encouraged to actually make it through the first year.  Timing would be important because if there 10 months into the bonus, it might not make sense to quit for a marginally better opportunity elsewhwere.  I could see where docking the bonus might be a good behavior modificator as well. 

   It would also be very easy to factor into my costs.  That's if I can afford it.  

   Any thoughts?

   Tom

1. 
   UncleDunc | Dec 18, 2002 10:25pm | #5

   Sounds workable. I don't think you'd have any legal problem with paying it after some delay. I've heard of similar plans.

   I have one issue. Taking back money that's already in the plan because of bad behavior sounds like a really bad idea to me, for at least two reasons. First, it raises the issue of arbitrary and capricious standards. I'd hate to think I might lose money I had already earned because the boss had a bladder stone or his girl friend just served him with a paternity suit. Second, it invites conflict of interest. If you have a big quarterly tax payment coming up and no money in the bank, it's too easy to look over at that bonus account and convince yourself, quite sincerely, that your guys have been slacking off. I would say if the guys screw up or slack off, just don't put more money in the account, but never, ever take money out.

1. 
   TommyB12 | Dec 19, 2002 01:25am | #6

   That's kind of what I was thinking, dunc.  It's hard to motivate people.

   Instead of taking away, how about suspending the accrual for a time period. 

   Here's the rub.

   As an employer, good to excellent performance is expected.  Rewards are for going above and beyond.  I think a good performance review plan with some type of program like this is in order as well.

   I have a brother that works for a community college (essentially quasi-government) and they are implementing a performance review and bonus program.  The employees feel that just showing up warrants incentives.  That's where peer review is important.

   This kind of thing plays out on Survivor every week.  I find that program intriguing.

   My old incentive program was similar to the carrot and stick.  Only it was just called "stick".  Live and learn.

   Tom

   Edited 12/18/2002 5:26:53 PM ET by Tommy B.