Friday, October 26, 2007

Bonus Qualifiers

So we're in our first month of Team Based Pay which means we are also working towards our first Team Bonus. It's exciting, challenging and scary all at the same time. To see how our bonus plan is designed see my post on Team Bonus. This post discusses how to distibute the money. We decided to go to the team and let them help figure this one out.

The tricky part to all of this is thinking in positive terms -what does someone need to do to earn part of the bonus. Not, what behavior will get someone kicked out of the bonus pool. I'm trying hard to communicate only in positive terms. One of the hurdles we've run into in determining our bonus qualifiers is that we get caught up on whose fault something is. For example, if someone is late for work because there is an accident on the highway, it's not their fault. So shouldn't they still be eligible for bonus? If someone is out sick because they have the flu or a concussion, or whatever, it's NOT THEIR FAULT, so shouldn't they still be in the bonus? If they're not eligible for bonus and it wasn't their fault, then it's just NOT FAIR.

My opinion on this has evolved on this issue and I'm leaning towards "it doesn't matter whose fault it is." If I keep the Client's needs first then I have to acknowledge that it doesn't matter whose fault it is. To the client who has to be rescheduled, fault doesn't matter - it's still an inconvenience and a client service failure on our part.

So I think where we'll end up is that being on time every day and being at work every scheduled day is a requirement to earn a full share of bonus. We will also have requirements regarding dress code and meeting attendance.

The last tricky item is Planned Absences - vacations, etc. In some salons to be eligible for bonus you have to work every scheduled day which means if you are gone for vacation you are ineligible for bonus. I don't like that idea because I feel that vacations are so important to our sanity and make better employees. But I acknowledge that if they are not there, they are not contributing to the success of the business while they are gone. I think my team is leaning towards allowing someone to participate in bonus, but at a lower level. If they would ususally get a full share of bonus, they might only get a half share.

As far as pay-outs, we are distributing ours based on hours worked. A full-timer will get a full share whereas someone working less than 15 hours will get a 1/4 share and so on.
The key is to make sure the team looks at bonus as an extra they have an opportunity to earn - not something they have already earned that you take away as punishment.

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