Taking the guesswork out of the holiday bonus plan.

For years and years at my shop, my brothers, my dad and I would have our annual head-scratching session about what we should pay our employees for a Christmas bonus.

Who got what and for what reason was always based on very little demonstrated productivity, but more on gut feelings. Primarily the feeling was retribution to those who ticked us off and fear of those we couldn’t easily replace.

Yes, we each had our favorite employees. We each had our own list of great employees we loved, the good employees who didn’t cause us much grief and didn’t mess up too badly. And we each had a list of employees we felt stuck with.

Really, it came down to the fact that we didn’t want to lose someone over a bonus by ticking them off at our busiest time of year - winter. So, we fought with each other long and loud enough until we’d come up with some number we could all swallow hard about and move on. I’m sure the staff was probably less than pleased with what they got from us and even more were puzzled by what the others got.

That’s right. They ALL knew what each other received. We never told them, but you could see them all gathering in the parking lot discussing what they did or didn’t get. And I’m betting the money was nice, but just as important to some was what they got in relation to their peers.

The hard thing about an arbitrary bonus program like this is that once someone has achieved, deserved or not, a certain bonus level, it’s next to impossible to lower or stop it. The primary reason is fear they’ll quit. And if you don’t have a way to replace them, you will be fearful.

I hated the whole process and I’m betting my staff did as well.

A Winning Bonus Program

Hey, I bet you just hate having to give an annual holiday bonus that’s more out of obligation than deserved. Am I right?

It’s not that you’re Scrooge or anything, but a lot of contractors have to take the money out of their own bank accounts or even worse from their own holiday fund.

Do you want to know a better way to handle the annual bonus (aka Christmas bonus)? The first thing you must do is plan ahead and do some basic financial work to do it right. That’s why you need to start now to get this program into place the right way for next year.

Here’s what I teach my clients to do instead of going the arbitrary annual bonus route. It’s called the “Company-Wide Game.”

Everyone on staff participates in this game, so everyone needs to understand how the game is played. This starts with the process used to arrive at the annual company sales goal. We need to do this through the budgeting process so we know if goals are met, the money needed to pay the company-wide bonus does not come out of the company’s pockets.

Typically the bonus is 2 to 3 percent of annual salary. Commissions don’t count because you can’t know this when you do the budget. This number is known and should have already been added into the annual budget, which was used to arrive at the  annual sales goal. This is why you can’t wait until it’s holiday season.

If staff members hit the annual sales goal and profitability target, they get the bonus and we’re happy to pay it.

A good company-wide game should address the measurable profitability in an objective way. This profitability goal is the one you used to create your annual budget and your annual sales goal. The cost of providing this special bonus for all full-time staff is an excellent way to bring the company together once a month to talk about how everybody plays a role in sales and profitability.

A big graphic representation that tracks weekly and monthly progress makes the game more enjoyable and gives it a greater sense of realism. Once again, any reward programs must be self-funded. They are only rewarded based upon hitting the goals, which means they pay themselves the bonus.  

This game takes you out of having to “motivate” your staff. They will understand the benefits of playing the game you describe. Posting it and talking about it is how to obtain this. My desire is that nobody will be better at posting and talking about statistics than you!

The real purpose of a company-wide game is to allow for open discussions on what role a good CSR, a good dispatcher and a good tech play and how each person is dependent on the other to win.

This game helps the company come together, and your training helps them understand that how the CSR handles the call, how the dispatcher maximizes production and how the tech handles the call affect company sales and profitability goals and their own pockets.

It’s a win-win-win for customers, staff and owners.