Any thoughts on the new bonus structure that includes business units?
Good? Bad? Ugly?
What will be the actual effect?
5 replies (most recent on top)
Yes, Kabuki has it right. It is a "what have you done for me lately" strategy. You can do a job day in and day out perfectly without a single mistake and be highly valued. But at the end of it all, they are going to look at you and say you didn't go above and beyond, you just did your job. "You are expected to perform at a high level." You don't get rewarded for performing at a high level every day. Then they will reward the kiss ups who do the smoke and mirrors as if they overcame unforeseen obstacles to do a mediocre job. That is the reward you get for playing office politics. I am a quiet one who doesn't play that game, asked to clean up other's messes and then given a Met Expectations rating while the person who made the mess gets a Far Exceeds rating and promoted,... SMH
In the old days (a couple of decades ago) the bonus program was 3 tiered.
1) how did the company do
2) how did your business unit do
3) how did you do.
So yes, it's possible if the company has a good year and your highly performing business unit has a tough year due to changing goals and or budget cuts mid-year or other reasons but the employee has a great year then the employee who worked so hard and potentially blew away their personal goals will get extremely low compensation.
It is interesting a great worker beating their goals and path plan could receive much less than someone just getting by in a highly functioning business group and that's a demotivator.
In the end, it's all about how much voice your leadership has at the head table and the managers speaking up at the roundtables. As a former manager I was always dealt a % for bonus and raise based on review #'s and it was Never Negotiable regardless of my wishes/pleading.
So it's back to what it used to be.
Agree with Kabuki - it’s all smoke an mirrors. There are many tricks that can be pulled behind the curtain which will ensure a continued financial inequity, even in spite of your business unit meeting or exceeding plan. There is far too much subjectivity allowed in diving up the bonus pool. I know favoritism abounds in departments and unless you’ve kissed the ring and can demonstrate you produced beyond the day-to-day, and went, as they say above and beyond, not to mention, I’m certain there is an unspoken expectation that it’s connected to your signing up and assisting on MyPath projects, you can expect no more in AVIP. It continues to be rigged. Only the naive think it is a genuine corporate philanthropy for employees benefit. Perhaps if they consider employees salaries to be the natural disaster that they are, money to remedy the grunt workers pay will appear as a news worthy homepage article. People are fed up with the company’s games and are leaving and actively looking. People know their worth nor do they care to stick around a clean up a lifetime of messes!
The emphasis on the AVIP being "variable" and not guaranteed in the video and FAQs should tell you everything you need to know. If there's one thing this EG has demonstrated is, decisions are made with $$$ in mind with no consideration to the worker bees. Not for a second do I believe that this was done as a benefit to the employees. Kabuki has the right idea below.
It is Kabuki Theater.
With the new scheme, the bonus for a business unit depends on the targets that were set for that business unit. So, the real game is getting your target set low so that you can exceed it.
Plus, they have all kinds of outs to give whoever they want whatever they want. Yeah. They'll make "fair" adjustments.
But, for the rank and file, the results have little to do with their effort more to do with the random rolls of dice.
Say you have a business unit that is really doing great. But, then you set its targets high. Then the actual performance of the business unit might not be all that great relative to the target. But, in absolute terms, it could be the golden goose. So what do you do? Set the target high for a great unit and give people mediocre bonuses? If you do, it might take a little while, but the great people in that unit will leave.
This bonus system is going to have unintended consequences. Not sure what they are yet, though!