Generosity-Driven Bonus System

We don’t believe that money is a motivational factor. We don’t believe that bonus systems work either. Which means that we don’t have monetary bonuses. Sort of, um…, actually we do. Are we being hypocritical? No, not really. Here’s why.

20zlWe have bonuses only on one occasion per year – just before Christmas. In fact, they are even called Christmas bonuses. The goal of the bonus was never connected to appraisals or performance at all. It’s just a nice gesture before Christmas.

That was reflected in how we shared these bonuses. Everyone who spent an entire year working with us, on a full-time basis during that period, would get the same amount. By the way, this isn’t a huge pile of money. Part-timers or people who joined throughout the course of the year would get their piece of the pie proportionally. The position of the employee isn’t reflected at all in this. Neither is seniority, salary, performance nor anything else.

I told you that it wasn’t any sort of an appraisal tool, didn’t I?

I wouldn’t share that if it were not the fact that we have already changed how we handle Christmas bonuses. No, we didn’t get rid of them. Since the premise of the bonuses was just to make people feel happier we decided to go further.

Getting goodies is nice – more so if you really need them. Sharing goodies is even nicer – more so if others really need them. So why not allow people to share? This is exactly what we do.

Instead of simply getting your bonus what you’d get is a few sticky notes – each worth the same amount. You can write down a name of anyone working for the company and they’d get the amount added to their bonus.

Of course, you can choose as freely as you want. Choosing yourself is perfectly OK. In fact if someone liked the old way of doing Christmas bonuses they still can have it that way. You can however be as generous as you want and in the way you want. Maybe you want to share because someone really helped you? That’s great! Or maybe it’s just the fact that someone needs money more than others? Awesome!

Despite how we value transparency, we don’t make these decisions public. What is public is the overall results, but not the individual decisions that contributed to the outcome. Why? There’s one reason.

Having the opportunity to share makes it more difficult to take everything ourselves. I make it explicit that it is perfectly OK, yet still some may feel like it’s being a bit selfish. In fact, the only complaint about the bonus system we have is that some of us felt it was easier when we didn’t have to make these decisions explicitly.

That’s a pretty damn low cost for the opportunity to feel like Santa Claus if you ask me.

And obviously it has nothing to do with the common perception of what bonuses are. After all there are many things we do that are anything but what we perceive as a canon of management. That’s all part and parcel of being an exceptional company.

  • Michael Sahota April 16, 2014, 11:13 pm

    This sounds like an interesting experiment. I would love it if you share the results of this experiment. e.g. employee satisfaction rating of existing mechanism and rating of new system. Thanks.

    Reply
  • Paweł Brodziński

    Paweł Brodziński April 17, 2014, 11:25 am

    Michael,

    Employee satisfaction rating? That sounds evil. And obviously it would tell nothing why someone is satisfied or dissatisfied with the experiment.

    There are 25 of us. I prefer the old trick of talking to people and asking them about feedback.

    Main points of feedback were:
    - Making these decisions by ourselves instead of by someone else is surprisingly difficult
    - For those who decided to share with others–it feels great
    - For those who received something from others–it feels great (in fact, it does even if the sum they received isn’t higher that what they’d get if they took everything for themselves and received nothing)

    Also, the first year we run the experiment in limited scope and then discussed whether we want to repeat that and the feedback was only neutral to positive.

    Reply

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