The Agency Blogger
Agency Management & Controlling
Bonus systems for agencies and service providers
Performance-oriented payment systems, in the following abbreviated to bonus systems, can strongly motivate employees and lead to better results. Companies who have successfully faced up to these issues in the past can confirm this. The trick is to choose the right approach.
The main principle here is: bonus systems are there for everyone and not just for people who can be measured on the basis of hard success factors. These hard factors include dimensions such as revenue, income, return or indicators such as “revenue per capita”, “return per capita” and comparable factors that evaluate people as service providers.
Ideally, software systems such as agency software, company software, management information systems and other ERP systems are used to calculate these indicators, churning out these basic data at the push of a button.
Indeed, bonus systems also depend on management as well as the employees themselves providing statements regarding their own objectives. Different bonuses could be offered for both dimensions – but the employee decides in advance which one to take up. In practice, this means: will the employee choose the “cautiously estimated model with fewer opportunities and greater security”, or will s/he go for the “lower security with more opportunities” with regard to the bonus model?
The combination of hard targets can also be sensible in individual cases, for example in the case of both a bonus model for revenue and a bonus model for income for external cost-intensive processes.
In addition, it is important to integrate soft factors into the bonus system. As such, everyone concerned is aware that misjudgements may occur. Here, quality features such as reliability, adherence to schedules, fail-safe operations and other factors should be evaluated.
In summary, here is a bonus model for an individual business concept, which should be designed together with management and adjusted to the individual person – the beneficiary of the bonus model. If this is successful, the company will also benefit – be it by higher profits or better motivated employees, or both – and a classic win-to-win situation results.