You know your company should have an incentive program to reward with bonus the top performers, but you don’t know how to start and implement it? If your answer is yes, this post is the beginning of a solution for you.
Problem: There are problems that solution is easier said than done. Planning and implementing an incentive program is one of them, for sure! Besides finding a suitable to define bonus calculation, another problem is that it should be agreed upon beforehand and often things don’t go as planned from the time the agreement was done to the date of the bonus is distributed.
The reasons for this detachment in the planned x executed environment is called reality. In real life, usually things don’t go as supposed to, and the incentive programs must have an easy and straightforward way to deal with it. And this adequation should, preferably, be transparent and continuous.
How management and workforce can keep track of the changes in the values of bonus to avoid the discomforts that can be brought by this changes?
Consequence: An incentive program that changes abruptly and untimely (usually at the time of bonus final calculation) is doomed for causing more harm than good. The workforce will feel bamboozled by management for suffering a decrease in the values they were expecting to earn and learning it only at the time of receiving the bonus.
This situation (receiving less than anticipated) have a potential for demotivating the workforce, acting exactly in the opposite way it was imagined to. Instead of motivating the teams to work harder, with more productivity, untimely changes in incentive values can do exactly the opposite, draining energy and determination from the teams, backfiring at the management intentions.
Solution: The solution to avoid this potential problem is to devise and implement an incentive methodology that is clearly defined, easy to calculate, and is continuously updated, fore fending last minute surprises.
How to do that? By establishing a plan that could be easily understood by the team and that can be sustained thru the bonus acquisition period with no substantial changes. The following steps can be used to construct this plan:
· Define, in the management level, what should be the amount and the conditions for the bonus to be paid.
· Establish the weights of the items (Key Performance Indexes) to be evaluated for the bonus calculation; the more objective the item, the better.
· Have a meeting to explain and discuss the bonus criteria to all people involved in your company.
· Create a ranking per team individualized by name and link ranking position with the bonus to be awarded.
· Periodically inform each person in the teams what is their ranking position and the expected bonus.
This methodology is simple and yet quite effective, as it explains to the team what are the criteria for awarding the bonus and keeps the workforce updated on their ranking position and bonus values.
How Can Crunchflow Help? Crunchflow was made by people with extensive experience on incentive matters. One of the great solutions we present to this problem is the ranking calculation and analytical tool embedded that lets you share results and dashboard across the company.
Upon the beginning of each bonus period (trimester, quarter, semester), management defines a new set-up, the criteria to award the bonus, where to get the data from, the desired weights, and the composition of the teams that will compete for the bonus.
Based on this set-up, Crunchflow can create a Ranking & Bonus Dashboard (users can select it from several templates) that can be updated on real-time, so that no surprises arise.
Crunchflow uses the inputted data in the system and the criteria for the bonus and ranking calculation to automatically update the rankings and, along with this updating, recalculates and if your company chooses to, displays the ranking position and the expected bonus for every person on each team.
Visual Management is a powerful tool to keep your workforce motivated and productive. Crunchflow can help you implement this tool and, what is very important, keep it updated allowing your company to profit quickly from its motivational and managerial benefits.
See an example of KPI Ranking:
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