Good thought in Fastcompany about Bonuses. Some believe they hurt creativity and don’t mean much, but others disagree (surprise, surprise).
I think the broader point is that bonuses are not automatically a good thing. If they are given to everyone then they become meaningless in building performance. If they are given only to certain groups, like salespeople or owners, then others feel excluded.
Your pay structure can ruin your culture as fast as you try and build it.
Here’s the key to happiness; there is no single pay system that will fit all companies.
Before you start just adopting the systems of the past 50 years do a little cultural design and ask some questions:
Will you need your people to work in teams or separately on specific tasks?
If you do have teams, do you anticipate using a leadership component?
Why are the outcomes you are trying to achieve both internally and externally? (i.e for the company and for your customers)
Can you effectively calculate the impact of any task and possibly pay a percentage of that effect?
It may mean the all you leaders out there will need to come up with different pay systems depending upon what organizational objectives you have AT THAT MOMENT.
When you adopt pay structures unilaterally you automatically begin to try and fit your org structure and focus into that structure. But no organizational structure stays stagnant as it grows. It shifts and changes just like any living organism.
To make it really simple let’s talk use food as an analogy. You may feed a baby lots of milk because that is what works at that moment. But as it grows to adulthood it may be vegetables and fruits that provide more energy than milk.
The point is that the world is full of stupid systems that get repeated simply because they were done before. If you see your firm more as a living organism you MUST be open to creative pay designs in order to bring the right energy to your people at that moment.
So get your thinking caps on!