Bonus systems are like Big Foot…always talked about, professed to exist, occasionally seen but usually end in disappointment for everyone involved. Either the team feels like the bonus is unachievable or the boss feels like he just paid the team for doing what should be “their job” and now they feel entitled to a “bonus”. However bonuses, we promise you, can be one of the most powerful paths to remarkable focus and results for the team…and yourself! Thinking through what to bonus and how to do so forces you to identify and clarify what you want each team member to focus on and what your expectations of them are. Sharing it with them makes sure they are “in the know” and on the same page.
There are several types of bonus systems you can put in place for your team, here’s a few:
1. Team Revenue Bonus: A team revenue bonus is based on the achievement of a revenue goal. We recommend it be based on profit. This has everyone think “like a business owner” and be aware that while it’s great to bring in more gross revenue, you have to make sure expenses are kept in check. It encourages team to both generate and collect income and look for ways to reduce expenses.
We love having a tiered system, where as each level is surpassed the bonus amount increases. This encourages the team to keep pushing even when they achieve the first goal.
There is no one way to have a successful team revenue bonus system but we like to recommend a quarterly bonus period. A year is an awfully long time to maintain momentum and a month is sometimes too short to see results from your actions.
2. Individual Bonus Systems: Individual bonuses are based on each team member’s role and responsibilities in the firm. The bonus should be based on the team members MOST important activities. Don’t just find the easy thing to bonus them on, that may not be the areas you really want to see results and growth. Look for the three most important activities of the team member, including new things you want them to learn and be accountable for. Then find specific measurements that will achieve the results you want. The key is to make sure what you are measuring is within the team member’s influence. If not, it won’t motivate them. Here are a few examples:
a. If your Client Services Coordinator’s most important activity is making sure you have new potential client appointments on your calendar and your goal is to have 10 new appointments a month, then bonus her when she gets 10 appointments scheduled. And for each appointment above 10. Now, is she fully responsible for getting the phone to ring with prospects? Maybe, maybe not. But if her bonus is based on it she will definitely be tracking referrals and meeting with you weekly to give you a report and let you know where you stand. And asking what she can do to help.
b. If your drafting paralegal’s most important activity is drafting estate planning documents for your review you could bonus her on each trust she drafts…but…well, what would that encourage her to improve or grow in? Instead you could bonus her for each plan she had prepared for your review one week prior to the signing date with no errors in names, addresses and other factual details. Or, we like the idea of bonusing her on having the documents prepared for your review within a week of the Design meeting. This improves your system so that you aren’t having the awful experience of your paralegal asking you to clarify something in the plan design and you can’t remember because you met with the client three months ago.
c. Front Desk or Office Manager. We love the idea of bonusing whoever is in charge of handling office expenses, like office supplies, phone service, etc., on how much they reduce expenses. There bonus can be a percentage of what they save the office by finding more cost-effective providers and methods around the office.
3. Project Bonuses. Another great type of bonus is a project bonus. This can be given to an individual or a group of team members. This bonus is for completing a project, something that is in addition to their day to day responsibilities. It could be for getting all your old files scanned and shredded, or for getting the new brochure finally designed, or for researching drafting software programs and helping you make a decision on which to purchase, getting it installed and all the team members trained on it. Some offices have a standard number of projects they have team working on each quarter, others approach this as needed, but it works like a charm every time. It completely avoids the “I don’t have time to do this I already have too much work” mentality. The key is making sure what has to occur for the project to be considered “complete” is clear…crystal clear. Saying the new brochure has to be “done” can mean a variety of things…a rough draft for your approval? A final draft submitted to the printer, which we all know means another set of review/revisions after the printer sets it up and provides a proof? Or the actual printed brochures in your hand by the due date? This is a HUGE distinction because printing can take several weeks after the final proof is approved. Everyone needs to know what “completed” means.
Our next blog in this series will share some common pitfalls with bonus systems and how to avoid them. Stay tuned!
Champions of your continued success,
Molly and Laney