The Perfect Bonus Plan for Any Company

Thinking the team would really appreciate the gesture. But all it did was cause questions. One person even complained about the amount. 🤦

That’s when I realized the traditional Christmas Bonus was dead. It was too arbitrary. Too much of a black box. And, it left people guessing…

→ What was this based on?
→ How was the bonus calculated?
→ Did everyone get the same amount?
→ Can I earn more in the future?

If the purpose of a bonus plan is to align financial incentives with great performance, the Christmas Bonus was a complete failure. 

So I started scouring the internet for an upgraded bonus plan structure I could use. 

I never found the perfect plan, but I got enough inspiration to shape my own. 

And that’s what this week’s article is all about…  giving you the EXACT company bonus plan structure that we came up with and still use today! It’ll work for any company, of any size, in any industry…

A word of caution though. This bonus plan will create a performance-based culture. It takes guts to pull off and hold the line. The weak need not apply. 

With that, let’s dive in! Till next week,

Never say die 🏴‍☠️

Scot

EXTRA 👍
Most people screw up comp design

We did a deep dive on compensation design in Highland this week. Compensation drives behavior. It’s a tool for a leader to use. 

Here’s a clip of me talking about the common pitfalls that most founder & CEOs make when they’re designing employee compensation:

⌦ Employee compensation isn’t tied to company goals
⌦ Employee compensation isn’t tied to employee goals
⌦ Employee goals don’t align to company goals
⌦ Company has weak or poorly understood goal
⌦ Company has goals, but employees don’t

Out of this list, the biggest culprit is a misalignment between the company’s priorities and the employee’s day-to-day work. 

So, the question is: how do you design your compensation plan to force alignment between the company and every individual on the team? 

IMO, the company-wide bonus plan is the best way to do this.

If you have any questions let me know!