Dear Seniors,
Please help! How can we decide how a bonus/incentive should be given to a particular employee when you cannot measure achievement in terms of revenue target? My organization is in the entertainment industry and is planning to start an incentive/bonus plan for client servicing, creative, and operations staff. How can we decide how much we should give as a bonus? For Marketing, there already exists one plan which they do not want to change.
I have developed a list of objectives that are important in these areas. Also, as we work on a project basis, should I consider the project value as well? Or should incentives be some percentage of employees' salary or a fixed amount for all (irrespective of salary)?
Please help me as this is very important and urgent.
Kind regards,
Shruts
From India, Delhi
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1Please help! How can we decide how a bonus/incentive should be given to a particular employee when you cannot measure achievement in terms of revenue target? My organization is in the entertainment industry and is planning to start an incentive/bonus plan for client servicing, creative, and operations staff. How can we decide how much we should give as a bonus? For Marketing, there already exists one plan which they do not want to change.
I have developed a list of objectives that are important in these areas. Also, as we work on a project basis, should I consider the project value as well? Or should incentives be some percentage of employees' salary or a fixed amount for all (irrespective of salary)?
Please help me as this is very important and urgent.
Kind regards,
Shruts
From India, Delhi
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Incentives are nothing but variable pay based on the individuals performance. Why you can not measure the performance if you have set KPIs? pon
From India, Lucknow
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From India, Lucknow
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Dear Pon,
Revenue generation is the work of the Marketing department, those who are working for business development. Once the project is secured, the entire staff (operations, creative, client servicing) works on it, but it is considered the project of the Business Development personnel who obtained it from the client.
So, I want to know, should incentives be based on a project or on a monthly salary since they are expected to work on every project the company secures, and thus, revenue generation on their part cannot be measured, even though we have KPIs?
Please provide your views in broader terms.
From India, Delhi
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Revenue generation is the work of the Marketing department, those who are working for business development. Once the project is secured, the entire staff (operations, creative, client servicing) works on it, but it is considered the project of the Business Development personnel who obtained it from the client.
So, I want to know, should incentives be based on a project or on a monthly salary since they are expected to work on every project the company secures, and thus, revenue generation on their part cannot be measured, even though we have KPIs?
Please provide your views in broader terms.
From India, Delhi
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In that case, you can consider offering incentives on a project basis and allocate them annually. Normally, Performance-Linked Incentives (PLI) are measured and distributed based on the financial year (April to March). PLI varies, and you should have a system in place to measure individual performance.
Regards,
Pon
From India, Lucknow
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Regards,
Pon
From India, Lucknow
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Incentives on project value would be more appropriate. It will work as good motivation to get more projects/big projects.
You can outline the general working methodology/achievement criteria in terms of GOALS for each employee category separately i.e. Operations, creative, client servicing, etc. i.e. from start-up of the project to its successful completion. Give weightage (say 10%, 20%, etc.) to each goal. At the end of the financial year, you can measure the performance of your employees for each goal and calculate the incentive amount. Put a limit on rating (e.g. 90 out of 100 is the highest marks or rating) which will take care of your project margin.
Hope this will help you.
Regards,
Vaishalee
From India, Pune
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You can outline the general working methodology/achievement criteria in terms of GOALS for each employee category separately i.e. Operations, creative, client servicing, etc. i.e. from start-up of the project to its successful completion. Give weightage (say 10%, 20%, etc.) to each goal. At the end of the financial year, you can measure the performance of your employees for each goal and calculate the incentive amount. Put a limit on rating (e.g. 90 out of 100 is the highest marks or rating) which will take care of your project margin.
Hope this will help you.
Regards,
Vaishalee
From India, Pune
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Identify the criteria upon which employee’s performance will be based first and determine what percentage of project income will be incentive budget. Thanks Tunde Babs
From Nigeria, Lagos
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From Nigeria, Lagos
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Hi there,
Surely, incentives are based on performance measurement. Since you are using Key Performance Indicators as a way to measure performance, then you measure according to their deliverables. You give weight to the deliverable in percentage linked to the total score. All projects are measured by agreed deliverables.
However, you can make it more competitive and time-bound. If you want to have your evaluation efficient, you can design your performance appraisal evaluation into quarters where you check how your employees are progressing with their projects and deliverables and assign weights for each quarter. This way, you have an early warning on projects that are not progressing or facing problems.
From Oman, Muscat
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Surely, incentives are based on performance measurement. Since you are using Key Performance Indicators as a way to measure performance, then you measure according to their deliverables. You give weight to the deliverable in percentage linked to the total score. All projects are measured by agreed deliverables.
However, you can make it more competitive and time-bound. If you want to have your evaluation efficient, you can design your performance appraisal evaluation into quarters where you check how your employees are progressing with their projects and deliverables and assign weights for each quarter. This way, you have an early warning on projects that are not progressing or facing problems.
From Oman, Muscat
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Hello Shruts,
A similar situation exists in the Power Generation sector.
I am not sure about the private players, but NTPC has a model in practice for over 25 years.
The total incentive payable is usually divided proportionately among the various departments that contribute to power generation. The Operation & Maintenance staff receive the major share—they are similar to the BD/Marketing guys in your situation. I don't recall exactly, but all the other departments receive the rest of the share equally distributed among them—right down to the office peon who supports the whole effort indirectly, albeit on a minor scale.
All those eligible for the incentives (probationers and those on leave beyond a specific period are not eligible) receive the incentives based on their salary scale/basic. Additionally, the model, if implemented, will need to be preceded by a very clear and transparent discussion among all the departments concerned to avoid any situations causing resentment (the BD guys may feel somewhat disappointed to lose a part of 'their' share, but they need to be convinced to consider the bigger picture where they also stand to gain much more in the long run).
I hope these insights are helpful to you. It would be beneficial if there's someone in this forum who works there—they could provide a more detailed response.
Regards,
TS
From India, Hyderabad
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A similar situation exists in the Power Generation sector.
I am not sure about the private players, but NTPC has a model in practice for over 25 years.
The total incentive payable is usually divided proportionately among the various departments that contribute to power generation. The Operation & Maintenance staff receive the major share—they are similar to the BD/Marketing guys in your situation. I don't recall exactly, but all the other departments receive the rest of the share equally distributed among them—right down to the office peon who supports the whole effort indirectly, albeit on a minor scale.
All those eligible for the incentives (probationers and those on leave beyond a specific period are not eligible) receive the incentives based on their salary scale/basic. Additionally, the model, if implemented, will need to be preceded by a very clear and transparent discussion among all the departments concerned to avoid any situations causing resentment (the BD guys may feel somewhat disappointed to lose a part of 'their' share, but they need to be convinced to consider the bigger picture where they also stand to gain much more in the long run).
I hope these insights are helpful to you. It would be beneficial if there's someone in this forum who works there—they could provide a more detailed response.
Regards,
TS
From India, Hyderabad
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Thanks everyone for your valuable inputs. Keeping the situation & your inputs in mind, I designed the incentive slabs and my boss really liked that. Thanks everyone. Warm Regards
From India, Delhi
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From India, Delhi
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Hello Shruts, All one can say is: That’s CiteHR for you :-) If not confidential, why not share the model you implemented? Many could benefit in the process. Rgds, TS
From India, Hyderabad
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From India, Hyderabad
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Hello TS,
I cannot share it in totality, though the basic idea I can definitely share. I combined the project value with the salary, then decided upon the share that we can offer as an incentive. After that, I set goals and created different levels of achievement for every profile and fixed the incentive amount. Based on the level of achievement, we will pay incentives. The levels are clear, and anyone can objectively measure them.
Please provide me with your input and if any improvements can be made.
Thanks and regards
From India, Delhi
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I cannot share it in totality, though the basic idea I can definitely share. I combined the project value with the salary, then decided upon the share that we can offer as an incentive. After that, I set goals and created different levels of achievement for every profile and fixed the incentive amount. Based on the level of achievement, we will pay incentives. The levels are clear, and anyone can objectively measure them.
Please provide me with your input and if any improvements can be made.
Thanks and regards
From India, Delhi
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Hello Shruts,
Since you have just implemented the slabs, suggest watching for a few months or until the first few projects are completed—whichever is later. You will then have first-hand feedback directly from the employees themselves. What you have right now is akin to the recipe of a good dish in the cookbook—you need to wait until you actually cook it and taste it to give the final OK. Any changes would be better attempted then.
All the best.
Rgds, TS
From India, Hyderabad
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Since you have just implemented the slabs, suggest watching for a few months or until the first few projects are completed—whichever is later. You will then have first-hand feedback directly from the employees themselves. What you have right now is akin to the recipe of a good dish in the cookbook—you need to wait until you actually cook it and taste it to give the final OK. Any changes would be better attempted then.
All the best.
Rgds, TS
From India, Hyderabad
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Hello TS,
Thank you for the feedback; it always helps to improve. I have also considered another plan, but management liked this one. For actual results, we will have to wait at least a quarter. It would be great if you could share some more ideas.
Best Regards,
From India, Delhi
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Thank you for the feedback; it always helps to improve. I have also considered another plan, but management liked this one. For actual results, we will have to wait at least a quarter. It would be great if you could share some more ideas.
Best Regards,
From India, Delhi
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