Providing an incentive program (a.k.a. bonuses) for the leadership team of any size business is crucial because it shapes the actions and behaviors of the most visible people in the company. So there’s a tremendous trickle down effect. Additionally, it clearly ties the leadership team to the critical goals of the company and quite frankly, if the goals are not met, there should be no bonuses. Lastly, if properly structured, they help foster a sense of team for the CEO and VPs of a company and team effort will always outperformed individual, “silo-ed” efforts.
The following is a suggested framework for goals and bonuses that should be very applicable for most small or medium size businesses.
The last element is the varying goal weighting by function within the leadership team, which I propose to be as follows:
The general theory here is that certain people will have more influence on certain elements and weighted accordingly (e.g. Sales: revenue, HR: employee-sat, Finance: profit). But equally important is that all leaders are tied to all 4 goals so that, as a team, they largely succeed or fail together.
Please let me know how you feel about this. Do you agree? Disagree? Comments welcome.
Related: More on why skin in the game is important for management.
Similar Posts:
- Potential Tax Changes on the Horizon
- Four Thoughts for Negotiating a Business Deal
- Setting Your Financial Goals With a Goal Worksheet
- Innovating Like 3M With Lead User Research
- Have You Made it Your Business to Tweet?
Post Comment