Bonus Plans

A quick way to destroy trust?

Have a bonus plan no one understands:

If people don’t know how the prize is earned—

You’re not rewarding performance.

You’re just guessing.

And guessing destroys motivation.

Most bonus plans fail because
they’re vague, hidden, and unfair.

Here’s how to fix that:

✅ Pick clear company goals
— No fluff. No buzzwords.
— Just 3 measurable priorities.

✅ Split the bonus 50/50
— Half based on company results.
— Half based on personal goals.
— Fair. Simple. Balanced.

✅ Score company goals
— Only count goals that hit 70% or more.
— If one misses, don’t let it sink the rest.

✅ Track individual goals with numbers
— 3 goals per person.
— Set them early. Score each 0–100%.
— Not just “met” or “not met.”

✅ Use this formula:
— (50% × Company Score) +
(50% × Personal Score) = Final Bonus %
— No guesswork. No surprises.

✅ Apply judgment — and explain it
— Managers can adjust by 10–20% for
things like leadership or extra effort.
— But only with clear reasons.
— And it must be consistent.

This isn’t about money.
It’s about meaning.

It’s how you turn effort into impact—

And loyalty into culture.