ART BONUS PLAN
I did a slight edit on the email I sent back in April...
First to address the problems with the current bonus plan:
1) Bonus amounts were given out too “negligently” - Multiple people maxed out the bonus to easily. This resulted in both top performers and low performers getting similar amounts.
2) No forecast-able budget amount - $3,000 a week? or $6,000 a week?
3) Top catalog performers pace themselves to cap out on Friday afternoon (resulting in lower than possible room outputs) See image on right for the amount of times people have conveniently gotten 100 catalogs per week to perfectly hit the last bonus tier.
This proposed model addresses all three issues.
First thing: set the "budget" you want to allow for bonus, for example $200,000 a year (last year was around $340K). Once you have that budget you can split up the "allotments" accordingly.
The gainshare bonus plan works as follows:
1) Set a baseline or "quota" - Reach the baseline, become eligible for bonus. Don't reach baseline... no bonus for you.
2) Using the budget, catalogs overs budget count towards your bonus amounts. Like extra points or a multiplier (you will see below)
Now for the example
Lets say you have:
5 artists and a weekly budget of $1,000 per week or $52,000 per year
and weekly "quota" or baseline of 75 catalogs (meaning get over 75, and become eligible for bonus)
At the end of the week, 3 of the 5 artists went over 75, becoming eligible for bonus. (so 2 artists do not get bonus)
Combined the 3 artists went 60 total over the goal:
Artist #2 did 95 catalogs (20 over)
Artist #3 did 105 catalogs (30 over) &
Artist #4 did 85 catalogs (10 over)
[before reading next 3 sentences, realize that there is a highly visible spreadsheet that everyone uses. Removes actual math]
Now you can divide the weekly amount of $1,000 by the amount over goal, 60 in this case, and determine that every catalog over goal = $16.67 per catalog.
$1,000 / 60 = $16.67
See image below for example of what was said above:
Again, how it addresses the 3 issues of the current payplan
1) was: out of control $ amounts - Now it's fair but properly distributed amounts
2) was: random un-forecastable financials - Now, whatever you set as the budget, is the yearly budget.
3) did: lead to pace issues or no working incentive - Now every single catalog matters, from Monday morning to Friday afternoon. They could cost themselves $100 by half-assing a Friday.
Anyway, we can talk about this tomorrow hopefully.
I can show several more examples that Mandy has prepared based on the last month of actual numbers.