2013-06-05

Co.Exist

How Would You Feel If Your Co-Workers Decided Your Bonus?

If you do a good job, you get a bonus from your boss. Not so for companies using Bonus.ly, a service that lets employees decide who among them deserves some extra cash.

Employee of the month and "spot award"-type bonuses leave it to managers to decide who’s doing a good job. If they like a particular employee, lucky them; if not, tough luck. But with Bonus.ly, a peer-to-peer bonus scheme, employees get to decide who the top performers are.

It works like this: A team-leader goes to the site, signs up, and sets an overall budget. Bonus.ly recommends about $100 per employee, per month. The staff then reward each other in, say, $10 or $20 amounts. At the end of the month, the company settles the balances.

Bonus.ly founder Raphael Crawford-Marks argues that peer-to-peer is a better way to reward people in the knowledge economy, where responsibility tends to be more scattered than in traditional, hierarchical organizations. "Because of flatter teams, managers often aren’t aware of what’s going on in their teams," he says. "These other bonus paradigms don’t do a very good job of giving a tight feedback loop—of rewarding in a timely and publicly manner when employees do something really well."

He believes that Bonus.ly is also a way for managers to keep a handle on team dynamics—who’s valued and liked, and who doesn’t get along with the rest. This sets up the possibility that friends will simply reward friends. But Crawford-Marks says transparency can keep that from happening. Every award is listed publicly in a Twitter-like feed, which discourages naked favoritism.

Bonus.ly’s first client last year was a 78-person team at Oracle. Since then, about 40 companies have signed up, using a range of currencies. Nearly four-fifths of the Oracle employees have rewarded others so far, suggesting a solid level of engagement.

Of course, transparency around sensitive issues like pay can go too far, as this ridiculous new reality TV show demonstrates (it’s called Does Someone Have To Go? and you should resist the urge to watch). But there’s no reason managers should have all the fun: a bit of peer-love never did any harm.

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9 Comments

  • Insight247

    Simply put, I'd be devastated if my colleagues knew what my bonus was, never mind calculated it on my behalf.

    You could argue that bonus gossip always gets out in the end, but perhaps they could consider using some kind of technology to industrialise the process, a software  that keeps bonuses private.

  • Shane Guymon

    I actually believe that more transparency in the workplace is good. I feel like everyone's salary should be public and raises and bonuses should be decided by peers. I agree that in many companies the people who decide how much of a raise or bonus someone gets is too far separated from the people. In larger companies employees become a name and a number on a spreadsheet.

    The problems shown in the video are problems with "change." After the "newness" wears off than these problems slip away. If someone was previously powerless at making any type of BIG decisions in a company all of a sudden is empowered he is going to jump on it. It's like Christmas morning with a new toy. You are super excited and play with it. Then as the newness wears off it just becomes another toy. Once the newness wears off the transparency becomes the "normal."

    There are already companies doing this. Valve is a GREAT example. If you read through their company employee handbook ( http://www.valvesoftware.com/c... ) it explains how it all works.

  • Bamidele Olagoke

    I will be very happy,I will pray for wisdom,  I will think fast to know what i will you it for,  And i will have an investment,  Then i will travel..........................

  • Baxtersbay

    Unfortunately, sometimes your coworkers are just as clueless about how much you do as your boss. The ones who generally do nothing don't deserve to have a say in who gets bonuses because they tend to be resentful of those who typically show them up. In any organization, 20% of the people do 80% of the work. Companies should be focused on finding those employees who are productive and efficient and letting them decide who deserves a bonus and who deserves to be fired. 

  • Michael

    100% agree with your 80/20 rule. Reward hard work with recognition not simply money. You'd be suprised at how many are craving recognition like a public acknowledgement, vs simply more money.

  • Sabrtooth

    So instead of being popular with the boss, you have to be the popular person with the whole office? Yeah, sounds like a great idea courtesy of the social media generation.

    And, yes, I am hating because being the nice guy doesn't always get the job done.

  • Rob

     Exactly. Every system has inherent flaws, and every system is subject to the halo effect.

    Perhaps the solution is a mix of all three - actual measurable metrics, boss input, staff input.

    BTW, sometimes, the nice guy is the one keeping everyone away from each other's throats. If overall productivity goes down when the nice guy is off, then he is providing a benefit, even if it isn't always apparent. I remember one company where morale plummeted after the 'do nothing' person was laid off. Turns out, they were adept at keeping the two manager's egos in balance and not allowing one or the other to dominate. Without that, the office devolved into a battle of wits, and spiraled down.