Company owners, partners, and executives have long attempted to incentivize higher performance by offering bonus plans to their employees. In short, if you perform at a higher level, you will be receive a financial reward. Try googling “why bonus plans don’t work”, and you will be presented with more references than you can count, many of which affirm the notion that bonus plans simply do not work. In fact, there are many examples that show performance actually declining after an employee receives a bonus. This creates a significant challenge in business today.
So why exactly do bonus plans fail to achieve their objective? The answer can be boiled down to 2 primary explanations:
- Employees are not necessarily motivated by money. Many motivators are not directly tied to money. Employees may place primary value on concepts such as personal flexibility, professional control, and time away from work. In Tamara Lowe’s book entitled “Get Motivated”, she presents an evidence-based structure that outlines individual differences in motivational DNA based on her research of over 10000 individuals. Her conclusions support the idea that there are many types of motivation, and monetary gain is only one of many possibilities.
- Traditional bonus plans typically offer an upside, with no downside. If an employee performs at a higher level, they might receive a bonus. But what happens if they perform at a low level? In many cases they would continue to earn what they are accustomed to earning. If an employee is guaranteed the financial reward that is most familiar to them as long as they perform below or at minimum expected standards, they may show little interest in increasing performance levels in order to obtain a higher reward. Good is the enemy of Great.
So how is OnusOne different?
- OnusOne allows for individual professional differences. Some employees would rather produce high quality work at a lower volume of production, and are willing to be paid less as a result. Other employees are willing and able to produce high quality work at a higher level volume of production, but would prefer to be compensated for doing so.
- OnusOne consistently protects profitability. Lower production volumes result in lower payroll costs. Higher production volumes result in higher revenues that enable employers to cover higher payroll costs.
- OnusOne has an upside, and a downside. In contrast to traditional bonus models, employees are paid more for producing more, and less for producing less.
- OnusOne rewards are immediate. We are an instant gratification society. OnusOne allows an employee to be almost instantly compensated for higher levels of performance, and the built-in financial safeguards guarantee that an employer will always have the cash available to pay any increase.
If you're interested in seeing how the OnusOne system can empower growth, one employee at a time, schedule a demo today.
Jason is the co-founder and managing partner of OnusOne, by Pay-for-Performance Solutions LLC. OnusOne is a web based system that designs, installs, and administers shared-risk employee compensation models for fee-for-service industries. Jason has a proven track record of leadership success in the healthcare industry. He has over 20 years of experience building and strengthening clinical teams, and creating and developing effective leadership teams.