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Comment by cplusplusfellow | Hacker News Reader

Companies really, really want their employees to perform specific behaviors that they desire, except they don't want to compensate them extra.

In truth, a base pay + bonus structure that is commensurate with the outcomes the company desires is the best solution.

Leaders shouldn't trust folks who go into HR to come up with these.

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Companies are also really good at coming up with values and creating bonus structures that incentivize going against those values. Most companies like to say they value teamwork and collaboration, but also give out individual awards to people who do the most visible work while ignoring the contributions of the 100 other people that made a project succeed. Nothing kills morale faster than giving awards and bonuses to the manager that forced massive overtime to complete a project, and giving the team a pizza party.

Yea I experienced that from the customer side. I purchased a car, the sales person wanted me to submit a survey on how she did. When I got the link for the survey, it was to rate how their department was, and it was attached to their manager. I found out later the employees get $100 per review, but we are not rating them, we are rating the manager, they get no recognition. I'm not going to support systems where the managers get all the credit and the employees get nothing but $100 per customer as an incentive to make the manager look good..

My last job had a bonus structure of “everyone gets $X each year, as a percentage of yearly profit, based on time worked at the company up to a year”. On average my bonus was about $8k - no strings, no requirements. If you started that year, your bonus was prorated.

My current position is merit-based - over the year you have several goals you set with your manager like learning something new and presenting it to the team, attending a trade conference, etc. Yearly bonus is x% of around $15k, and that % is based on how many of those goals you accomplished.

Both systems feel tangible, and the rewards feel like they’re worth it. The former being completely without any requirement was really nice, and also I don’t mind having self-improvement and professional learning goals to work towards for a sizable bonus.

Yup, and in this case a lot of the numbers that went into the math were department wide macro numbers. I could do amazing at my job, the numbers wouldn't change, I could do nothing, the numbers wouldn't change... and it was a mystery/ a core to get a feel for how the math would work out. That opaqueness was an issue too.

Better to just do a low amount of profit sharing - if we all win you win, if we all lose you get nothing; its way less stupid than saying "well you are being dinged for our failure on X thing" when they had no ability to impact it and often times that's not even tied to profitability.

Yeah I worked at a place that did that. Company hits X,Y,Z numbers and everyone got what was equivalent to a paycheck as a bonus. A number that seemed to scale well and people cared about / appreciated.

The times we hit two or three pay checks were great.

That's most of the point of the employee-employer relationship. The company pays a flat rate and tries to maximize output reaping the extra output of over-achievers. In return the employee is relatively insulated from business risk (well except for layoffs to juice the stock price).

If you can be fired at any point then how exactly are you insulated from the business risk? You are only insulated from the upsides such as record profits etc. All the downsides are still there.

Compared to freelancing. If you're an independent contractor you have to market yourself, close deals, manage client relations, and of course do the actual individual contributor work. You have to convert a stream of individually unreliable prospects into a steady income.

There's plenty of firms that run at a loss from time to time but don't immediately cut jobs or pay.

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