A Way to Bonus Technology Departments
Having been in the technology field for over 5 years, one thing that’s always frustrated me is the lack of a solid bonus structure for tech departments. I’ve seen sales people receive commissions, customer service people get bonuses, but haven’t seen this same incentive carry over to tech.
Now yes, technology staffs, on average, get paid more than other departments (at least from my experience). I’d also add that a “thank you” or “good job” doesn’t always need to be in the form of a check. However, from time to time, it is nice to get something extra for going above and beyond.
Why Companies Should Bonus in the First Place
The biggest reason that any company should bonus their employees is simple; it reinforces a desired behavior. This is no different than giving your dog a treat for doing a trick. It communicates, in a positive way, a company’s goals and what is expected from everyone that works there.
The second reason to offer employee bonuses is to promote loyalty. Every member of an organization knows they are paid to do their job. But even the best employees can begin to feel bitter when they help the company achieve greater profits, while they don’t see another dime.
By sharing profits with the team, a company shows that it genuinely appreciates their effort and acknowledges that it couldn’t have been successful without them.
A Way to Bonus Technology Departments
Now that we have determined bonuses are a good thing, how do you structure one for a technology department?
It’s easy for sales people. They are responsible for bringing new business. So, quite simply, they get a percentage of that new business.
The same is true for customer service. Their job is to retain business. To bonus them, they should receive a portion of what they’ve helped the business keep.
But what does tech do?
Technology departments are responsible for helping a company save money. They do this by applying tech based solutions to help a business run more efficiently so it can accomplish more with less. Therefore, to bonus a technology department, give them a percentage of what they save.
Let’s say that there is a customer support department with 10 people all making $20,000 a year. One of their common daily tasks takes an average of 10 minutes to complete and is performed 60 times in a day. After reviewing the company as a whole, it is determined that this particular process needs improvement, so the tech department is called in to help.
Now let’s say that after tech implemented their solution, the process that once took an average of 10 minutes to complete, now takes an average of 6. That’s a 40% increase in productivity.
This means every 2 employees can now roughly do the work of 3, which takes the department’s production potential from 10 employees to 14 without the need for additional staff! This saves the company $80,000 a year in salaries that would have to be paid if they wanted the same level of production.
Don’t you think it’s worth awarding tech a percentage of this savings?
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The Benefits of Doing It This Way
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A Focus on What’s Important
With any improvement project, you need to make sure you solve the problem with the biggest possible return to the bottom line. Technology has the potential to improve so many different areas of a business that this can be hard to find.
If a company offers a bonus based on a solution’s impact, a tech staff will look at each project differently. Instead of proposing solutions that are fun, or give them an opportunity to learn something different; they’ll focus on those with the greatest potential for results.
This successfully merges the objectives of management and technology to achieve a common goal.
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Team Building
Tech departments from any company are usually criticized for antisocial and elitist behavior. Nothing illustrates this better than the SNL skit with, “Nick Burns, Your Company’s Computer Guy”.
By attaching a bonus to performance, tech will learn that in order for their effort to have the greatest effect, they’ll have to train others how to use it (reference the example above). By putting everyone on the same team, tech will stop looking at co-workers as an interruption, and begin seeing them as a partner.
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Improved Morale
Everyone wants to know that their work is noticed and appreciated. Technology departments are no different.
Along with the benefits mentioned above, a merit based bonus reinforces a technology staff’s feeling of accomplishment. It shows them that their work is used and has value. This improves morale and excites the team to tackle the next project.
Now the question is… when are you going to start putting this to work for you?
Oh by the way… YOU’RE WELCOME!
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December 30th, 2006 at 12:45 pm
Please take into consideration the fact that bonuses are dangled like carrots. I have only seen 1 carrot in since I began there…and that was “Back in the freakin Day”. We are given the opportunity to obtain bonuses, but the goals we are required to hit are completely absurd, that they might as well be a fairytale. If I slept under my desk, and worked the other 20hours a day, perhaps I could obtain my goal. But since it’s a “team goal” and not an individual one, everyone in our department would have to do the same. I cannot see how living at work in order to obtain a monetary bonus, which is part of a greater bonus structure which was never officially approved, could possibly make us better, more productive workers. That carrot is “The Man’s” way of making us think that our situation can improve. When in all actuality, they want us to continue to be mindless drones that just continually take orders and never ask questions. As far as “The Man’s” concerned asking questions can increase our knowledge and awareness that we are getting screwed. If we realized how badly we are getting screwed and told them “Hey F-U Buddy!”, then who would do all the actual work, so they could sit home on top of their piles of money?
February 2nd, 2007 at 11:00 pm
I miss you man…email me sometime