When does an employee deserve a bonus ? When should you as an employee ask for one or expect one and when should you as the person responsible for paying bonuses offer one.
The answer comes from the expectation you have when you hire someone.
When I hire someone, I hire them because I expect them to be good to great at what they do. I dont want to hire some shlep that goes through the motions to collect their money. I dont want someone who does whats expected of them as an employee and nothing more. The people who will find success working for me are those who love the challenge of excelling at their jobs and find away to exceed all expectations.
Now if you are a person that does just that. Challenges yourself. Excels. Makes the company more competitive, our customers happier and our bottom line bigger, should you automatically get a bonus ?
Of course not. You are doing exactly what you were hired to do. You were hired to be great. You are expected to do great things. We pay you to do just that. You dont deserve a bonus.
On the flipside, if you are doing all those things, then its going to be my goal to keep you happy. There in lies the challenge for employers. Happy means a lot of different things to different peope. Happy can be where you live, what projects you work on, what personal satisfaction you gain from the job, or maybe just making as much money as possible. Its my job as an employer to know what makes you happy and to try to get you there.
If i cant, you are going to take those special skills of yours and go somewhere else.
Of course the problems come when an employee thinks he or she is special and invaluable and the employer doesnt. One thing i have learned over the years is that self evaluation is not something anyone is very good at. Few people think they suck at what they do, but the ones that are the best at their jobs spend the least amount of time worrying about how valuable they are to their employers and the most amount of time working at excelling and improvingat their jobs.
My rule of thumb is that the people who tell you howvaluable they are usually arent, while those who dont, usually are.
Which leads to my perspective on paying voluntary bonuses.
I pay bonuses based on the FINANCIAL success of the company first. If the company is making money. Actually cash flow positive, then Im always going to be open to paying bonuses that reward those that have earned rewards. If the company is making progress, but is not yet profitable, but on its way, then Im open to paying bonuses that are more in line with saying “thank you for sticking it out with me, together we are in the process of building a company. When i make money, you will make money”.
This is all a long form way of telling a very short story.
employee: I just did something great. I want a bonus because I did something great.
Me : I know. Its wonderful. You are wonderful. Which is exactly why I hired you. I expect you do to great things and I pay you to do great things. Dont you remember telling me how great you were when we interviewed you ?
employee: Yes, but, shouldnt I get a bonus ?
Me: No. But if you keep on doing great things, you will get far more opportunities and we will both will hopefully benefit from that.
Hey Mark – I’m replying before reading anyone else’s comments. I am a top performer in my job and 100% totally agree with your opinions on bonuses. The only drag is when you work for a huge company (top execs don’t know your name) and your managers are staffers that couldn’t do, so in an effort to keep them from doing bad things for the customers, their managers made them managers (I’m sure you’ve the scenario – in music school, we called it “Those that can’t do, teach”). Anyway, I see people that “do their job” (good to great) get bonuses all the time while I am lucky to get one bonus. Fortunately, I’m smart enough to be able to look at the situation as a motivator to excel even more at what I do. I am starting the 4th job in the same company this week, not because I an unsatisfied, but because I’m always looking to move up and quite frankly, I have not yet found a position in which I can positively impact the company in major way. Fortuantely, this new position has a lot of promise as I am coming in on the ground floor of a project that has the potential to completely change the way our customers are served. I hope to part of making my firm a better place.
Anyway, all that to say… while I don’t agree with everything you say, I admire your determination, your work ethic and your willingness to express yourself despite what others may think or say. And I will borrow from the latter to say that I think you are an excellent role model for anyone who wishes to excel in business.
Thanks for the inspiration and please keep the thoughts coming!
Best regards,
Patrick Jones
Comment by W. Patrick Jones -
However, there is a very elsastic supply of good coaches, you can’t compare this to a normal business principle. You are at their mercy, not the other way around. So consider that business scenario Mr. Mark Cuban MBA. Do whatever it takes to give Avery what he wants, and don’t let your antics get in the way.
Comment by Shoes -
When I first started working it was for my dad in his grocery store. In the grocery business there are no ‘bonuses’ – your bonus is keeping your job. But, at a certain point after working for him 5 years I asked him for a raise. From the time I started working for him I was living at home (above the store) and progressed into a marraige, having a newborn, owning a house, paying taxes, etc. My pay went up 50 cents an hour in those 5 years and I was working 4 or 5 other part time jobs to make ends meet. So, I asked him for a raise. He looked at me and asked why I deserved a raise, and I listed all the things I did that I felt were above and beyond why I was hired, and he said those were all things he expected me to do (including coming over to the store Saturday night and mopping the floor and Sunday when we were closed to clean out the meatcases, as I had done those since I was 7 as a family member and he still expected it). Then, the discussion boiled down to all the family responsibilities I’d taken on (marraige, children, house, etc.) and that I needed the raise to support my family. He answered, “Well, that’s your bed – you made it, you sleep in it..” and denied the raise. As much as I hated to do it, a few weeks later I found another job as a meatcutter paying twice as much and quit. He never forgave me for it, but I had a greater priority and responsibility to my family.
But, looking back, it gave me a whole new perspective on what I thought I did and what I was expected to do, and how I had to evaluate my worth to my employer as he or she had to evaluate my worth to them. From that point on I always worked looking at myself thru their eyes, not my own, and how I could better emulate my next position I aspired to so I could give myself my own raise (or bonus, per se). And, I’ll always thank my dad for giving me that perspective – how can I increase my worth to him – something I didn’t do until too late.
Comment by Pops Fassett -
If Mark wants to give Avery a raise, then good for him, but Avery shouldn’t be requesting one. He’s still a 2nd year coach, and still needs to prove himself. Remember how great Paul Westphal was his first few years in Phoenix.
Comment by Coffee -
For the millionaires (e.g. coaches, athletes), I think the passion of work and the reward of winning can be a form of bonus. But you pay to an average Joe good money to keep him from looking for jobs elsewhere. Loyalty is overrated and outdated in this day and age. If someone is great at his job, and you just think he’s supposed to be great and should be happy enough, you shall not be shocked when he submits his resignation.
Comment by Lee -
Most of the time employess just want to feel appreciated. Money definitely isn’t the only type of bonus an employee can receive..
Comment by Port Orange Real Estate -
Wow. After reading your post, I feel that I am on the right track now. Why didn’t I think of that. Great post there. ^_*
Comment by Spluch -
Do police officers get a bonus for every arrest? A firefighter for every fire put out? No, that is their JOB. Sports however is a different animal. With sports contracts I feel most contracts should be performance based. Nothing sucks more than having your favourite team pay a player 5 million dollars and then get little in return. Although I guess being the guy paying that 5 million would suck worse.
Comment by Scott Gardiner -
In most companies, there are employees that don’t directly influence the success or failure of a company. Given the prior, every worker has a market value what he/she is worth. So why should the employee suffer in compensation because the management decided to invest in the most advanced fly trap.
If the base compensation was fair, than no one would ask for a bonus. I would much rather see all my money sooner than later. In certain careers, the bonus is a way for employers to keep employees because you wouldn’t leave midyear if you have 20% of your total comp coming in 6 months.
Doing great things at work is great, but as I found out, it doesn’t pay for my fiancé’s engagement ring.
Comment by Cyril -
Mark
I recently became a big fan of the MAVS and of yours and have been keeping up with your blog. Have to say I love it. Your opinions and outlooks are great. I have wanted to write you for some time now and this posting is the perfect time.
First off — Would you PLEASE buy the Rangers. I think that your spirit could turn them around.
Second — What is your opinion? I have worked for my company for almost 5 years now. Love my job. Enjoy my boss. Do I feel appreciated … No. Do I let that affect my performance….No. However I am at my wits end. When I started with the company our department had 4 people in it. Each time someone has quit/fired I have graciously without question or request for compensation taken on the extra load. Now it is just me doing it all. Honestly I love it….I hated having to deal with everyones BS reason for not being at work everyday. Now….here is where I need your opinion. I understand that our company is not doing great financially, but I am not asking for much ($5k – $10k more a year – that’s it). My boss tells me you are doing a wonderful job and you are a great asset, but I am not even getting a raise this year. Well bo-hoo you make 6-figures and I barely clear $35k. Is it wrong for me to want something for helping to get this department together and running strong??
Hope to hear back from you!
Comment by S.J.D. -
don’t they have contracts that people sign saying they are gonna make x amount of dollars. maybe Mark should just pay him a set amount per win, and maybe more for a playoff or champ. win. at least it is a partly objective assessment.
mark is correct in that people cannot self-evaluate. It is like trying to cut your own hair, you cant get the proper view/angle to do a good job.
Comment by Dan -
It’s truly amazing how many people suffer from Entitlement Syndrome
Comment by eSchuerzen -
Mark I have recently discovered you:-) I love your energy and odvious Love for life & Sports!
I so agree with you and your outlook on this subject. I am a Singel mother of 4 and I work at a Union Gospel Misson I make 1,600.00 a month, but I so love my Job I save lives and help people every day that is my bonus!! So I encourage everyone to look at their JOB in that way and the world would be a much better Place.
My boy Levi is sitting here and he says to tell you to watch for Him He will be the next Great!! (hes only 13 but he goes to the local “Y” and plays Ball EVERY day. Keep up the Great work HUGS AMY
Comment by Amy -
Throughout the entire season Avery was talking about playing for a championship. And when your owner is spending as much as Cuban is then a championship is the expectation. His goal was to win a championship. He didn’t meet his goal or Cuban’s expectations. If Mark wants to give Avery a raise, then good for him, but Avery shouldn’t be requesting one. He’s still a 2nd year coach, and still needs to prove himself. Remember how great Paul Westphal was his first few years in Phoenix. Where is he now?
Avery did great things this year, but he still made crucial errors in key situations. Maybe he’s a great coach, maybe he benefitted from a good team. I don’t know, but give it 2 more years and we will. If he can sustain success then he’ll get his payday.
I wish my boss would give me a raise for just falling short of expectations.
Comment by Richie -
Mark,
It is interesting that this blog entry came after reports of Avery’s salary situation. He should get a raise if the Mavs got the two games needed to win the Finals this year instead of the Heat coming back and winning it. He is a great coach, but he must prove that he deserves a raise! Then you must be careful to keep him happy. The last time a Dallas sports owner didn’t keep a great coach happy, we have the Cowboys 10 years later without a Super Bowl championship! Do what you have to do and hopefully everyone will be happy in the end.
Comment by LaShawnda Munoz -
Avery is a great coach, no question.
But Mark has provided him every opporutnity to succeed in terms of giving him on the job training when Nelson was in charge, and to promote him in a yr when most assistant coahces have to wait like a decade to get a head coaching gig, Not only that but having a big payroll to get talented players for him to utilize.
This situation is like a player demanding a raise after having one great yr when he’s got a couple yrs left on his existing contract. What if the mavs lost to the spurs or the suns? or even gettin bounce in the first round? Does Mr cuban have every right to demand a paycut? Just like a player gettin paid 15-20 mil a yr and is only averaging 10pts ppg, the owner should say ” hey, lets renegogiate a lower salary, your productiion is pathetic”.
Most coaches now get a big raise/ extension after winning only one or two rounds of the playoffs just like a player getting a big contract after having a statiscally career yr in the final yr of the contact. Personally I dont think most of these deserve a big contact. Unless your last name is Popvoch, Jackson, Riley, you probably dont have a Ring.
Bottom line is Avery’s a great coach, he just started his career,he’s been giving every opportunity to succeed just be patient and Mark will take care of him in his next contract.
Comment by Mike -
I’m a season ticket holder and I agree with the Blog Master.
Comment by David C -
Reverse that. The supply of labor in good coaches and Avery’s case is inelastic- you cant replace him.
Comment by Jared Shojaian -
If you don’t want to tick off your employee (Avery Johnson) who is the face of the franchise… not yourself… then yes, you will give a raise. There is an inelastic supply of workers. However, there is a very elsastic supply of good coaches, you can’t compare this to a normal business principle. You are at their mercy, not the other way around. So consider that business scenario Mr. Mark Cuban MBA. Do whatever it takes to give Avery what he wants, and don’t let your antics get in the way.
Comment by Jared Shojaian -
Mark,
When you hire an employee make it clear to them what you expect and what can change if they excel and how long it takes to change. I understand there two sides to each story, and with normal employees it makes since to give bonuses for excelling at work. I mean at both my jobs I excel and get paid very little, while others are sleeping I am working, while they take 8 hours to do what I did in 2 hours, and when getting paid by the hour it would make since to pay the one employee more and get rid of the other, force a good employee to work for what other are is un moral in the business world, and by both of my bosses I have been told I deserve raises and more but they cant give them to me… Oh well, I understand.
Point of the story… If you have a good employee thats hard to come by and over exceeds everyones expectations, and you can afford to pay more and you cant afford to lose him… then give him a bonus… Only makes since.
Comment by Jack -
Mark,
When you hire an employee make it clear to them what you expect and what can change if they excel and how long it takes to change. I understand there two sides to each story, and with normal employees it makes since to give bonuses for excelling at work. I mean at both my jobs I excel and get paid very little, while others are sleeping I am working, while they take 8 hours to do what I did in 2 hours, and when getting paid by the hour it would make since to pay the one employee more and get rid of the other, force a good employee to work for what other are is un moral in the business world, and by both of my bosses I have been told I deserve raises and more but they cant give them to me… Oh well, I understand.
Point of the story… If you have a good employee thats hard to come by and over exceeds everyones expectations, and you can afford to pay more and you cant afford to lose him… then give him a bonus… Only makes since.
Comment by Jack -
“My rule of thumb is that the people who tell you how valuable they are usually arent, while those who dont, usually are.”
MC,
this is a bad business philosophy. it’s that of a skeptic (anybody who speaks up is not valuable?),
a philosohy that would encourage employees to ‘be humble’ versus ‘be proud of your work’. (altruist versus egoist)
We understand the insecure employee who feels guilty about not contributing is usually the loudest as they try and convince others and themselves as to their value.
But as for the productive employees who do lead to successful companies, they should be encouraged to put their activities and accomplishments in writing. to speak up about what they are doing to better the company.
no matter the position, by being able to send an email documenting what one is doing, to all decision makers in a company, makes the company smarter, better, faster to respond and share information versus the old school philosophy of ‘information is power so i should get and keep all the information i can gather”. or, as you suggest by your ‘rule of thumb, ,i should keep quiet so my boss will think i’m valuable because that’s been his experience.
if an employee is not valuable, maybe even a drag on the company, and easily replaced, it will be obvious by the info in the email reports over a period of time.
employees also have to be smart enough to understand their value/replacement cost to a company and i think it helps an employee understand this by seeing his accomplishments/ or lack of same, in writing, on a regular basis.
and for the productive employees, it is rewarding and encouraging to put accomplishments in writing and to be recognized for them.
KM
Comment by karl meisenbach -
Nothing wrong with Avery asking for a better contract–Nothing wrong with Mark saying “No”. How are WE even discussing this? There is something wrong with Avery making his concerns public, if in fact that’s what he did. I’m sure Avery had an agent. Surely they researched his market value, and even the in’s and out’s of the contract–if not, shame on them. Reward should go to sustained performance–should Avery be excelling towards the end of his contract, he should DEMAND more money. Until then, it should be completely up to Mark’s discretion if he wants to reward him for a job well done. As a business owner, I often give bonuses to my employees without them asking–but that’s a “bonus” meaning something on top of what was AGREED upon. And not to discredit what Avery did, but it’s not like he took the Bad News Bears to the Finals. They were really good when he came on. I’ll say this, there are other coaches in this league (or even a more seasoned Avery) that would have got the MAVS passed the Heat. Too many coaches in this league are given the glory too quickly–Avery, do it for 2 more years, then get PAID!
Comment by Keita -
I disagree with everyone here, including mark.
You are complicating something thats very simple.
The reason everyone complicates this issue of compensation is everyone wants to maximize their take at the expense of others. If you find that someone likes to fish are you going to just buy him a new fishing rod to reward them and just when you feel like it. A company is there to make money, period. If you hire someone, they should be doing as good a job as they can and if thats not good enough they shoudnt be there. Once you assume everyone deserves to be there who is there, then you can reward people based on a simple system. They should get a salary, to survive, and a percentage of the growth of the business, whether thru stock or dividends or profit sharing. If the work they do is not rewarding enough in itself then there is a problem anyway. I dont agree with individual bonuses, it says you are singling a person out to treat different in the guise of motivating them. Well you shouldnt have to.Period. Everybody is a part of the same effort, everyone wants the same things in life, to be successful, to be a part of something, to contribute, to be valued, etc. Im not saying everyone should make the same amount of money. (for those that didnt get anything I said). A strong company is when everyone is on the same page, everyone is focused on the same goals, and everyone shares the same desire to be successful. The compensation shouldnt be any different. To seperate work values and compensation values is to divide the company,and weaken it, (in my opinion).
Comment by Steve -
http://www.dallasbasketball.com/headline_A.asp?pr=
This link is a resonable perspective on Regarding the Avery/ Cubin contract issue.
Comment by Al Williams -
I really hope all this mess does not hurt the morale of the Mavs and their fans. Avery is great and did a great job-so did the Mavs but I feel like the morale might be slipping and the chemistry has been so great. It would be really sad for things to slip now.
Comment by mary -
It is true that you higher an employee with the expectation to be great. However, there are only a few coaches each year who reach the level you team just attained. Not to insult but to be exact two coaches reach that point each year. Then you factor those few coaches who reach the top of the NBA in their first year of coaching and I would say the list gets substantially smaller. My point is that your coach just did some extraordinary. He did something that has never been done before with your team. If fact, it was something your former, hall of fame caliber, coach couldn’t do with this team while he was the coach. That is not a slam on Don Nelson. I have a great respect for him and his accomplishments. So Avery’s accomplishment is not great but phenomenal! Next point I want to make is if he, Avery, is the man in charge, the one being held accountable for the team success or failures, then why are there other coaches who are subordinate to him getting paid more money? If you Mr. Cuban plan to hold Avery accountable for the team, which a head coach should be held accountable, then what message is being sent to subordinates as to who is in charge and more important to the team and organization? The higher you go up the corporate ladder the more responsibility and pay is received. I feel that your salary is above Donnie Nelson’s. As I assume Nelson’s salary is higher than say a player scout. I am not suggesting he should get hall of fame money but he should be compensated to a point so there is no questions about who is in charge and the rewarded for phenomenal accomplishment.
Comment by James McDonald -
If Avery did as bad a coaching job as Larry Brown last year do you think he would give money back to Cuban? I don’t think so. What good is a contract then, if there is no downside risk to the party signing the contract. A contract that can only be renegotiated up, is not a contract at all. Whatever happened to the days when a contract meant something. As usual the media will try and make Mark the bad guy in this, but Mark is absolutely correct in how he is handling it.
Comment by Nick -
If you are doing a good job on something just to earn a bonus, you aren’t a good employee. You should be doing your best REGARDLESS of the incentive of money. Especially in an econmy where 10 unemployed people would love to have your job…even for less money.
An employee is hired on the notion that they will be good at what they do. If you are JUST good, you are first in line when cutbacks come. Equate it to a basketball player: If you are earning $10 million dollars a season and are only averaging 8 points per game, why should we keep you? Yes, you may contribute some defense and rebounding, but an investment like that deserves more in return. They aren’t paying you to go out there and half-ass it. On the same not, a few good games isn’t enough to keep you safe from getting cut or traded.
Comment by Scott Boswell -
Mark, shut your suck! give the people that are making you rich(er) there share!
Comment by chris -
In reponse to #22, then why was he hired as a coach. A coach is hired to win titles not to just win 82 games. Avery was hired to lead this team to the NBA title, he led it to the finals and he got paid for it. Now, if he had won a title, Mark could have used his discretion to award a bonus.
Comment by Nipa -
quit foolin around and pay avery his money man, dang!!! the man just got you two wins away from the chip, he’s being paid less than alot of the coaches that didn’t even make the playoffs. give the man a better deal!!!
Comment by L -
quit foolin around and pay avery his money man, dang!!! the man just got you two wins away from the chip, he’s being paid less than alot of the coaches that didn’t even make the playoffs. give the man a better deal!!!
Comment by L -
Mark,
Assuming that your entry is a somehow a statement about the Avery contract situation….I’ll say the following:
Your example dialogue at the end does not apply to Avery’s situation. No one, even you, expected Avery to win more games in the first 82 than any coach in NBA history. No one expected him to lead us to within two wins of the NBA championship. His performance has been above and beyond anyone’s expectations and merits a “bonus” or new and improved contract if for no other reason than to avoid pissing him off and making him want to leave when his current contract expires.
Nathan
Comment by Nathan -
Mark,
Mark,
Apply this concept to your idea for selling movies. Have the stars etc work hard not just in the movie but to promote it. The bonus is the movie is popular, people go and talk about it and then give the stars sweet bonuses for their commitment to the team.
Oh, and if you are interested in food, check out our views on that at http://www.ideasinfood.com
-Alex
Comment by H. Alexander Talbot -
I totally agree with you! I hate the fact that people just go through the motions of work. I had this discussion with the people from wealthymen_dot_com, and we all came up with the conclusion that the output of one’s work is not as important as how they approach their work.
Comment by Elizabeth -
Hey Mark,
Give Avery more money.
Love,
MFFL Kevin
Comment by Kevin R -
I hope and pray en el nombre de Jesus that it ain’t my boy Avery. And if it is Avery, he absolutely deserves a bonus, raise, whatever you wan’t to call it. And the owner Marky should make the first move by doing just that. Shrewd, although not surprised.
Comment by raf -
Wow, no one connected the dots from this blog entry to the Star-Telegram article about Avery’s contract negotiations? I’m surprised.
http://www.dfw.com/mld/dfw/15104974.htm
Hopefully this doesn’t turn into a “500 other coaches could have done what Avery did” kind of thing like the last time an owner and coach didn’t see success eye to eye in Dallas.
Comment by Jamie -
It’s funny you would post a blog like this, I have an active Myspace account, and I’m sure you know this but you have a bitter former employee on myspace that likes to make friends with Mavs fans. I saw him for what he was, I thought he was just a fan, but he’s a bitter ex employee, something to do with money I believe. Anyways I’m with you, when you’re hired you should be in the business of fulfilling the expectations of your employer and mastering your job, it is when you take on extra responsibility and go “beyond the call of duty” that you should be considered for extra compensation. Notice I did not say expect extra compensation. It astounds me some of the stories I’ve heard from my own boss about the employees in my position before me. It’s no wonder employers are so skeptical.
Comment by Sabrina -
In HR practices, pursuant to pre-hiring, an interview with an offer usually establishes the quota of expectations from the “*manager, executive, owner*” to the *potential candidate* of employment given expectations to accomplish for a certain time period.
It is the “manager, executive, owner” that should have the confidence to express to upper management the excelling performance of an employee over and above measurable job performance criteria and the suggestion of bonus at that time, if the company profitable, some indication by upper management to the employee to continue such excelling job performance to encourage the same type of workmanship behavior to others and view the employee as an eventual promotable candidate to place in line for succession in a management, executive training program or mentor. If the employee is such that they continue to work in an elevated line of measurable job goals and exceed expectations of quarterly measurable goals in comparison to other top performers in the same job line in other regions. Why not bonus him or her? Sometimes it is obvious. You don’t want a valuable employee going to a competitor to express similar profitable measures to see the competitor improve in a specific area because what? Some bonus that may make all the difference to the employee for satisfaction of performing better than the great employee, while the manager, executive, owner reaps the reward of having such a fantastic person supporting them on the team.
HR thought also, many believe there is someone to replace another, not always true.
Sometimes you can’t replace the potential, you can only replace the person, yet not exact.
Comment by S. -
I am sorry, asking for a bonus? how unusual! In my experience a bonus was just that, a bonus! A pay increase should follow a performance review and match the employee/associates performance in meeting or exceeding job duties outlined and previously disgussed as well as setting new goals.
I have an employee who expected a raise just for showing up every day she was on the schedule! lol, even though she had developed a habit of being a “little late” she wanted a promotion!
As far as employees threatening to go elsewhere because they think that will get them the raise they want? let them, I will not be held hostage by a mediocre employee making demands for what they have not earned.
On the other hand,it is the easiest thing on the planet to make a fuss over the ones that do good work and take pride in what they do.(it is fun to talk them up,throw a pizza party and give them their well deserved raises!)
I do agree that the “rules” should apply to everyone involved in a company.If I do not set goals and expectations for myself , how on earth can I ask my employees to do so?
A true leader will try to lead by actions and not just words.Just take a look at how Mr.Cuban got Dallas back “into” the Mav’s!
Comment by Cheryl Smith -
I don’t think that I can agree with you here, Mark.
I don’t see why the average worker is any different from a manager/executive with respect to incentives. You outline incentive packages from the beginning with a manager so why not do the same with all your workers?
I can think of no better way to create an atmosphere of mediocrity than to not reward people for what they do well — even if that is what you expect of them. If they work their asses off and get nothing in return, then I can guarantee you that they will sooner than later leave or just begin to do the least amount possible while staying under the radar. This is especially exacerbated if upper-level management is getting payouts. No, I preach a methodology that attempts to define sub-par, average, and great — most employees at least understand the playing field then.
I do usually agree that the company needs to be profitable before you start going crazy with *financial* incentives.
Comment by Alexander Littell -
I have always went by the motto of ‘If you’re going to do it, do it well.’ It shows you have a respect for your employer and for yourself. Otherwise, if you’re just there for the paycheck, it’s disrespectful for everyone involved. Monetary bonuses are nice (well heck, they’re great) but it’s much more rewarding to know you’re doing a good job and are influencing others to do the same.
Comment by Rebeccalee Coventry -
You’re absolutely right!
Good employees are the ones that will stay late, work hard and do great things not because of the bonus, but because this is simply the way they are doing things.
A bonus, as it’s name imply, should be something unexpected. Those are the kind of bonuses that has the best impact on an employee. From my experience, this a lot of time a good bonus doesn’t even have to be an expensive one. Send flowers to his wife, telling her thanks that she accept that her husband worked late all week. Give him a weekend vacation to some resort, give him a new iPod in front of everyone else. Those kind of things can have the most dramatic impact on an employee satisfaction.
If an employee is getting used to getting a bonus after each time he does something great – hey. After a few times, he won’t look at it as a bonus. It will just be part of his paycheck.
Comment by Shahar Nechmad -
I used to work for a large computer company. An veteran manager (many years of experience) told me that in his experience, rewarding an employee with a cash bonus or small raise, had only a very short term effect on the work of the employee. Much more enduring effects came from public recognition and small surprise awards. Annual rewards meetings giving gifts (such as home electronics) to top performers, surprise gifts of “Dinner for two” checks of, say, $200, etc. It was the public recognition that had the longer effect, not the size of the award.
Comment by JWP -
clearly defined milestones can work wonders positioning a group to achieve maximum profit and enhance benefits. It can make sound sense to share ample profit with employees to build a lasting professional bond (recruiter defense).
new challenges and new opportunities are best met with people who have met milestones together.
Comment by saM FFL -
I do not think one should ever expect or demand a bonus unless it was agreed upon at the time of hiring that bonuses would be paid.
I think one should work for what was agreed upon at the time one was hired.
The rest of the money belongs to the owner and he or she may do with it whatever he or she wants. If that includes paying, bonuses then be thankful otherwise keep working and still be thankful.
Comment by Antonio Howell -
Mark,
Was this entry inspired by a current situation? Is one of the Mavs asking for something extra since they had a successful season? Either way, my views on bonuses is to treat them for what they are — something extra. In no situation should an employee request a bonus; that is solely at the owner’s discretion. Granted, when an employee does something great they might feel deserving of something extra, but asking for a bonus is downright disrespectful IMO.
Comment by Nik Papic -
Bryan,
While your statements are factual, what you are forgetting about is the fact that Mark Cuban is much more than a NBA team owner. He’s a very successful businessman. Mark keeps many other endeavors besides the NBA team most of which (if not all) i’m sure have many employees. I think this blog entry is geared towards a situation not relating to athletes. i.e. someone behind the scenes at the Mavericks organization, someone are HDNet, etc…
Comment by Ryan -
Hi Mark,
I agree with you 100%. But is there a difference between an employee and an athlete? There are a lot more smart 5″9″ M.B.A.’s in the world than say a 7′ with an outside jumper!
Agent/Athlete: Hey we just went to the Finals and I was instrumental to the success to this franchise. You can’t find another player like me. I want to re-negotiate!
You: ?????
Thanks,
bryan
Comment by Bryan -
Exactly the reason why I never ask a bonus: bonus is for things out of the usual, salary raise is when you are good and keep being good.
Comment by Guillaume -
Mark
One question, not really a comment: How should an employee approach the employer about getting a bonus? The thing is, the majority of employers dont think along the lines you have described here. They will be quite until the day the employee screams for the bonus/pay encrease, or threatens to leave the company. I had a personal experience years ago when I left the company because I felt undervalued. The day I asked for a bonus/pay increase I was denied and the day I resigned, which was shortly after, I was offered a bonus and pay increase. It would be more lucrative to stay, but I figured I was on my way out emotionaly and decided to leave.
Companies today lose valuable people because they have such big egos and dont want to levarage a better situation for the employee. I think you have a lot of experience dealing with this situation with your NBA players.
If you could go back and write about how to approach and what to do if things dont go the employee way it’d be great.
Thanks.
Comment by Marcos Santos -
Mark,
Assuming a cash flow positive company, what’s your rationale for giving a bonus then? When the employee does “something great,” does that necessarily entail going far above and beyond the job description? Developing a new technology that results in measureable economic to the company? Taking on additional responsibilities? How do *you* decide who deserves the additional compensation and regard a bonus confers?
Can you give an example of what constitutes a “bonus-able” situation?
This is assuming a cash flow positive company, of course.
Comment by adi -
I support the principle of bonus payments only for sustained excellence but with one big caveat, it must apply all the way up the chain and include top managment. What we see too often today, however, is an entirely different picture, with near obscene payouts to failed corporate CEOs collecting golden handshakes that include free use of private jets, cars, office space and a secretary for life, as if they couldn’t finance that out of their already oversized past compensation. At the same time expenses are cut at all other levels of the corporation. As long as that situation persists, don’t be surprised if anyone batting above average expects to be paid a bonus for doing exactly that, batting above average.
Comment by Joe Buhler -