Bonues

1. company bonuse policy

   Annotations:

   • http://contracts.onecle.com/disney/executive.bonus.shtml
   1. Provision for Bonus

      Annotations:

      • Each Participant may receive a Bonus if and                --------------------                                            only if the Performance Target(s) established by the Committee, relative to the applicable Business Criteria, are attained.  The applicable Performance Period and Performance Target(s) shall be determined by the Committee consistent with the terms of the Plan and Section 162(m).  Notwithstanding the fact that the Performance Target(s) have been attained, the Company may pay a Bonus of less than the amount determined by the formula or standard established pursuant to Section 4.2 or may pay no Bonus at all, unless the Committee otherwise expressly provides by written contract or other written commitment.
   2. Selection of Performance Target

      Annotations:

      •  The specific Performance                ----------------------------------                          Target(s) with respect to the Business Criteria must be established by the Committee in advance of the deadlines applicable under Section 162(m) and while the performance relating to the Performance Target(s) remains substantially <PAGE> uncertain within the meaning of Section 162(m).  At the time the Performance Target(s) are selected, the Committee shall provide, in terms of an objective formula or standard for each Participant, and for any person who may become a Participant after the Performance Target(s) are set, the method of computing the specific amount that will represent the maximum amount of Bonus payable to the Participant if the Performance Target(s) are attained,
   3. Selection of Participants

      Annotations:

      • For each Performance Period, the                -------------------------                                  Committee shall determine, at the time the Business Criteria and the Performance Target(s) are set, those Executives who will participate in the Plan.
   4. base salary

      Annotations:

      • "Base Salary" in respect of any Performance Period means the aggregate            -----------                                                         base annualized salary of a Participant from the Company and all affiliates of the Company at the time Participant is selected to participate for that Performance Period, exclusive of any commissions or other actual or imputed income from any Company-provided benefits or perquisites, but prior to any reductions for salary deferred pursuant to any deferred compensation plan or for contributions to a plan qualifying under Section 401(k) of the Code or contributions to a cafeteria plan under Section 125 of the Code.

Annotations:

• It's an issue in constant debate, but it is clear that conditional compensation, such as bonuses, can encourage employees to perform better. However, annual bonuses may not give employees the motivating effect you want. For example, they often focus on year-end results and not enough on the values and behaviors you want employees to display all year long. Instead of giving employees a large bonus in December, consider giving smaller payouts throughout the year, tied specifically to outcomes you value when they happen. Giving supervisors authority to decide on bonuses can be successful as well. Recognition that comes from a direct boss has shown to be far more motivating than a check from a finance department. The bonus becomes a relationship-builder rather than a transaction.

Annotations:

• Money can't buy you lovehttp://blogs.hbr.org/hmu/2010/12/how-to-navigate-bonus-season.html

Annotations:

• http://blogs.hbr.org/cs/2013/03/forget_about_that_cash_bonus.html

Annotations:

• http://www.n2growth.com/blog/leadership-motivation/

1. Forget year-end, try monthly bonuses

   Annotations:

   • Case Study #2: Forget year-end, try monthly bonuses Aubrey Daniels (one of our experts above) started a consulting firm, Aubrey Daniels International (ADI), to help companies improve performance by applying the principles of behavioral science. Many years ago, looking to improve the way that discretionary effort was rewarded, Daniels and ADI's President, Darnell Lattal, discarded the traditional model of providing year-end awards and established a system of monthly evaluation and rewards. For each staff position — from the greeter at the front door to the person in charge of their financials — they identify several metrics to evaluate performance. These metrics are directly tied to company goals, but every employee is rewarded for their individual efforts. Each person has a scorecard with their metrics on it, which they are responsible for updating each month to discuss with their manager. The company sets aside a certain percentage of profit as a pool for monthly bonuses. Every employee knows what percent of that pool they can receive if they meet their targets. "It's not guaranteed. There may be months when there is no profit to share. They know they have to work through the lean and the green," says Lattal. What Lattal likes most about this system is that "it is related to work and not gratuitous giving." It may sound like a lot to manage, but Lattal disagrees. She says people have learned to work smarter and it's actually less work for management in the end. "I feel quite liberated from the type of management where you wonder what everyone in your company is doing" she says. And since employees are responsible for updating their metrics each month, there is little for supervisors to do once the metrics are in place, other than occasionally refining them. Employees are happy with this system too. "In the past, I knew my work was somehow important but, having monthly payout opportunities ensures that I understand the effect I have on monthly results and profit now, as well as in the future," says one of ADI's marketing staff.
   1. People may just focus on work at the end of the years or until they finish the performance target
2. Do to much
   1. sometimes bonuse is too much and not for motivation
      1. Banker

         Annotations:

         • http://www.guardian.co.uk/business/2013/feb/28/bonuses-the-essential-guide
         1. bonues make banker take more risk to pursue high return

            Annotations:

            • http://www.economist.com/blogs/schumpeter/2013/03/bonuses-redux  fifth paragraph  
      2. Evidence for High bonues

         Annotations:

         • http://www.economist.com/news/finance-and-economics/21573122-regime-change-europe-tilting-playing-fieldlast second paragraph and graph http://blogs.hbr.org/cs/2013/03/im_afraid_bankers_really_do_ea.html
3. Bonuses reflect your level of responsibility in the organization and value of your work
   1. Goal setting theory
4. Reward for Innovation
5. Herzberg Theory

1. Money can't buy you love

   Annotations:

   • "Some people give bonuses because they want people to feel good about the company," says Daniels. This is rarely the effect, especially if bonuses are something people expect rather than something they earn. "A lot of people are using bonuses as deferred compensation so if they don't get it, they are disappointed," says Daniels. Plus, monetary rewards have their limits in terms of motivation. In fact, many people say they would prefer to know they are doing a good job, rather than getting more money. A manager should give rewards that are valuable and meaningful to the individual. "What's reinforcing to you is not necessarily reinforcing to the person next to you," says Daniels. Instead of relying on bonuses to create good will, get to know your people and understand what uniquely motivates them. As Daniels points out, "Money's a poor substitute for good management. The most important thing is how people are treated every day."
   • We people are emotional creatures and our subjective reflection is based on the specific moral and emotional values that we assign to the different everyday events. We are not cold rational creatures. We do not go to work just for the money
   1. two-factor theory
   2. We people are emotional creatures and our subjective reflection is based on the specific moral and emotional values
2. Be aware of the message you're sending

   Annotations:

   • Be aware of the message you're sending It's no secret: employees talk about bonus figures. News of who received how much spreads quickly. "Recent years have made it very clear that the allocation of bonuses and their size can receive a lot of attention internally, within the company, but also externally in the media," says Barankay. You may be tempted to try to get the largest benefit possible for your group, but be aware of what that says to the rest of the organization. "In some companies this will be seen as seeking recognition where it's due but in others it will be interpreted as amassing assets at the expense of the company in times of low cash flow," says Barankay.
   • Telling people they are getting extra compensation seems like it should be an easy conversation, but, that's not always the case. Whatever the amount you give, be sure you communicate to the recipient that she is valued. If the reward is generous, point to specific accomplishments and strengths that went into the bonus allocation. Impart that you expect her performance to continue to improve and provide stretch targets she can hit next year. If the employee was expecting more, be sure to emphasize the broader context of the company's approach to bonuses. Again, highlight her contributions and detail what she might do to earn a bigger bonus next year.
   1. When rewarding high performers means punishing others

      Annotations:

      • Case Study #1: When rewarding high performers means punishing others In his role as vice president of compensation and benefits at CEMEX, Gerardo Guerra knows the ins and outs of bonuses. A few years back, one of the managers he was advising faced a dilemma trying to divide up his bonus pool. Company policy was that each group would get 90% of the total target bonus for all employees. Then it was up to managers to make decisions about who got what. This manager had four employees with varying salaries and bonus targets. The highest paid of the four had made the biggest contribution that year and the manager wanted to reward him accordingly. However, because he had the highest target bonus number, to give 100% bonus to this employee, he would have to give percentages in the range of 50-75% to the others. This was not the message he wanted to send, especially since they were solid performers. He needed to figure out how to reward his star without penalizing the others. Company policy prevented him from increasing the pool. "Changing the rules of an incentive plan post-facto is frowned upon," says Gerardo. Instead he decided to give his high performer only 91.6% of his target bonus so that the others could receive 85 – 87.5%. However, when the manager sat down with the high performer, Gerardo joined them. They explained that he was receiving a higher percentage because of his impressive performance. In addition, they upped his merit increase and offered him company-sponsored training. This communication went a long way. "He understood the problem and did not want to unfairly punish his colleagues," says Gerardo. "Furthermore, he explained to us that he was very happy to be identified as the most important source of value that year and that the monetary difference in itself was not as important as the recognition itself." Gerardo points out that the company's incentive scheme has since evolved to allow further discretion when necessary.
3. Oppotunity cost
   1. Companies have to work hard to attract and retain their workforces
4. build royalty
   1. to encourage employees to think like shareholders
   2. Maslow's theory
      1. Bonuses are more than simply about money - they should be about achievement and appreciation.

         Annotations:

         • http://search.proquest.com.ezproxy1.library.usyd.edu.au/pqcentral/docview/209808840/13E552A0EE55023B19F/16?accountid=14757

1. connection between the outcomes and the behaviors is not obvious

   Annotations:

   • connection between the outcomes you truly value and the behaviors you want to see from employees can be far from obvious
   • Offcourse, just to remind that an effective incentive plan assume a fair and objective performance management system. Not all performances can be as disrecetely compared as in sales jobs and in all such jobs where relative contributions are difficult to measure and not similarly viewed by all, Managers need to be objective in defining common evaluation criteria (outcomes achieved with or without consideration to severity of difficulty) and share it with the assesses. People are often more disturbed/motivated by relative payouts than absolute value of bonus.
2. lower the base salary
   1. focus
   2. flexiable
      1. reduce budget in economic crisis
   3. fairness(ethic)
3. balance the salary, contribution,company profitablity