It is people’s abilities and behaviours that drive business success (and also failure).
Training, leadership and motivation are critical to success. For people to perform well they should understand the purpose of what they are doing and its relevance to the organisation as a whole; it is also important for them to have feedback. Something that may also encourage people to go that extra mile is a bonus. Bonuses are likely to influence behaviour, however behaviour can be good, bad or downright ugly:
One client operated a number of depots and was experiencing problems in collecting money from customers. When I looked into the reasons it became apparent that the credit controller was having problems in getting depot managers to respond to customer queries, which in turn was delaying payment. The managers received bonuses based on their depot’s profit and I suggested that this was changed to also reflect the collection of money from their customers – this together with some other improvements resulted in the equivalent of an extra two weeks’ sales in the bank.
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