
Crowdsource Your Company’s Bonuses - rguzman
http://blog.idonethis.com/post/24062277595/crowdsource-your-companys-bonuses
======
calinet6
Here's an idea: remove all politics from the process completely and do away
with performance-oriented bonus systems.

They've taken what was essentially a way to make their work into a game and...
made it into a game.

Making work into a game is an idiotic idea. Make work into work. Pay people a
fair salary that gets their minds off of their salary. Align the goals of the
employee with the goals of the company, not their own selfish instincts to
game whatever system you put in place to try to "reward" them. Make the
success of the company be their reward, whether that be with equity or simple
fair across-the-board raises.

I worked for a company a few years ago that used to be full of politics and
internal conflict. One year they did extremely well and decided to simplify
and give everyone a straight $10,000 bonus, from the janitor to the CEO. There
was no way to game this: everyone knew how much everyone got. Everyone was
proud of the company and each other. Instead of secretly discussing how much
bonus other people got behind their back, everyone was excited and happy and
asking each other "so what are you going to do with your 10 G's?" It was the
best day at that company.

You can argue against this all you want, but I experienced a level of
alignment there that was unparalleled. The people who get off on doing all
they can to advance their own paycheck and get a bigger bonus only ended up
hurting the company through their politics and game-playing. They were
invariably working in a self-centered direction tangent to the company's
goals. When that was removed, the dynamic changed completely and it was
remarkable how much improvement the company saw not just in the workplace but
across the board. New products were released that year that were better than
the last, quality improved, efficiency improved.

These fears that in order to achieve high performance, we must reward the high
performers with carrots and hit the slackers with sticks are a bastardized
religious fiction.

<http://en.wikipedia.org/wiki/W._Edwards_Deming>

~~~
bloblaw
> One year they did extremely well and decided to simplify and give everyone a
> straight $10,000 bonus, from the janitor to the CEO

So the guy that watches YouTube videos for 3 hours, and the guy that takes 2
hours worth of smoke breaks a day got the same as the gal that works 50 hours
a week and fixes the majority of the product issues?

Contributions are not equal so please don't treat them that way or you will
only disenfranchise your _BEST_ employees.

And remember, your best employees are the ones that have the most options
elsewhere....

~~~
calinet6
I expected this response, thanks for taking the time to write it.

The problem is one of statistics. Your employees will always, no matter how
hard you try, fit on a bell curve.

Here's the hilarious way most people think about this bell curve (just imagine
this defines the set of employees actually working at a company, not just new
hires; because it does): <http://www.intellectcorp.com/images/bell-curve-
hiring.jpg>

Say you have 100 employees. There will always be 4-5 who will be
exceptional—the upper quintile. There will always be 4-5 who are at the
bottom—the lower quintile. The problem is, this will always be true. If you
fire the bottom 5, then there will be a new "bottom 5". People will always be
worried about their job, the pressure of not being fired will be a negative-
feedback motivator (or that's the idea), and the top people at the company
will continue to be rewarded.

Two questions:

1\. Do you truly think that the top employees are working harder because you
reward them? How much harder?

2\. What about the other 90 employees?

Your top employees aren't what you should be worried about. Firstly, if you
depend on them and (as you say they have the most options elsewhere) heaven
forbid they leave, where does that leave you? Fucked, that's where. Second,
even if you think the top employees are doing the work of 2 people each, or
even 3 people (which is a lot to expect of anyone), 80-90% of your work output
is _still_ being done by the thickest part of that bell curve.

What's the answer?

Improve the system. Making systematic, broad improvements will help everyone
do better work. This is the true reason the straight 10k bonus worked so well:
it was a systematic reward. But other things work even better: provide free
lunch and your employees won't leave the office as much. Provide free dinner
and they'll stay late. Bam, systematic across-the-board improvement in working
hours and efficiency that no bonus would ever come close to. Allow frequent
employee skill-improvement days, make them focus on honing their skill sets
for 1 day a month without the stress of real work. Bam, everyone gets better,
not just the top 5%. There are countless others.

Figure out how to make the 90% in the middle work the hardest—and trust me,
it's not by promising them bonuses if they can make it into the top 5%. That
might be motivating for the upper 10% or _maybe_ 15%, but not the rest.
Improvements to the system they're in are the only good answer. The antiquated
structure of bonuses and rewards and the punishment of firing is a religious
myth left over from protestant and catholic beliefs in punishment and shame.
They're not based on behavior, they're not based on science, and they're
simply not true.

Are monetary rewards entirely bad? No, of course not, people should be
rewarded for doing good work. I personally think that this reward should be in
the form of simple, understandable fair compensation, with as few barriers to
that as possible. Other reward systems may work too. But they should not be
the focus—the focus should be on improving the system your employees work in,
as it will result in gains an order above what's possible with carrot and
stick.

Again, please read <http://en.wikipedia.org/wiki/W._Edwards_Deming>

~~~
temphn
> even if you think the top employees are doing the work of 2 people each, or
> even 3 people (which is a lot to expect of anyone)

Claim: in software or engineering, your top employees are doing the work of a
thousand people, or an infinite ratio of some of their fellow employees. No
combination of administrative assistants at Google is going to program Google
Chrome or even a sorting algorithm. No combination of HR people is capable of
calculating structural loads.

Claim: (more arguable on Hacker News). Successfully managing a medium or large
organization is likewise a skill shared by very few people. Managing humans is
like programming on the most testy and finicky AWS nodes you could ever
imagine. They don't do what they're told, they do other things, and they may
return wrong results. You are responsible for making sure the group performs
as a whole. This is engineering of a different sort.

There is a fundamental impedance mismatch between the amount of dollars
required to sustain life (outside of serious health issues, this does not
greatly vary from person to person) and the dollar productivity of each
individual.

Arguably every great tech organization (commercial or non-commercial) has a
few people who are 1000, 10000, or 1 million times as productive as others.
People like Linus Torvalds, Richard Stallman, Jeff Dean, Urs Holzle, Guido van
Rossum, or DHH. That is how they became great tech or engineering
organizations.

The Bell Curve may describe the population distribution of intelligence
(though ability on any given trait may be different). But as a manager or
recruiter your duty is to select highly nonuniformly from the right tail of
that curve. Your ability distribution should be as radically right skewed as
possible, and should not really resemble a bell curve.

In short, "equal bonuses for all" -- with the same amount going to both the
guy who didn't do much work and the guy who picked up after him -- is a great
way to demotivate your best people. And this will cost you a lot more than 2-3
of your medium employees, it will cost you a guy who did 1000X their work, and
perhaps it will cost your whole business. All that matters are your best, with
them you can rebuild anything.

~~~
calinet6
"All that matters are your best"

I agree with some of your ideas, but in my humble opinion, this attitude will
cost you your business faster than anything.

------
bloblaw
On the face of it this sounds like a good idea, but I see some problems. For
example, this presumes that others can understand the value of my
contributions.

If I can accomplish something in 2 hours that takes someone else 16 hours....I
could very likely go unnoticed. But if I bring donuts for everyone every
Friday I bet I get a bigger bonus because people really like me.

My concern is this exchanges reward for actions highly visible to your boss,
to reward for actions highly visible to your peers. A combination of the two
would be preferable to me

Actually, this already exists in many companies and it's known as "360
feedback" where your co-workers (in and out of your dept) are asked their
opinion of your performance before your review. This feedback is factored in
to your review.

<http://en.wikipedia.org/wiki/360-degree_feedback>

~~~
z2600
Shopify employee here - Unicorn makes accomplishments highly visible to both
your boss and colleagues. The bonus is that if you do something for a
colleague, your boss will find out via Unicorn rather than you having to say
anything.

~~~
bloblaw
My point is that "Unicorn" is a reporting tool. It still takes peers (instead
of just your manager, aka the "old way) to understand and accurately value
your contribution.

My concern is that not all actions are equal, but the recognition seems to be.

My question is do I get more "points" for fixing the thread dispatcher in the
kernel...or do I get just as many for helping you understand how to upload a
file to Sharepoint?

That's where you can disenfranchise people. However, I like the idea and to me
it is a good step in implementing 360 feedback as part of a review and bonus
allocation.

IMHO, combine peer feedback as an equal component of bonus allocation along
with management assessment and I think then you have a winner.

~~~
dstorrs
You get more for fixing the thread dispatcher:

"Everyone in the company sees [your] plaudits and can pile on more unicorns if
they agree that [you] did an awesome job."

The only person who will be impressed by you helping Bob upload to SharePoint
is Bob. Total score: 1-3 unicorns.

Every engineer will be impressed that you fixed the thread dispatcher. Total
score: 1-3 unicorns * # of engineers.

~~~
emelski
Sounds great in theory, but that assumes that every engineer is spending time
every day monitoring all of the accomplishments by every other engineer just
to make sure everything gets valued appropriately. I suppose the answer to
that is, "Well, you (or somebody) could tell everybody that you did this
wonderful thing," but then you're right back in the position of having to do
self-promotion to get recognition for your work.

~~~
blairbits
Shopify intern here.

I've worked Unicorn in to my daily workflow. I can't say everyone (or even
anyone) else uses my system, but Unicorn is my first stop of the day when I
sit down at my desk. I look over all the unicorns from the previous day,
distribute points as I see fit, and move on with my day. Rinse and repeat
daily.

It takes all of ~2-3 minutes out of my day. I can see how this technique
wouldn't scale well once employee numbers get too big, but it seems to work
well at ~100 employees.

------
benjaminwootton
I haven't met anyone with a nice word to say about performance reviews.

If you are performing well and delivering results, to then have this annual
review process which gives you a big list of all of the extraneous areas that
you 'need to improve on' can be a complete sap on the old motivation.

Especially if it's accompanied by the typical 1-2% pay increment. That can
really be a drag....

I've quoted this article on the topic a number of times, but it's spot on IMO
-
[http://headrush.typepad.com/creating_passionate_users/2006/0...](http://headrush.typepad.com/creating_passionate_users/2006/02/mediocrity_by_a.html)

If you're going to do them, performance reviews should be about identifying
the areas where people are great, and working out how to extract more of
that....

~~~
crewtide
Yeah, the biggest issue with management in general (and performance reviews in
particular) is that it's focused on what people are doing poorly at/where they
need improvement.

Good managers find out what each employee is awesome at and get them doing it.
If you hire someone and what they love to do and are great at isn't what you
need at your company, then you've hired the wrong person. But I know lots of
people who left a job because they kept asking to be moved to a different
role, different team, etc, and nothing happened.

Managers: focus on what each person is great at and loves to do.

~~~
ironchef
It's a pendulum. If management blows smoke and kissy faces all day at me
telling me my poo doesn't stink, that's not helpful. If they only point out
what is being done incorrectly, that's not good. A blend between the two plus
upward reviews (my opinion) have been best when i've seen them in use.

Unfortunately, most companies and people don't design and execute performance
reviews well.

------
tomjen3
That is going to work well when the employees starts to gang up together and
give each other unicorns in return for their unicorns.

~~~
edwardog
I wrote the first version of this at Shopify.

We anticipated the need to see this kind of behaviour, so there's clear
auditing trails for everything that HR and Accounting can see where the bonus
money's going.

Having said that, we haven't seen this problem appear yet.

------
agentultra
I hate bonuses. I'd rather get equity or a bigger salary. I'm shy and I don't
like pandering for attention. I just like getting things done, finding ways to
make it easier to get things done, and shipping code so I can go enjoy a beer.
I could really care less for bureaucracy and competition. It's inefficient.

------
ashliana
Initial issue/concern I see is that it would seem people who have more
internally-interactive/colleague-facing job roles would unfairly receive more
unicorns/more $$. So workers who are pretty independent or mostly external-
facing would be less likely to receive equitable bonus/appreciation for a job
well done. Of course the client-facing positions can more easily have another
metric for determining bonuses, though I think many times those metrics are
pretty flawed.

Anyway. I like the idea of crowdsourcing a bonus, but think it needs to have a
lot more nuance in it than it appears exists in Shopify's approach in order to
actually be a fair and robust tool for bonus determination. Love the unicorn
touch, though!

------
gawker
This sounds similar to what Rypple is doing: <http://rypple.com/>

From the comments, it seems like no one has tried to game the system but I'm
wondering if in a large corporation, anyone would try to game it?

------
codeonfire
My approach has been to just to ignore reviews, compensation, and bonuses
altogether. People are simply not capable of getting this right. Everyone
knows how dishonest people can be, especially in the workplace. To have any
sort of review system requires and assumption of honest reviewers, which isn't
even close to reality.

The job market will sort things out in most cases over the long term.

------
eof
I don't remember the exact details, but I have been a long time happy customer
of hotdrupal.net

The owner Steve made something like a request for bonuses for his employees
and any extra money sent went straight to the employees.

I thought it was a nice gesture. Not exactly what the article is talking
about, but it does seem to literally be crowdsourcing bonuses.

------
_pferreir_
I think a hybrid performance reviewing system would be the best: supervisors,
supervised and peers. It is frustrating that managers do not get evaluated for
their management capabilities - why not let those who they manage have a
saying? They, better than anyone else, know how good of a leader this person
is.

~~~
edwardog
Shopify employee/original author of unicorn here.

This bonus/props thing is really just for fun and recognition more than
anything else. Performance reviews and salary adjustments have their own
separate process.

------
zeroonetwothree
There is also this older hacker news item that's relevant:
<http://news.ycombinator.com/item?id=620546>

------
zavulon
There's also DueProps, who turn this into a game: <https://dueprops.com/>

~~~
jturn
<http://angel.co/dueprops>

Looks like this is the tool that shopify uses. See the comment from the CEO.

~~~
xal
DueProps is loosely modelled on Unicorn

------
systematical
article snippet: "logs into unicorn"

me: _vomit and close browser_

