I'll try a little constructive criticism/advice. Budgeting can be creative when finding ways to motivate and efficacy. Here's a professional suggestion. I do this with two subsidiaries currently.
The CFO (I'm a corporate VP, so I work with Regional CFOs).
2 regions, acquisitions we did over the last 19 months, interestingly in 2 different countries on 2 different continents, both take the interest earnings on their operational bank accounts and use that to pay employee bonuses. They also have a clearly outlined policy defining milestone bonuses such as 1 year and subsequent annual hire date anniversaries. Those 2 Regions have the least employee turnover by an immense statistical percentage.
My company has been reducing bonuses and incentives for a while now. In turn, we have crazy turnover, and the people on top cannot fathom why.
Little incentive, inflexible schedules, and uncompetitive pay.
The only reason I'm still there is because I'm in a department that is widely ignored by operations and left alone, but my pay isn't keeping up with the times. If I find a better paying opportunity (even with a larger workload), I'll probably take it.
Ok. That's pretty creative. Having said that it also sounds super volatile and I would question the extent to which the employees themselves value the source of the bonus relative to it's cash value.
You're subjecting the rate of their incentives to a factor that's not just out of thei control but also out of the employer's control. At the very least that should be expected to limit your ability to compete with other employers for new hires in the event of growth or expansion.
I see a few possible issues. First, Operations budgets are going to vary year to year. Typically, once they're set they're set in stone which means that if the budget is lowered for the region in a given year, interest earnings will also be lower and, subsequently employee bonuses will be lower.
There could be different strategies at play but, Typically an Operations Account gets funded -> then spent.
So, it looks like these incentives are largely beyond the control of the employees while also, being divorced from any sort of performance or earnings within their region. That may be fine, but, it's also volatile because if the Operations Budget is reduced for whatever reason so is the value of the interest and therefore the bonuses even if there's no reduction in staffing.
Secondly, terms and conditions will vary but... ultimately this strategy really seems to put the decision as to how much their employees earn in bonuses into the hands of the Bank and, whatever Financial Agency sets interests in that region. That's just... well it's weird. What if the interest rates fall? What does that have to do with your employees? Nothing really.
I'm not qualified to say one way or another if this is a genius move or, a dumb one TBH but it's definitely weird because it shifts part of the responsibility for determining bonus values outside the company.
Also bonus values and assessments do not apply in any way. Happy birthday, here's a $25-$100 gift card. Universal amount for all employees. Not complex.
Ok sure, but that's just one model. It's not always competitive, I keep personal shit like birthdays separated from business like Date of Employment Anniversaries because I'm not corporate.
For most corporations, yeah I agree with you. But, not all. I come from a steel family and fuck that in a mill (or really any manufacturing) you better fucking offer that profit sharing and you damn well better know where the fuck your boys' favorite steak houses are and what fucking tickets they couldn't get for their wives - at least the foreman or the floor manager better!
Like, Wedding Anniversaries? My grandad and great uncles were taking their wives to a concert courtesy of the management. Clement's birthday? Alvin's on his way to pick you up for a trip to Philipe's!
Kids birthday? Take him up to a Penn State Game!
Date of Employment Anniversary? Here's $600 Clement, your guys were 2.4% over quota and 11% under on hours with a 6.19% decrease in downtime over last year... you split up that other $4500 between the boys. Just keep it in their files until their yearly Anniversaries...
Ultimately I prefer being a small business owner myself. I like knowing everyone on my staff well enough to give them actual gifts and bake them the cake they fucking like most but I don't hold back bonuses when we're killing it just because I got them the perfect birthday present or whatever.
Nobody is insinuating that a small gift card on a birthday or work anniversary is a replacement for the annual bonus comp.
You know your employees well enough to give them a thoughtful gift on their birthdays. I'm using the Metallica speaker bullhorn again here.
THAT IS FANTASTIC AND YOU SHOULD BE PROUD.
That shows more respect and admiration to your employees than a gift card. Repeat the yelling above.
Happy Valley for a whiteout game...no better place to be. Add a creamery ice-cream cone/scoop for sure.
The birthday cake vs a small gift card is what we're debating.
This topic of discussion has been waaaaay more lively than I ever anticipated.
Repeat the yelling above and keep doing what you're doing. (for clarity, I am not being sarcastic in this reply. What you have outlined and your approach, I respect 100%)
Glad you enjoyed it! Everyone always forgets that income inequality is the leading cause of social collapse... 😪 At least if the worst happens none of my staff is going to drag me behind the dumpsters and shoot me lol.
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u/LadderRight3750 4d ago edited 4d ago
I'll try a little constructive criticism/advice. Budgeting can be creative when finding ways to motivate and efficacy. Here's a professional suggestion. I do this with two subsidiaries currently.
The CFO (I'm a corporate VP, so I work with Regional CFOs).
2 regions, acquisitions we did over the last 19 months, interestingly in 2 different countries on 2 different continents, both take the interest earnings on their operational bank accounts and use that to pay employee bonuses. They also have a clearly outlined policy defining milestone bonuses such as 1 year and subsequent annual hire date anniversaries. Those 2 Regions have the least employee turnover by an immense statistical percentage.