If you get caught speeding, you get a ticket.
In sports, if you commit a foul, you get penalized.
So, doesn’t it make perfect sense that if an employee breaks enough rules, he or she can be “disqualified” from team bonus?
The answer is YES, NO and it DEPENDS.
Strategies has been teaching the in’s and out’s of Team Bonus for over 24 years because it’s an integral element of our Team-Based Pay (TBP) business model.
NOTE: Team Bonus is not exclusive to TBP. It can add a “teamwork” incentive to any pay program.
The purpose of Team Bonus: In it’s simplest form; Team Bonus is recognition for achieving or surpassing the salon/spa’s monthly revenue goals. It’s a team goal where everyone plays to win.
- The bonus pool is typically funded by a percentage of net profit or a predetermined budgeted sum.
- Team bonus is acknowledgement for the efforts and performance of your entire team — service providers, front desk/guest service, assistants, etc.
- Team bonus is about appreciation. It’s a “thank you” from your company.
- Team wins trigger team bonus.
- Teams help those that fall behind.
- Teams fight for what they believe in.
Team Bonus distribution: The simplest and fairest distribution of Team Bonus in a salon/spa is by hours worked. Full-time employees receive a full share and part-time employees receive a half share.
- Dividing Team Bonus by seniority or by individual contribution to total revenue is NOT team based. An individual’s pay and pay rate already reflects seniority and individual performance.
Now, about those “Disqualifiers”
It’s fine to have basic Team Bonus rules, but never contaminate Team Bonus with consequences. People don’t willingly deliver their best efforts to avoid consequences.
- Disqualifiers are consequences
The primary intent of Team Bonus is to channel your team’s collective efforts to drive service and retail revenue to achieve and surpass the salon/spa’s goal for that month.
The secondary intent of Team Bonus is to acknowledge and reward each and every team member with a fair share of the bonus pool.
Disqualifiers distract and divert energy from the goal:
- Radar traps: Disqualifiers are radar traps just waiting to catch an employee violating a rule, procedure or standard. When owners and managers become the “disqualifier police” looking to catch employees doing wrong, it’s hard to create a goal oriented team culture.
- “Three strikes” — you’re demotivated: An employee is late and gets a strike. Late again and gets another strike. Not in dress code and strikes out of the bonus pool. It’s the fifth day of the month and this employee could care less about hitting goal. Your “GO TEAM” energy just got up and left.
- Yay! More for us: The more employees that strike out, the bigger the bonus shares for those still in the game. When a team has winners and losers, it’s not a team. It’s internal competition that wrecks teamwork.
- The elusive bonus that never happens: If your company hasn’t hit goal in months, disqualifiers are pointless. It sounds like, “Okay, three strikes and you’re out of the bonus pool that rarely, if ever, happens.”
The BIG issue with Disqualifiers:
Leadership is about engagement. It’s about coaching employees to achieve their full potential.
When leaders rely on behavioral and performance disqualifiers from Team Bonus, they are essentially abdicating as leader. For many entrepreneurial owners, it’s easier to “disqualify” than engage with an employee in one-on-one conversations and coaching.
Creating a dynamic team-based culture capable of achieving goal via high productivity, efficiency and teamwork is the work of leadership.
Here’s my challenge to you: Put aside the consequences and disqualifiers that do more to demoralize than create the energy to achieve goal and trigger a Team Bonus.
This doesn’t mean that reprimands for violating rules or unacceptable behavior are forbidden. It simply means avoiding the use of disqualifiers in conjunction with Team Bonus.
As leader, you will do more to improve the overall performance of your team with one-on-one coaching to address performance and behavior issues than using disqualifiers.
Lastly, disqualifiers will do nothing to address an employee that is chronically late for work, has an absenteeism problem, routinely violates dress code and can’t recommend products or pre-book.
Non-performers and problem employees could care less about Team Bonus — or being disqualified from it.