Why Paying Fixed Bonuses is Hurting Your Business - Part II
Hi again! If you missed it, in this post I outlined why bonus payments are terrible for everyone involved. Also, I promised to deliver a better alternative. Here it goes.
What we want from a new incentive system
Last time around we assessed all of the horrible pitfalls to avoid. Now, let’s take a closer look at the things we actually want our new system to do.
Motivate without cracking the whip
A wise German philosopher once said he doesn’t believe that “the fear of losing is better suited to make you a winner than the desire to win.” We agree, that’s why our new system doesn’t have an inherent threat of punishment.
Make the benefits last
We’re not aiming to reduce the investment of a bonus payment, but to use it more wisely. One of the main goals is to have our employees enjoy their prize all year around.
Reward long term input with long term benefits
We’re a startup, and we want to grow. If you’re doing a great job here, you’re not just boosting this year’s revenue as you would if you worked at a car-dealer, you are helping us grow in a permanent and substantial way that will continue profiting the company into the future. That’s why your input should be rewarded in a permanent way as well.
Keep people happy, and keep them here
If we do spend extra funds on employees, as a company we don’t want them to be just burned. We want this investment to add to the list of reasons why people love working here and want to stay.
What we came up with
We call it the Gamified Perk System. On your first day of working with Blinkist, you start at Level one with zero points. For every following day, it rewards you with one Point. Collect enough points, and you’ll quickly level up. By doing so, you unlock meaningful perks that you enjoy having all year around like a company bike, company phone, public transport ticket, tax advisor, bonus holidays and salary bumps. All of these are independent from your individual contract negotiations — you can still have those whenever you feel like they are due.
The longer you’ve been with us, the more of these perks you stack up and the more you’d potentially have to give up if you considered leaving Blinkist. You feel these benefits all year around whenever you count your holidays, hop on your bike or get on a bus.
Sina, that’s not an incentive model. It doesn’t incentivise meto work harder!
You’re right. It’s not an incentive model. It’s a gratification model to show our appreciation for our employees’ work. My personal mission is not to make people here work harder — it’s to make them happy.
We as a company believe that enjoying your job makes you more engaged and thereby more creative, more empowered, and more effective.
You lied to me, you promised a better incentive model!
I did, I’m sorry about that. Let me explain: ultimately, I just don’t believe in incentive models. Every incentive model can, even in a best case scenario, only succeed in creating external motivation. I had the chance to replace the incentive model with an appreciation model because in a long and still ongoing transformative process we succeeded in creating an environment that fosters internal motivation. We went from an almost corporate situation with all the typical problems to a place where people love to work and give their best every day. How did we do that? I’ll tell you all about it in my next article. Follow Blinkist Fieldnotes or shoot me a message at sina@blinkist.com to get a notification when it’s up.
