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Some Companies Are Actually Letting Co-Workers Determine Employee Bonuses

Co-Workers Selecting Bonuses

The company bonus might be a novel way to motivate employees and reward good work throughout the year, but it’s sometimes hard to gauge at bigger companies.

That may be why some firms are trying a novel way to award bonuses.

Some companies are trying a new method of making performance bonuses more efficient and productive by letting their employees determine who deserves to earn them, according to The Wall Street Journal.

For instance, Coffee & Power in San Francisco, started offering staff stock in the company by giving each employee stock options to be distributed to co-workers.

They were each given two days to decide how to divide the stocks amongst themselves. Once the window  closed, the company reports each individual result to their employees, in addition to a distribution curve to prevent a small number of employees from receiving an unfair amount of the bonuses. The reviews are also done anonymously between employees.

Proponents of the idea believe this method of performance-based bonuses makes sure that employees who have actually done the hard work and made great strides for the company are rewarded accordingly. It also ensures that the right people are rewarded since co-workers often know each others’ level of contribution and effort better than their supervisors.

Opponents, however, argue that the idea could create a hostile work environment by creating tension between co-workers who don’t get bonuses they they believe they earned. Some also believe the method could make for competitive power struggles that turn into “popularity contests.”

[The Wall Street Journal]

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