The challenge is that the bonuses need to be equitable and allocated consistently.
I mention this because on a coaching call yesterday my client was telling me about a project that he’s leading where the management team has a lower target than he does.
How do you think that makes him feel? What impact does that have on his confidence and motivation?
When management has a lower shared target it communicates a lack of faith, a lack of confidence in the team’s ability to achieve the goal. I mean if they think the team can do it shouldn’t they have the same goal?
Belief is one of the most important ingredients in success, and when the team feels that the management doesn’t believe in them, then why should they believe in themselves. Even worse if the teams fail to meet the goal by a small amount Management still get the maximum bonus, yet the team won’t.
This is not equitable, this will breed distrust, discontent and probably disengagement.
This is not about management earning higher bonuses, everyone understands and accepts that. This is about management getting a bonus even if the team achieves a level where they won’t get their full bonus. The management and teams are no longer aligned with what success looks like.
Management is financially happy if the team fails, whereas for the team the same result is clearly a failure.