Learnings of a Company That Let Its Employees Dole Out the Bonuses

Earlier this year we floated an idea to allow your employees to dole out your bonuses – see January 2010 Food for Thought. One company, Preferred Medical Marketing Corporation (PMMC) in Charlotte, NC, implemented that idea. This month’s topic is a discussion of their learnings. Credit and thanks go to Roger Shaul, CEO of PMMC.

Roger, wanting to share some of the profits of 2009 with his employees in early 2010, divided the available pool of money in the ratio of his employees’ base salaries, and invited the employees to give away that amount to one or more deserving co-workers.

The recommendations by the employees were to be submitted to Roger, explaining their choices.

By and large, the employees took the task seriously. Barring a couple of recommendations that peanut buttered their awards to all employees, most employees took the time to understand and recognize specific contributions of a select number of co-workers. Roger received some very appreciative thanks that came both from people at the top and at the lower end, in terms of awards. He did not receive any errant recommendations that caused him to exercise his veto. All of this goes to show: when you place responsibilities on your employees they take them seriously and discharge them in earnest.

Who got recognized? Did the deserving get rewarded?

Roger found it understandable that some employees, the nature of whose jobs is to serve other employees, received a disproportionate amount of recognition and award. On the other hand, he was pleasantly surprised that certain lower level employees that management does not notice as much got an unexpected amount of recognition and award from their peers. Roger comments, “they were noted for their diligence and they happen to have been very helpful to many outside their immediate department – real team players that care and are now obviously worthy of more appreciation and cultivation for advancement.”

Another learning that Roger points out is that it is not just who received numerous awards that tell a story, but also who did not. Roger believes that there was some scuttlebutt in how the names were announced, and complaints that this is management’s job, but it died down very fast. Roger’s experience seems to have been mostly positive.

Would Roger do this again?

“The answer is a bit complex,” Roger notes. “The awards were given because the company did not make salary adjustments during the previous year; the company did better than expected during the recession and it seemed appropriate because of management’s commitment to offer rewards if we did well. Bottom line, if the company does better than expected next year, yes, and we should. What would we do different? I believe it may be prudent to leave management off the list of recipients but perhaps still on the list of those who grant the awards.”

Food for Thought is our way of sharing interesting concepts on corporate leadership and management with others who might find it useful. The thoughts offered are intended to be controversial and thought provoking. They are intended to help our readers intentionally realize their potential, what we call Potentionality.