As you might expect, in response to my Investment Advisor column in December on the benefits of revenue-based bonus plans, I've received more than a few queries from advisors about how to set up such a plan. But I've also gotten twice as many e-mails from employees asking how to get their firms to offer a bonus plan. Here's what I've been telling these employees:
First, if your firm doesn't have a bonus plan, and the owner(s) haven't mentioned one, chances are you're going to have to ask for it. But know this, in my history of watching these things go down, the chances of getting a plan at the request of employees aren't good. To give yourself the best shot at success, I suggest you start a little party. At this party (not to be confused with a union) you need to get all the employees as a group/department/team to approach the owner(s) together. That will definitely get the owner's attention, and give your request the greatest weight possible.
When you go ask for a bonus program, I discourage employees from suggesting any particular bonus plan or structure—that can make you look stupid, and often makes the advisor feel that you're stepping on her toes. Instead, the employees should go in with a proposal that together says that you all want to play a larger role in the success of the firm—by boosting revenues, or cutting expenses to increase profits, or both—and would like to share in the firm's increased and long-term success. Managers and owners like phrase like 'increased revenues,' 'increased profits' and 'long-term commitments,' but you better be able to tell them how you, as a team, can help them do that. Additionally, it's usually helpful to point out that you're not asking for a raise; only to share in the firm's future growth and efficiency.
If having a stake in the firm's success is really important to you then you really need a bonus program. With that, if your current owner doesn't agree to create a plan, you should probably think seriously about getting a new job because it means the owner doesn't know what your long-term success will be at the company, thus you are likely going…well, nowhere. (BTW, I wouldn't mention this as part of my advice in your proposal for a bonus program request; a threat to quit is usually counterproductive, for obvious reasons.) Good luck to you employees in your requests.
Oh, oh, oh…I am not done here. I almost forgot the most important thing for all you employer/advisors out there. Tattoo the following statement to your hand: If your employees come to you to request something, it is because it's really important to them. This is their last resort—so if you don't come back with some kind of bonus plan, don't be surprised if some of them leave before too long. I haven't seen any employee who first asked for a bonus plan and then didn't get one, stay for more than a year after making that request, unfortunately.
Totally off the subject but I have one last thing. I just want you to know that today I love the financial planning profession more than ever. I feel the need to tell you this because I am writing my blog in a hospital family waiting room (don't ask.) I am so thankful that I don't work in the medical profession. While I think at times the financial planning profession has serious human capital management problems, they are nothing compared to the medical profession. Don't get me wrong, I have a tremendous amount of respect for the profession—they save lives, after all.
But in recent days of observing every possible type of employee in this hospital, I have to note that if I were their consultant I would have only one piece of advice: Install a salt lick of Valium in each department.
With that kind of advice I guess it's a good thing I don't work in the medical profession, but again, please know I love you all today and good luck with your bonus programs. Thanks for listening.
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