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Unfair Incentive Pay

By larrywpace ·
My company I work for (financial institution) has just rolled out an incentive based pay scale for the VP's and Managers of the different branches. Basically, if the loans grow, deposits grow, expenses go down and etc. etc. etc. they get the chance of an additional $500. added to their monthly paycheck on the next 15th of the month after the month end. The CEO told me this week that the IT department basically gets a $300.00 a month budget to buy any toy, software, or device that they want, based on reports being delivered on time, and up time. I find this extremely unfair, Everyone else gets cash and me and my department get a shared $300 pot. I'm wondering how other IT departments get incentive or bonus pay. After all, We support everyone at all offices/branches and keep their systems online and internet up and they get cash and we get nothing. I'm working on a better plan for the CEO/CFO to tell them that we want a slice of the pie also. What is your plan for incentive for IT people? What are the measureable ways that your able to incent your back office people. is it uptime, time to resolve issues, expenses, project work? Thanks for input.

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unfair to say the least!!

by secure_lockdown In reply to Unfair Incentive Pay

i get an incentive of "0". that is zero as in "0".

i have never heard of IT guys getting an incentive to deliver reports on time. I think you got a good thing. why don't you guys alternate each month a different guy get to spend the $300 on a toy.

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No doubt

by Oz_Media In reply to unfair to say the least!!

Someone complaining that they are only allowed $300.00 IT play money!

You are getting $300.00 more play money than anyone I've ever met in IT.

I am a sales rep and IT tech, I have never made as much money in IT as I can or sometimes do in sales, it just doesn't work that way. As a kid I learned that sals reps make the money and get the perks, administrators, receptionists, HR etc. don't. Thus you find a sales career if you want that money, just be prepared to put up with FAR more crap and pressure than you have ever seen in IT.

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Welcome to reality

by Oz_Media In reply to Unfair Incentive Pay

ANy sales force you support will always make more than you, get all the little client handouts and bonuses etc. You get squat, you don't need incentive you are hired to do a job at a salary, end of story.

If a salesteam earns avg. $1400.00/month commission each, and then the manager gets $2800.00 basd on thier perfonrmance, IT gets squat, even though you feel they can't do their job without you. Bottom line is that they can do it without you, the employer wants to make staff more efficient so he provides them with computers and IT support to make himself more profitable, not them.

Get over it, IT does not get sales perks or incentives, never has and never will.

Management and others directly responsible for sales success or company savings, get the perks, not you.


You also closed with a valid question. How do you prove you have increased profitability and efficiency? You can't unless you keep track of sales, sales performance and then go and query all customers as to what influenced their decision; The reps efficiency, the website, etc.

It's not measurable, especially to the boss, and therefore cannot be rewarded the same, never has and never will.

This is employment 101, pick the job that enthuses you most, If you want cash bonuses, added incentives like trips, dinners, golf etc. get into sales, you want a steady payckeck without the burden of monthly quota, a sales manager breathing down your neck etc. Join IT.

The choice is yours, what your are wanting is just not logical nor supported by any company I've ever seen.

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Very good point...

by larrywpace In reply to Welcome to reality

Your are so right, and I never even thought about it, If I wanted the pressure of sales quotas and hours of agonizing reports then I should become a branch manager. Besides, I work in IT and I get a screaming fast laptop, unlimited cell phone minutes, high speed internet at home, all the work software somehow ends up on my home pc, and the neverending fun of hundreds and hundreds of emails a day. I guess I really could not see the forest because of the trees.

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There you have it

by Oz_Media In reply to Very good point...

YOU get perks the others don't. I worked an IT job where my ONLY perk, and prearranged in my contract, was that ANY time a new computer was need ANYWHERE, I did a shuffle. Meaning I got a brand new top-of the line workstation (usually with the latest Graphics card to play the newest games on, wheter needed for my work or not) and would pass mine down to the next manager in line, his would be passed down to a sales rep and so on, depending on the imprtance of the positions need of a computer.

People always came to my office and said my games looked better so I had the advantage (we'd have large network games of Ghost Recon etc., in which I would obliterate them with ease due to a better PC).

So while I was pissed that they got so much extra dough,I still made a higher salary than the top reps base salary (he netted well over 150K/yr with commissions though) and I got the best equipment.

The boss made MY job easier by providing me with MONDO workstations, the others got cash bonuses based on performance. This was MY perk for making their lives easier. Also getting in good with the slaes reps will see some perks coming your way from them. I used to get all the gas and golf cupons and stuff from the reps where I worked because they would get them on manufacturer incentives and pass them to me as a thanks for helping them with home PC issues etc.

It's just perspective, taking a step back and really doing an inventory of who gets what and why.

One thing you have on your side, you are employed, there are MANY very skilled IT staff out there who can't find the most basic IT job.

Chin up, it doesn't sound that bad, in fact if you ever don't know what to do with the extra $300.00 toy money, let me know! :)

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zippo

by GSG In reply to Very good point...

In healthcare, there isn't such an animal. Having said that, I must admit that the past 2 years our department has received an incentive because of the work we've put in to get technology awards for the hospital. Our incentive has been an extra 8 hours of Paid Time Off to use however we wanted to use it.

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Meaningless Bonus = Failing Company

by Tony Hopkinson In reply to Unfair Incentive Pay

Because of my experience with bonuses I have an intense suspicion of them and management motives in paying them.
So take this with a pinch of salt, but I've seen it, done it and felt it.

Management see bonus as a cost, and a huge one (it adds up over a year for every employee)
What do management do with costs ?

The employee sees it either as a large percentage of his salary that his individual performance has no bearing on and that management can manipulate at will , or an amount so pathetic he just can't be bothered to do anything for it.

In the former case he will end up working harder just to make up his salary (remember management reduce costs), strangely enough employees resent this sort of thing, in the latter it's completely counter productive, performance will go down.

I used to be in manufacturing, and bonus was based on production targets, which I did have a direct impact on, because if the computers stopped so did the process. I did get money, almost 15% of my salary was bonus. However before you get jealous, my salary was very very low, the bonus simply made it up to market. However if there were production losses for anything everybody took a hit. Performance related pay in a nutshell.

The trend you have to watch out for is more and more of your take home becoming bonus related.

It has always been my experience that management want to pay you less when you underperform not more when you exceed expectations, they generally consider that an unwanted side effect.

It soon occurs to management that they can reduce costs by manipulating the bonus or the factors that give rise to it.

How about a mandatory reboot test so your up time is never 100%. ?

Counter-productive
1) Trigger points. For instance lets say you get amount x for every % of up time over 80%. On Monday, total disaster, hdd failure, can't make your bonus, rest of the week , no one gives one.
2) Low money. Asking an employee to work his butt off for one cent an hour. Explanation unneeded.

Divisive
1) Come up with a scheme where employee A gets more than employee B, because they 'performed' better. Employee B will not agree. Finger pointing, low morale, the lot.

2) Everybody gets an equal share of the bonus. Employee A believes they contributed more than lazy incompetent employee B. Employee A not happy low morale, bad attitude, the lot.

I was once on a profit bonus . This was not too bad an idea, in that the performance indicator was less likely to be manipulated (well in the UK), the goal is so remote from the guy on the shop floor that divisiveness nevers sets in, it was payed annually, most just before Xmas, the remainder after the last months calculations were finalized in January and was about 13% of my salary. Very nice, so nice in fact management cancelled it and replaced it with something that did not reduce their final profit. Watching what they thought they had made drop by 300k set their teeth on edge.

Unless you get a radical re-think including a re-assessment of how the other benificiaries get bonused, you are going to watch departmental performance go down.

Even more salt.

The scheme you've outlined with it's enormous disparity in both value and conditions I hesitate to call moronic, because I've met morons who've come up with better ideas. The company would have been better off leaving you out of it completely, now they are euchered because they will be taking something away from you even if it was totally crap.

If I was you I'd buy training software for the most marketable skills you can find and any other job finding aids, then try and leave the company en-masse, because you are working for halfwits who shouldn't be allowed to to run a toy shop, and I don't mean a shop that sells toys.

P.S. If any of your bosses is known to clean his gun collection with obsessive regularity please paraphrase on presenting this.

P.P.S
I have been there and got the tee-shirt. It was a cheap white thing with the company logo on it. Shrunk and went out of shape the first time I cleaned the car with it.

Do yourself a favour get right out of there.

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A less morrbid view

by Oz_Media In reply to Meaningless Bonus = Faili ...

What you have said I will somewhat agree with in the case of manufacturing.

Not in sales though.

Almost every sales organization in Canada and I suppose the US too does this as the norm.

I have managed more sales people than I could possibly remember, I have been in more sales roles than I could possibly list. Bottom line, they are ALL exactly the same. Incentives for sales and management staff are as common as bathrooms with toilet seats, and certainly nothing to raise any fears over as far as company stabliity. I would be worried if the sales staff had salary removed and were placed on minimum wage or commission, which ever is higher.

In this case, it is as normal as putting on your pants in the morning, especially in the industry mentioned.

Different TYPES of sales require different classes of sales people, SOME, usually newer or younger teams, are motivated by low salary and high commission possibilities and added incentives, I have played the envelope game with $50's all day too.

Then again, for older more experienced staff, the base is usually higher with less commission, and added incentives when they start to make noise about earning a tonne of cash for the company and getting paid bugger all.

Older reps generally have families, mortgages etc. They need a higher salary or else they get hungry and lose deals. Just as dogs smell fear, customers smell insecurity and hunger trying deperately to close a deal (another reason to always have a $50.00 in your pocket when you are selling something, a mental reinforcement if you will).

When reps/managers get high salaries, they ALWAYS get less commission. In fact the more they sell the more salary and less commission they earn, otherwise they'd make infinite amounts of money o commission, this is why new sales reps get minimum wage or commission, as soon as they are successful, much commission is removed and salary isput in place, not because of the 'proven ability' issue that it is supposed to represent. Any time, I have proven my sales ability, I would much rather be left on commission than stuck n salary nd makin gless money than I could be. THey also promote sales reps to managers for this sames reason, they simply sell too much after a while.


It is VERY common for these people, again especially management, to get production bonuses and profit shares to fill in the gap. When staff are over producing, it is cheaper to give them some incetive dough than pay higher commissions.

This sounds like the most common and straight forward system and not unlike most others.

It can indicate a VERY successful sales team, or can be an effort to move invoicing and deals through the channels faster to create faster deal turnover.

Many salesmen will do half assed paper work due to sales being more of an importance for paying the bills. This means that operations are slowed and revenue is held back for quota padding etc. The incentives, as described in this case, are in place to keep paperwork and deals flowing and being followed up, instead of just prospecting all day or padding weak times of year.

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Sales no problem

by Tony Hopkinson In reply to A less morrbid view

Well did say add salt, maybe some cayenne wouldn't be amiss either.

I'll take your word on sales, I've learnt how to sell myself thru failing to, but would n't know where to start with anything else.

Bonuses can work, if they come to a reasonable percentage of your earnings and they are seen as fair.

If the guy's company wants to perform better, how does the bonus scheme as outlined help them do it. Maybe I need to go to business school, because it's not making a gramme of sense to me.

I wouldn't drive my chair faster from one station to another so the department could have a better nobo board. 300$ a month I'll fit a 1200cc engine to it.

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That would be cool

by Oz_Media In reply to Sales no problem

In this case what haoened is bonuses were going out to sales and the management responible for them. As IT success is not traceable, they have offered them something to soothe the pain of watching others gain.

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