What are the Pro and Cons of Creating a Bonus System?
Christine Allen is at the University of Louisville, responsible for development and alumni affairs. She asks a question significant to all in the field.
Christine asks: “I’m exploring the pros and cons of creating a bonus structure for the development staff. Have you seen a model that is one you embrace? If not, what in your opinion would the ideal bonus plan look like?”
We asked John H. Kuhnle to respond. He is Managing Director of Korn/Ferry International— one of the largest Executive Placement firms in the country.
“The most successful plans I’ve seen are based on the success and goals achieved of three components. These are: personal goals, team goals, and institutional goals. “In each case, the goals are not all or nothing. They can be achieved (and rewarded) incrementally.” Additionally, each team member may have a different percentage of salary as the maximum bonus. Often the chief development officer’s maximum might be twenty five percent or more of the base. Other position goals vary depending on which dimensions of the program are being ‘incentivised.’
“The goal should be the kind that encourages in systematic and programmatic growth— rather than just bald finance goals. For example, increasing the annual fund by ten percent, increasing the annual gift by some percentage, increasing totals by some percent, increasing calls, and so forth.
“Basically, the system should encourage the kind of goals that build programs rather than enticing staff to crowd gifts into a fiscal year and suddenly knowing short-term gains at the expense of relationships that could pay bigger dividends over time.”- The Partners