The question of bonuses and objectives also arises at Smartview, at 9.

In the sphere of agile management, the question of bonuses and objectives regularly comes up. The advanced positions (or what I consider advanced) on this subject simply propose eliminating these artifacts. Naturally, as an agilist *and* partner, therefore manager within Smartview, this is a question I’ve often asked myself: should we keep bonuses and objectives or not, and why?

Personal experience

My personal experience confirms the “agile” trend: they should be eliminated. Why?

Today we are 9, which is very few but it’s already a small world.

I’m not going to say more than Dan Pink in his book Drive, just confirm his hypotheses.

I was able to observe that if we assigned bonuses linked to objectives, these blurred the sense of belonging to our company, to its vision, to its overall and longer-term objectives. Blur in the sense that long-term objectives or foundational actions were systematically discarded or minimized to respond first and foremost to the objective linked to a bonus. The latter being necessarily more “short-termist” in that it allows for the calculation: “if we have this, we get that”. This is not restricted to so-called sales profiles.

No point in increasing the bonus linked to longer-term objectives to overcome this problem. Since they are more distant, less “definable”, and especially since they require commitment, strong anticipation, these objectives are too easily discarded: too much risk, not enough visibility. People prefer the accumulation of small objectives where they have greater certainty of success.

Even if they lose out in the end. That’s the whole tragedy for a small company like ours.

If I have a salary and bonuses, I work for my bonuses.

If I have a salary and a vision, I work for my company.

But vision and objectives point in two different directions.

Again echoing Dan Pink, with objectives and variables one has the impression that the salary is completely disregarded. A gluttonous tendency that means everything should be subject to a bonus. Why would I do that, I don’t have a bonus for it?

Or worse still: I used to have a bonus for doing that, it’s out of the question that I do it now without a bonus. Especially since quite often if the variable isn’t paid at 100% it generates incomprehension. Strange when you know the meaning of the word variable.

I don’t blame anyone, and I completely understand the mechanism that takes place. We’re talking about money, therefore about standard of living, comfort, etc. It’s fundamental (let no one tell me “money isn’t important”, if that’s the case it’s because they earn too much, good for them but they shouldn’t come and pollute our debates). So survival reasoning: my comfort, my stability (my salary) takes precedence over the collective feeling of belonging to the company. If I do this I would be doing the company a service but I would lose personal comfort. Once, exceptionally twice, but often it’s intolerable. I can only understand it. (Unless it’s win/win you tell me: what benefits the company benefits me. You’re talking about profit-sharing, equity participation, etc. Yes, that seems more constructive. I haven’t been able to implement them yet to also observe potential side effects. I remain skeptical about profit-sharing: it seems to me contrary to the notion of equality: with two very different commitments you get the same result. It’s odd.)

Interference, diversion

Needless to say that discussions around objectives or bonuses/variables also completely interfere with the real substantive dialogues. On this subject, when talking about objectives and variables, we’re often forced to define the “how”. While -for my part- I want the company’s strategy to remain in the hands of the founders (who listen a lot to those around them anyway), the tactical aspects: the implementation in the field should remain the preserve of those who actually implement them. It’s the dichotomy between “How” companies and “Why” companies to use the terminology of “freedom inc” (Getz & Carney). We (the decision-makers) must give our strategy, the why, the direction, etc. and leave everyone free to implement this strategy. But too often the objective forces us to define the how and therefore makes us lose flexibility, creativity, empowerment, autonomy, etc. And autonomy doesn’t mean that people will do just anything. If we manage to be leaders(*) rather than managers(*), we will be heard.

In short, my analysis drives me to want to eliminate all bonuses. And potentially to increase salaries in return (not necessarily at the salary+bonus level, but to find an intermediate arrangement). Without bonuses, I provide breathing room, the right to procrastination. I think that’s where all the richness lies. Like our half-ape half-human ancestors who suddenly stand up in the savanna to see further (and that changes everything: upright position, the brain grows, we spot dangers ahead, etc.).

I imagine that debates return to fundamentals: where are *we* going (the bonus being individual, it prohibits this *we*).

My partners retort: yes but without bonuses no one is pushed to move in the right direction. Some could “fall asleep”. Yes, but a) nothing prevents someone with bonuses from falling asleep too, b) nothing prevents us from firing them in that case. While I advocate that everyone feels free to leave the company if they wish (employees conceive of this too little). We shouldn’t hesitate to end a collaboration, but that doesn’t mean at the first drop in performance! who doesn’t have drops in performance??? This question of termination is however really problematic in France. It’s not easy and it’s costly, especially for a small structure like ours.

Another option would be to increase salaries so much that the absence of bonuses would become anecdotal (because comfort and survival would be largely assured). Unfortunately the company wouldn’t survive and that would really be a “short-termist” choice.

I haven’t eliminated bonuses because my other friends/partners don’t currently share my opinion. If I succeed I’ll tell you about the side effects of the absence of objectives and variables because one thing is certain: nothing is simple.

Looking forward to reading you when I return from vacation

* manager means boss, but the word in English goes down more easily, go figure why.

* leader means guide, but the word in English goes down more easily, go figure why.