Worksheet: Put what the bonus paid for beside the objectives

A bonus that pays on one number rewards exactly that number, whatever the objectives say. This sheet writes down what the last bonus was paid for, person by person, and compares it with what the business says it wants. It builds the Competent step of the check:

The bonus pays on no more than five things per person, each traceable to a written objective.

Step 1. What was actually paid for

Use the plan if there is one. If the owner decides at year end, use what was paid and the reason given at the time.

Person or role	Paid last year ($)	What decided it, in plain words	Written objective it traces to
e.g. Sales manager	$18,000	Revenue against budget; nothing else counted	None: the objectives ask for margin

Step 2. Compare

What the business says it wants	Paid for? (yes, partly, no)	What the money went to instead
e.g. Teamwork
e.g. Margin
e.g. Safety
e.g. Customers kept

Paying on revenue alone buys sales at any price.

Step 3. Test the redesign before choosing it

Test	Option A	Option B
Covers the right people and the right measures
Large enough to change what people do
Clear goals, simple sums
Our systems can report every measure it pays on
Rewards the behaviour we want this year and next
No more than five measures per person, each traced to an objective

Done when: each person's bonus pays on no more than five things, and each one traces to a written objective.

Adapted from our own incentive workshop (Kearney era, 2001).