A privately-held Financial Services Company received a cash infusion by a private investment company with the primary objective of funding growth. Previously, the bonus plans were subjective and discretionary. With the advent of new growth expectations, there was a desired to implement formal bonus arrangement tied directly to the performance of the organization.
The culture of the company was also in a state of transition. Previously each division operated independently with very little perspective of the rest of the organization. Intra-Division cooperation was deemed a key driver of growth for the organization.
We led a management advisory team to work through some of the cultural issues that would impact the financial performance. The advisory team identified the possible key performance measures as well as the hurdles for success.
We recommended an annual bonus plan that contained three elements: Corporate, Division, and Department. The Corporate component contained two metrics that were directly tied to the annual forecast. We worked with each Division head to identify two key performance metrics for the fiscal year as well as to cascade the metrics down to each Department in order to develop supporting measures. Finally, we developed communication material to launch the Annual Bonus Plan company-wide. The communications plan contained four features: CEO announcement letter, Division presentation, Bonus Plan Workbook, and all employees Q&A’s
While the Group Bonus Plan was implemented, the process uncovered a host of organizational issues that required further exploration and resolution. The bonus plan was deemed a management tool that supported the organizational transformation.