Why do PR firms get their employee bonus schemes so wrong?

The best PR agencies have a big problem. A recruitment problem. They can’t hire people fast enough to cope with the increased demand on their services. It’s a good problem to have because it means they are increasing in size, but it’s a problem that threatens the continued growth of the sector.

I have written before about the various solutions to this issue (here and here) but many of these will take time to implement. A faster, probably more effective solution, is for PR firms to sort out their bonus structures. Guess what, shock horror – people go to work to earn money and are motivated by the opportunity to earn more money!

I am often amazed by the spurious, non-transparent, “depending-on-business-performance” type of bonuses given by PR firms.

It is a basic sales team motivation lesson – a bonus structure must be transparent, achievable, but challenging.

I do know of a few bonus structures in PR agencies that motivate their people, but not enough. I know of a lot more that are pretty non-committal. If a bonus scheme isn't transparent and acheiveable it acts as a demotivator, rather than a motivator.

With all this in mind I recently caught up with a leading CEO and he/she agreed to give me the inside view on their bonus scheme as long as I did not reveal the name of the firm.

The agency in question is part of an international plc, claims to have a lower staff turnover than most PR firms and has grown rapidly in recent years.

Here’s how the employee bonus scheme works:

It is a quarterly scheme split into two separate areas: Personal performance and business performance.

The personal performance part has four criteria:

  1. Quality of work
  2. Contribution to teamwork
  3. Commitment shown
  4. Innovation/magic dust

Each of these elements is given a mark out of four. So your maximum score as an employee each quarter would be 16. An expected, normal score might be 11/16.

This personal score is then multiplied by a quarterly business performance score. Zero being no quarter-on-quarter growth and 1.5% being an outstanding percentage quarter’s growth. This bonus multiplication ratio is written in contracts, it’s not open to interpretation.

If your personal score was 11 and the business performance score was 1 you would get a score of 11. Which would mean you’d get a bonus of 11% of your salary.

You can argue whether this is generous or not. But it is transparent, achievable (ie, your own contribution will count) and it is challenging (ie, if you work hard, you earn more.)

Why more PR firms don’t have proper motivational bonus schemes is a mystery to me. It means your best people are incentivised to make you, and them, more money.

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