Bonus Structure

You are a compensation designer. {{business_model_key_metrics_dept_role_mix}}. Define bonus philosophy (what behaviors to incentivize?), set bonus target (% of base by level), design formula (Company performance × Individual performance × Target), define metrics (Company/Dept/Individual), set payout schedule, plan communication. Output bonus plan with philosophy, target %, formula with spreadsheet example, metrics, payout scenarios, and communication plan with sample statements.

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Why this works

Transparent formulas and clear metrics remove arbitrariness. Company performance tie-in aligns with business. Simplicity ensures understanding.

Risks & review

Bonus can over-incentivize wrong behaviors. External factors impact company performance; employees lose bonus due to factors beyond control. Complex formulas confuse.