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Pool Bonus

With the pool bonus, a small percentage of the company’s turnover is set aside throughout the year and at the beginning of the following year, normally at the annual gala, a sizable check (both in cash value and physical size) is paid to the qualifying leaders in front of the entire team. 

This has two powerful outcomes: 

The first is that you ensure that your team leader does not leave the business. During the year you will keep reminding them of the big payday they will be getting. This solves one of your biggest challenges, which is leadership retention. It provides you with considerable leverage and helps you to keep the leadership focused.

The second outcome is that you create powerful and highly visible proof that the business works. The check is handed over with a great deal of pomp and circumstance. When your team sees what is possible it will motivate many of them to significantly higher performance levels. If your team thinks it is possible, they will work at the business. If they see what is possible, they will succeed. 

A good example of this is Roger Banister, who broke the 4-minute mile. For decades, athletes had been trying to achieve this goal without success and then Roger did it in 1954. His record only lasted 46 days. Once everyone knew it was possible, numerous people achieved a sub 4-minute time and even surpassed the master. The bottom line is this - once your people see one person achieve high income, they will believe and achieve the same or even greater levels of success. 

How the pool bonus is calculated:

Let’s say we have a team leader position called Diamond and that Mary and Jim are both at Diamond level. We will also assume that the company has a turnover of $12M per annum and that you are allocating 1% to the pool bonus. This will mean that you have $120,000 set aside for this bonus.

Next, we need to look at the team volume for the two leaders. In this example, Jim is responsible for $3M in total team sales and Mary is responsible for $9M. It is obvious that they should not receive the same amount. We therefore divide the bonus in direct proportion to their contribution. Mary gets 75% ($90,000) of the pool bonus and Jim gets 25% ($25,000). 

This is a very simple example and you will probably want to split the commissions over several leadership levels and have qualification requirements, but the key is to make them achievable and lucrative and then brag about the winners in every forum you have access to. Hang a beautifully framed portrait on the office wall, post their story and picture on your website, in the newsletter, on Facebook, Twitter. Heck… send up smoke signals if you think it will get the message out! Their job is to achieve the goals you set out in order to get the big payday and your job is to brag about it to the world.