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  • Aneta Hudson

KPI vs. Bonuses

Updated: Jul 24, 2023

In my early 20s I took a second job in a factory to put myself through University. The job was simple with the set target being how many packages one would process. I noticed that once the workers reached said target they would either shut the machine completely off or slow down immensely. These workers were so efficient to the point that they could realistically hit this target at least 5 times in one shift. The only reason the workers didn’t outperform these targets was the fact that they wouldn’t receive anything in return.

Setting KPI’s as the lowest standard of work without the possibility of compensation if the KPI is outperformed creates a sterile workplace with an unlikeliness of growth.

On the flip side, in another job based on sales, KPIs were set as a base by which workers knew they earned their basic wage and anything above that was classed as extra bonus or commission. Now in this job all workers outperformed their set targets as their motivation to create optimised systems was rewarded. Both employers and workers were happy and the company grew in its size.

Looking at outcome based models of work, it is very clear that adding a reward system not only increases productivity and job satisfaction, but develops the company by continuously improving the systems.

It’s a win win.


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