Business Development Manager - Bonus

[sarasorrento]

Hi there

I have a Business Development Manager who, along with myself (MD), is charged with the profitable growth of our company.

I have just put together a 2012 budget that includes a healthy sales growth for two of our product ranges. This growth is reasonably challenging, but there is opportunity for stronger growth if we focus and push hard.

My questions is: Should my BDM be paid a bonus for simply hitting the 2012 budget? In my view, this is what the business it targeted to do, and what I expect the business to achieve. To my mind you are rewarded with a bonus when you exceed the budget not just hit it.

My BDM sees it differently. He believes that, because there is growth in the business, then he should be rewarded for acheiving it.

By the way my BDM is not poorly paid, so I do not believe he needs a 'bonus' just to get a decent salary.

What do you guys think?

Sara

 

[Optegris]

Compromise. Pay him a small sum for achieving the budget and then extra bonuses for exceeding it by say 110%, 125% etc...

One of my sales jobs was such that I got bugger all commission if I failed to reach my budget but escalated bonuses for exceeding it...

 

[Optegris]

Secondly he is unlikely to hit the budget bang on. It will either be missed or exceeded...

 

[sarasorrento]

Thanks openmind

Yes, a small payment on reaching it, but incrementally increasing it for over-budget achievement makes sense.

I guess it is the principle of paying a bonus for hitting a plan that reflects 'normal' business growth that I have a problem with.

If he exceeds budget I have no problem with paying him a sliding scale up to 20%, even 30% of his base salary.

To my mind a bonus needs to be self financing, ie above budget achievement.

Sara

 

[Optegris]

Then don't call it a bonus for hitting the target, make it part of his salary. Only pay the bonus element when over achieving...

 

[tony84]

Just set him a target. Its his job to reach that target.

Its none of his business what your business does and if it earns a profit or not. His job is to hit that target and in return he gets a bonus.

My opinion is that if he is expected to bring the business in so that you break even, if he doesnt he doesnt have a job.

 

[Deleted member 130387]

Hi there

I have a Business Development Manager who, along with myself (MD), is charged with the profitable growth of our company.

I have just put together a 2012 budget that includes a healthy sales growth for two of our product ranges. This growth is reasonably challenging, but there is opportunity for stronger growth if we focus and push hard.

My questions is: Should my BDM be paid a bonus for simply hitting the 2012 budget? In my view, this is what the business it targeted to do, and what I expect the business to achieve. To my mind you are rewarded with a bonus when you exceed the budget not just hit it.

My BDM sees it differently. He believes that, because there is growth in the business, then he should be rewarded for acheiving it.

By the way my BDM is not poorly paid, so I do not believe he needs a 'bonus' just to get a decent salary.

What do you guys think?

Sara

In what line of business are you Sara?
Is the total increase in sales' growth attributed to the BSD?

Andreas

 

[Chris Ashdown]

My question is what percentage increase you expect in sales this comming year say based on last quarter or half year figures so you have a baseline for where you expect to be if nothing changes

Then I would seperate exsisting clients from new clients

For exsisting clients, pay him a small bonus for say growth over 10% of what you expected them to order this year, as it's easier to get more sales from exsisting customers

For new sales, which is what you really want to get, give him a better bonus for sales over your new clients target

 

[TelesMedia]

i think monthly set targets work very well, keeps the person fresh and pushing each month.

Yearly, you could see someone relax after a few months if well on target and give up if no where near target.

 

[RevaxMedia]

To be a business Development managers job is to grow the business which is what he is paid for, why should he get paid more if he is doing his job correctly? always have an incentive if the targets are higher but I think if he is well paid to offer a bonus structure if he exceeds the target.

 

[i234i]

I've had a thread going here regarding Bonus / Targets and Incentives for Staff as i'm trying to input them into my business and looking for peoples ideas.

http://www.ukbusinessforums.co.uk/forums/showthread.php?t=240669

I have a pub thats opened with an Assistant Manager. There are currently just myself and her working there.

What do you think the best way to set targets, bonuses and incentives in this sector? Anyone experience of it, I have but only of my previous employer which is why i want your opinion.

Which staff levels should get bonuses/targets and how should i differ them?

Bar Staff, Supervisor, Assistant Manager and Bar Manager are current vacancies in my fully operational pub. I want it to be the same across both outlets etc and need a base to start from.

Sorry for hijacking your thread.

I think Lush do a decent bonus scheme? but they are hippy and all staff gets a bit of it, its a monthly one where they have to increase sales by 5% on last month or that month last year (one or the other!)... December always hitting it... Which i think is good to keep the staff on there toes, but i'm guessing all of the shops do this from when profit level is hit? I'm struggling with the best way to go in my business.