Individual or team reward?
Bonuses and benefits are becoming increasingly important for staff retention and in some cases are overshadowing basic salary. One of the issues looked at regarding bonuses for credit control teams has been the relative effectiveness of individual versus team bonuses on productivity.
Varying degrees of difficulty
Bonuses can be difficult to judge in relation to collection rates, as certain members of staff within a team could be responsible for a more difficult ledger than others. However, it does not necessarily mean that the person is any 'worse' at their job than someone who collects more debt on a ledger that could be deemed ‘easier’.
There is a school of thought that believes that a team bonus is more effective, as people will tend to motivate each other to perform well and reach targets, subsequently creating a better team environment. The key here is that you are driving people forward as a team, while at the same time supporting individual development. You would get more productivity out of a team if you target bonuses to the team.
However, there will always be some individuals who will work harder than others - why should these under-performing staff receive a bonus based on what the harder workers of the team achieve? This can create friction within the team as the hard workers will, at some point, cotton on to this point. Individual bonuses work better as people who do well are rewarded and offer an incentive for staff to put that extra effort.
Key motivator
Team bonuses can cause aggression within the team if someone is not pulling their weight. Some teams are given bonuses based on the percentage of work done on each person’s individual ledger. This is the favoured option of some comanies who reward top achievers - typically, the bonuses are only based 50% on financial figures and the rest is based on the individual’s results in internal customer focus/management.
Whichever option takes your fancy, one thing has become apparent - bonuses are becoming an important part of any credit control team, and greater focus is being placed on them. This is congruent with the renewed emphasis on credit control being seen as a true sales function where sales professionals are generally bonus-driven and this is often what drives good results.
Whether it be the individual or team option, there is no denying that bonuses are key in motivating teams to achieve.
