Self organizing bonuses?

Question

My manager is a huge fan of agile, and is always talking about how great it is. Today he called a meeting and said that he's giving us an excellent opportunity to practice "self-organizing" within our team. He's said that our yearly bonuses are ready, and he has been given $51k for his team.

He has said that our assignment is self-organize and figure out how to split up this $51k pot of money among the 8 of us. Once we work together and come to an agreement, he will pay it out accordingly.

As expected, our "self-organizing" meeting has turned to utter chaos after he left. Everybody has a different idea of how to split up this pot of money:

• The top performer believes it should be split based purely on merit
• The bottom performer believes it should be split evenly
• The most senior employee believes it should be split based on a percentage of salary
• The most junior employee believe the lowest earners should get the biggest chunk
• The employee that makes horrible life decisions believes it should be split based on financial need

We spent 3 hours today debating (or more like fighting) over this. Things are getting very ugly.

First of all, is this actually a normal agile practice? Or is this just my manager being crazy? I'm not an expert on agile, but I've never heard of this before.

Secondly, what's the best way to approach this chaotic situation? How can I best facilitate/lead this discussion and encourage everybody to come to an agreement? This is the most crazy conflict I've ever had to deal with in my professional career.

Answer 1

This is not a normal practice.

Your manager picked the worst way to award a bonus.

They had an obligation to do this themselves, and they are avoiding having to make a decision.

They are making the awarding of the bonus money 100% transparent. That means that if under your favorite plan you would have received X and somebody else would have received x/2, they might be mad at you for pushing for that plan. Of course whatever plan is picked many (most) will not be happy with it.

The method of awarding bonus money should have been determined before the period of performance. That would allow management to know how to split the money. If that method was public they would have had to deal with the issue of either employees gaming the system, or let them know if it was by seniority then their performance wouldn't matter.

A question for the manger: how was the 51K amount determined. That might be the best way to split the money.

Answer 2

is this actually a normal agile practice?

Agile or not, it's absolutely not a normal practice. It's rather a clever way to split your team, much like the infamous Apple of discord did. And it will take quite some effort to persuade me that the manager didn't see the quarrel coming.

what's the best way to approach this chaotic situation?

Toss the ball back to the manager.

The problem isn't exactly that everyone on the team is pushing their own idea. The desire to get as big a share as possible is only natural, and it's quite understandable that everyone is suggesting a way which would make their own pockets heavier.

The problem is that the private interest is the only rational driving force in the discussion. You have nothing to balance it with and nothing to align it with. See, you might have had similar quarrels when discussing technical decisions before, but then there were arguments like "what's best for the product/team/company". And the discussion turned productive once your team has agreed on that bigger picture/goal/value. While in the current situation all those 8 forces are, obviously, not aligned. And you have no goal of greater value which could align and unite those forces... Yes, that was a really bad idea of your manager...

Answer 3

This is a cop out. Your manager is abdicating their responsibilities.

Unless your organisation has declared itself a holacracy then it's your manager's responsibility to formally review all of their employees' work performance, allocate bonuses as appropriate and (most importantly IMHO) provide everyone with feedback and coaching on where they can improve.

It doesn't mean that the boss can't elicit feedback from each employee's peers but the responsibility for allocating bonuses is a manager's, not the team's.

My guess is that they lack confidence and they're trying to avoid upsetting anyone who believes they've been treated unfairly.

I would recommend talking to HR about this asap.

I can't emphasize how wrong I believe it is for any leader to shirk off responsibilities like this.

By the way I'm a certifed Scrum Master and PRINCE2 Agile Practitioner and it really peeves me off when people use "Agile" as an excuse for nonsense like this. Agile and Scrum are about self organised teams to deliver products, your boss is conflating that with them not having to do their job as a manager any more.

Answer 4

Agree on letting the manager decide

Part of being self-organized is to recognize when you need support from the outside. This is one of these situations.

"Hey boss, we decided that the best way to split the bonus is to let you decide about it. You have the most experience with it and the best overview about everyone's performance."

Answer 5

This is certainly not a normal practice, and a very bad approach to the issue.

Having an agile team successfully working doesn't necessarily mean they are harmonizing, they just work efficiently. As much as your manager loves to boast about agile frameworks, it's better to keep them for work tasks and not for overall decision making, or at least the accountable ones.

Talk to the manager and have him decide or, if things get even uglier, contact HR.

Answer 6

The sad part is, your biggest problem isn't even the bonus anymore.

I want you to imagine a year from now, your boss announces what your raise is. "Dwayne, you've been doing a really good job, and I think you've really earned this $5,000 bonus. By the way, it's $2,000 less than the average bonus I gave your coworkers. Keep up the good work!"

See the problem? Every single member of the group is going to know if they got a "substandard" bonus. Want to give Alice $5k and Bob $4.5k this year? Well, they know that you're giving them less than the rest - because they've been told the total amount for bonuses.

Actually, I take that back. It's much worse than that. Because Alice was the junior employee and was hoping to get more than 1/8th since she's a low earner - and had visions of getting a $10k bonus and maybe had some ideas of how she could spend that windfall. Because Bob makes poor financial decisions and was thinking that, if it was given out on the basis of need, he might get $9k which would really help out with the credit card debt he's been swimming in.

Your biggest problem at this point isn't "How do you divvie up the bonus?" but "How do we keep the group together after this?" It doesn't even matter if you give the responsibility back to the boss, not really - because pretty much everyone's going to be disappointed regardless of who does the dividing now.

Because of all of this, here is what my recommendation would be:

• Split the $51k evenly. This is NOT fair. The top performer's getting shafted; the highest paid person's getting shafted. But this breakdown has the best chance at not destroying the team's morale/cohesiveness.
• Tell the boss he royally screwed up and that the team is on the verge of self-destructing - and that a really good way of helping out is to get some additional funds that would be spent on something nice for the group in-office - some deluxe office chairs, a brand new fridge for the break room, etc. Something that's additional, doesn't come at the expense of someone else, and is a boost to morale.

Answer 7

Every guiding principle in life, and agile is one of them, has situations where it can be applied, and situations to which it is not applicable.

Trying to apply one set of rules to everything is the same as if a doctor would try to apply one and the same medicine to every illness there is, and with same results:

• Some illnesses would be cured
• Some would be cured but not in the best way
• Some would not be affected
• Some would be made worse
• Some would be made a lot worse, possibly with patient death as the outcome.

EDIT:

OK, reasons why agile is not appropriate for this use case:

1. Conflict of interest.
2. Agile was never invented for anything of this sort
3. Agile self-organizing means each person can take from the tasks for the current sprint, what he thinks is the most appropriate; but the decision of one person does not affect the whole thing. In this case, it is not possible to make decisions piecemeal; it's a zero-sum game, any decision affects everyone else.

Answer 8

tl;dr: All options at this point are bad, and choosing any of them and imposing it on the team means that some will "win" while others "lose", and this will exacerbate the issue. The team needs to make a decision that moves things forward, but that will be difficult as long as each member seeks benefits for themselves.

As other answers have pointed out, no, this is not common practice, and no, this was not a good move made by your manager.

The problem, as you've seen, is that everyone will advocate for an approach which would (conveniently) happen to especially benefit them. And, now that all of the most obvious strategies have been publicly proposed by different people, even kicking the can back to your manager could fail because staff will be aware of the full bonus amount to be disbursed and can evaluate their own share against that value. At least in that case your manager would (rightly) bear the blame, but assuming that the manager is aware of that this is not an attractive option for them.

Right now, everyone is probably assuming that their preferred bonus scheme is the default and therefore any other option is one that takes money out of their own pockets. This isn't really a valid way to think about it (there is no default bonus payout option on offer), but that won't calm people down very much.

I advanced an idea about randomizing bonuses to minimize senses of winning/losing among a team which cannot agree yesterday, which was not popular (a likely preview of your team's reaction). I had a different idea last night which is better in many respects but is also vulnerable to being gamed: preference weighted voting.

There are a lot of ways to do it, but the easiest would be something like:

• People suggest possible ways to distribute the bonus pool (there's no real upper limit to how many suggestions you could use, but more suggestions makes preference ordering harder and also is one of the easier ways to game the system)
• Everyone votes for a method of distribution by writing a number next to it, with 1 being their most preferred option. Every person should record a preference for each option
• Each option then has its preference rankings summed, and the option with the lowest total wins

I've used this option, though never in a situation as severe as this one. Its best feature is that it gets people to consider options beyond the one that benefits them most, allowing you to get to "compromise" options.

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Below is an option which moves things forward, does not impose any one person's preferred solution, and pays out bonuses. It is not ideal, but offers minimally-passable damage control by paying bonuses without anyone "winning" at the expense of the others.

We're into the realm of least-bad solutions rather than most-good. I've been in roughly similar situations, where there is disagreement about how limited resources should be allocated among many parties with a personal stake in the situation. The best solutions have always been those which decouple advocating an option with receiving the maximum possible benefit from that option.

Here is what I would do in this case, assuming that the decision cannot be returned to the manager and bonuses must be paid out this year:

• Tell everyone that once a payout scheme is chosen and the payout amounts defined, each person will randomly receive one of the payouts. This can be done in any number of ways (drawing lots, rolling dice, picking numbers out of a hat). The important thing is that all participants agree that the choosing is impartial. Each participant has a chance of getting any of the payouts available under whatever scheme is chosen. The order of people being assigned payments can (and probably should) also be randomized
• Allow everyone to propose, at most, one idea for how the money might be distributed
• Calculate the different bonus values that would be available under each scheme (i.e., "merit based" would be one payout of $X, another payout of $Y, and so on until the pool is depleted, while "equal splits" would be 8 payouts of $6,375 each, etc.)
• Allow people to either vote on options, runoff style, or randomly choose one of the options
• Once a method is chosen, randomly assign the pre-determined payout amounts to employees

Obviously this is far from ideal. Since this is essentially a veil of ignorance setup, the rational thing to do would be for people to coalesce around an essentially even payout, since that maximizes the expected value of the least-lucky choice available, and anyone at all might be the least lucky in a random draw.

This is not necessarily a fair distribution, but since your group cannot agree on what would be fair that's not a realistic outcome to aim for. This approach is a way to move forward with the participation and buy-in (if grudging) of each employee. Everyone has a chance to offer an approach, and everyone has every chance of getting the best or worst bonus available under any given approach.

The most important thing to bear in mind during this process is that, had your manager done their job properly, the manager would have chosen a bonus payout method, and everyone would have been compensated according to that method with no chance to appeal or influence the process in their favor, and there would have been little conflict. Now that you're in this mess, it's the conflict that needs sorting out, and the bonus disbursement is almost secondary.

Answer 9

Calculate the amounts everyone would get with each suggestion, write them each in an excel sheet row, sort each row by value, highest first.

Highlight the first column (best bonus) and calculate the sum. Subtract 51k. Print out the sheet and go to your manager.

Whatever amount is missing, demand from him because you are doing his job. If he does not comply, go to his boss and ask for the funds.

This whole thing is just bonkers, make him pay!

Answer 10

Assuming the suggestions of going back to the manager or HR are unsuccessful, and the manager desperately wants the chaos to unfold here's my idea:

Let every member of the team confidentially state the minimum amount they would be satisfied with. To keep it confidential, an independent and trustworthy person (or the manager) could do collect the minimum number from each team member.

If the money can be divided such that every person gets their minimum amount, then split it that way (and divide the remainder evenly).

If not everyone gets their minimum satisfactory amount, then every member gets a small amount (e.g. $3,000) and the remainder ($27,000) is spent on something frivolous (e.g. lottery tickets (with an understanding that any winnings would be divided evenly)).

This would encourage team members to select a sensible amount and discourage greed.

Answer 11

Suggestion: let the team vote on how to allocate the money

The other answers have covered why your manager's idea isn't great. If I may suggest a way to break the deadlock, try to let the team vote on how to allocate the money. For instance:

• Distribute part of the money (e.g. half) evenly between team members so no one feels shafted.
• Distribute the other part based on how the team votes to allocate it.

To do the latter, put the name of everyone in the team on a ballot (use paper or a Google form). Then ask each team member to pick at least 3 names (and as many as they want) to let a consensus emerge in the team on who is most deserving of a bonus. Compute the total count for each name, much like you'd tally ballots with approval voting. And distribute the bonus accordingly. For instance if Joe gets 6 votes, Jane 5 votes, ... and Jack only got his own vote, and 32 approval votes got cast in total, then their shares of the merit-based part would be 6/32, 5/32, ..., and 1/32.

If the team doesn't agree that half or some other portion of the money should get distributed evenly then and there, then get them to vote on that too. For instance:

• Do you approve splitting part of the bonus evenly?. Yes = 1; No = 0. (Example total: 5/8.)
• Do you approve splitting part of the bonus based on the base salary? Yes = 1; No = 0. (Example total: 3/8)
• Do you approve splitting part of the bonus based on merit [using the described method above or something like D'Hondt or Webster/Sainte-Laguë]? Yes = 1; No = 0. (Example total: 6/8.)

Then allocate accordingly. (Example: 5 + 3 + 6 = 14 approval votes got cast in total. So 5 / 14 of the pot gets shared evenly, 3 / 14 of it gets shared based on base salary, 6 / 14 of it gets shared on merit.)

Answer 12

I think you have a very clever (or sneaky) manager. He's taken you at your word about agile and is letting the team decide. Turns out you're rubbish at it, don't blame him for not taking control and coming up with some arbitrary bonus awards.

So you need to get better at self-organising, negotiating and compromising on this, or go back to the manager and be prepared to say we're rubbish and you have to tell us what to do from now on", because he will treat it as an example of how a "self-organising" team, failed miserably.

From my days assigning bonuses, they are pretty arbitrary anyway, so there's no right way to do it, anything you come up with will be acceptable.

So. You must get the team to start understanding their responsibilities towards the "work" (ie dividing the bonus up) with less regard to their personal preferences. Its no tmuch different from getting some work to write a website and each team member thinks they want to do it using the latest coolest technologies, or in ways that benefit themselves, cash just makes it a lot more obvious.

You could suggest that each member gives a suggestion and then all the others vote on them, planning poker style (use the agile tools, Luke) or give each member a vote on the suggestions (without voting for their own) and discard the weakest ones.

But whatever you do, get organised, don't let your manager beat you with your own ineffectualness. Get organised, it'll benefit your work too.

Answer 13

Since a bonus definition is a gratification of a well done job. I suggest the following. 50 % of the bonus to be split according to option one ^ best performer ^ 25% of the 51k to be split based on the in percentage of salary. Because bonus can be considered as a salary extra benefit. 25 % of the 51k should be distributed evenly to maintain the team spirit, somehow everyone has contributed to the performane . Michel