I work at a growing startup. My position is close to being Chief Technology Officer (CTO); I manage admins, developers (sometimes I develop as well), designers, I resolve technical issues, do some web marketing, I hire the people I need. I'm creating tasks myself, I know the things which the company and clients need and I implement them.

You know how it works in startups - there is no concrete position name.

Some time ago I spoke to my Chief about increasing my salary. He agreed to increasing it after achieving specified revenues goals. We achieved it, and the Chief offered to increase my salary with bonuses. Bonuses have to depend on my Key Performance Indicators (KPI). The chief can not determine exactly how to measure my effect on KPI and asked me to think about it.

I know and the Chief knows my work doesn't influence the company revenues directly. Of course it does, but it's uncalculated. For example we have sales staff where KPI can be calculated very easily and bonuses depend on sales.

How should bonuses relate for technical positions? What can I propose as ways to measure my impact on KPI?

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    Alexey, welcome to The Workplace. I've made some edits to your question (clarifying KPI, mainly); if there's anything in my edits that you don't like, you can edit further. Thanks. – Monica Cellio Jun 21 '15 at 17:06
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    I will point out that a bonus is no way equivalent to a salry increase. I personally woudl reject teh bonus idea entirely. It is not in your best interests to accept a bonus in lieu of a raise. – HLGEM Jun 21 '15 at 18:17

How should bonuses relate for technical positions? What can I propose as ways to measure my impact on KPI?

It's my belief that bonuses should only be related to actual company performance - not some phony proxy for impact.

Instead of inventing some KPIs or metrics that may or may not have any direct proven connection to company success, I suggest just having everyone's bonuses connected directly to company success (usually profit). That way, everyone shares in the company success and finds their own way to contribute.

These profit-sharing bonuses should apply to everyone - technical or otherwise. The only possible exception would be Sales folks who already have a traditional commission role.

There are just too many ways where individual measures can go awry, leading to corporate dysfunction where the good of the individual is unwittingly pitted against the good of the company. I've seen it happen many times both personally and professionally.

Before implementing any bonus system, I suggest reading and understanding "Measuring and Managing Performance in Organizations" by Robert D. Austin. It will tell you about the pretty much inevitable dysfunction that arises when knowledge workers are incentivized by well-meaning bonus systems.

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    and that applies to people with a clear job description, the fact that he fills various shoes in a start-up makes it even more impossible to come up with a KPI that makes any sense. – Formagella Jun 21 '15 at 20:57
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    +1. He should have more or less the same KPI's as the Chief: just one. – Avon Jun 21 '15 at 22:19
  • Joe, but what about bonuses for closed tasks? I mean what's wrong with making a month or quarter plan for developing/marketing? – Alexey Jun 22 '15 at 11:21
  • @JoeStrazzere I mean, I make a month plan (100% bonuses). There are tasks and each task has a "cost" in % of plan. Cost can be mesured in priority or efforts. If the team closes 80% tasks -- they get 80% bonuses. I think this is a common benefits system, isn't it? – Alexey Jun 22 '15 at 11:35

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