Peer review processes for company shareholders [closed]

Question

I'm one of five shareholders in our company (all shares are split evenly between us). When we decide to pay out dividends, instead of doing a payout directly proportional to our shares in the company (i.e. everyone gets the same amount), we would like to determine the percentages for each shareholder by using a combination of performance metrics (like actual time worked, work performance, a baseline amount just for being a shareholder, etc.) and compare results relative to each other.

There are more complex details to the whole idea so I won't explain it here. We are well aware of the potential negative and positive tradeoffs (like people being unhappy if they are rated lower than their personal impression of themselves). Needless to say we have all discussed it in great depth and are in full agreement to proceed with it.

The crucial part that is still missing is how to evaluate work performance. For various reasons we can't apply objective metrics to work performance (or to put it another way 'importance to the various projects each of us worked on'). For example, there are artists involved and rating their contribution can only be done on a subjective basis.

For this reason we want to apply some form of peer review process. What formal peer review processes, or concrete examples of peer review processes used in real world companies are there?

Answer 1

What formal peer review processes, or concrete examples of peer review processes used in real world companies are there?

I knew of one small high-tech company that divided up a significant bonus pool during an open year-end review session that lasted a 3-day weekend.

If I remember correctly, they all gathered offsite, went over the significant events from the year, went over all the numbers for sales, new customers, etc, and then discussed bonus allocations.

I believe they started with the premise that everyone gets an equal bonus, and then each person in turn talked about the accomplishments of the others (not themselves), and put in a "pitch" for why others should get more than an equal share.

Presumably, at the end of the weekend, people would end up with unequal shares - based on how much they contributed to the success of the company over the preceding year, as judged by everyone else.

I remember that they were quite pleased with the results of the process the first two years. I sort of lost direct contact after that, but I heard through the grapevine that it didn't go quite as well in subsequent years. I don't know the details, other than the fact that some partners felt cheated.

This isn't something I would ever advocate for, but I suppose it could work.