4 ms·

I'd be curious to hear about profit sharing or bonus structure ideas that still align the employee with the actual outcome of the business, but give them a more

I'd be curious to hear about profit sharing or bonus structure ideas that still align the employee with the actual outcome of the business, but give them a more direct benefit.

dhimes 11y ago
I'm considering that as well. Peldi from Balsamic has written about it https://blogs.balsamiq.com/team/2011/09/12/profitsharing/ https://blogs.balsamiq.com/team/2011/09/12/profitsharing/ Edit: I don't know about an update, but there was discussion on HN: https://news.ycombinator.com/item?id=2986673 https://news.ycombinator.com/item?id=2986673
- aub3bhat 11y ago
  That was posted in 2011, is there an update? In my opinion such structures make it difficult to raise funding, and in highly fluid markets such as the one Balsamiq operates in, a well funded competition can easily crush you. I have seen several employee owned companies in Healthcare Policy/Research (E.g. Mathematica Policy or SSS), where they are funded by a constant stream of government contracts/grants which are intimately tied to the company and with very low probability of a competitor winning them.
  - patio11 11y ago
    a well funded competition can easily crush you Who crushed Balsamiq? <spoiler>Nobody.</spoiler>
    - aub3bhat 11y ago
      Considering it is cash-positive small company, someone might be crushing them and we would have no way to know. It seems the flurry of positive press that they were getting seemingly ended in 2012 ~ 2013. Not that it reflects as an evidence towards their impending demise, but there is little evidence to contrary. Even with a company that has ideal/fair distribution of profit, the inherent smaller size translates into a higher risk.
      - justinclift 11y ago
        Also note their product is/was based on Adobe Flash (now Air?), which is increasingly unpopular, if not being phased out in many places due to it's terrible security record.
        balsamiq 11y ago
        Not for long... ;)
        justinclift 11y ago
        That's excellent news. :)
      - balsamiq 11y ago
        I think if someone would be crushing us, we'd find out pretty quickly, as our sales would decline. So far, they've done just the opposite. Here's my latest yearly status update: https://blogs.balsamiq.com/team/2016/02/05/looking-back-at-2015/ https://blogs.balsamiq.com/team/2016/02/05/looking-back-at-2... - with revenue charts! :)
        justinclift 11y ago
        Reading through that, the "native HTML/JS editor" is welcome information. The "We started the year by building a proof-of-concept application on Windows, Mac, Linux, Android, iOS, and HTML/JS." is good for Linux support. Any chance of BSD support as well? :)
  - balsamiq 11y ago
    Hi there! Peldi from Balsamiq here. The profit sharing program is one of our most successful policies. The only update it required since 2011 is that we raised the percentage of profits to be shared from 10 to 15%, and we might raise it again in the future as we have more and more employees.
    - dhimes 11y ago
      This is excellent. Thank you.
maneesh 11y ago
At our company, we offer a bonus based on company revenue. If you are part of the company as we grow, you get a direct bonus
- jdmichal 11y ago
  I honestly don't understand why it's any harder than this. If you want people interested in the revenues of the company, then give them a cut in the revenues of the company. If you're private, then it should be in hard cash. If you're public, then stock is an OK substitute because it can be easily liquidated. I suppose the hard part comes when there isn't any revenue to share. Maybe that's why startups use ~~lottery tickets~~ equity to attempt to achieve the same.
  - mentalpiracy 11y ago
    This model is a problem where a company (usually beyond the startup phase) has multiple profit centers. Success in one division can be dragged down by substandard performance elsewhere, if (poor/unethical/ignorant) management chooses to measure it so. I just left a job where my division (which consisted of just 3 people) produced nearly a million in profits for 2015. We were told by management that there would be no raises or bonuses for us, simply because overall company sales were flat. The three of us left. You cannot retain talent if you make your top producers beholden to operations they cannot possibly affect.
    - jdmichal 11y ago
      No doubt. I've been in a similar situation; one of the top-performing groups that got zero reinvestment because all our profits had to support the rest. [0] Unfortunately, I came to the same decision that leaving was the best solution for me. I'm not really sure what the correct response is to these situations, short of removing some of the weight so that the rest can hopefully rise higher. [0] I've discussed one of the symptoms before: https://news.ycombinator.com/item?id=11167407 https://news.ycombinator.com/item?id=11167407

I'd be curious to hear about profit sharing or bonus structure ideas that still align the employee with the actual outcome of the business, but give them a more direct benefit.

dhimes 11y ago

I'm considering that as well. Peldi from Balsamic has written about it https://blogs.balsamiq.com/team/2011/09/12/profitsharing/ https://blogs.balsamiq.com/team/2011/09/12/profitsharing/ Edit: I don't know about an update, but there was discussion on HN: https://news.ycombinator.com/item?id=2986673 https://news.ycombinator.com/item?id=2986673

aub3bhat 11y ago
That was posted in 2011, is there an update? In my opinion such structures make it difficult to raise funding, and in highly fluid markets such as the one Balsamiq operates in, a well funded competition can easily crush you. I have seen several employee owned companies in Healthcare Policy/Research (E.g. Mathematica Policy or SSS), where they are funded by a constant stream of government contracts/grants which are intimately tied to the company and with very low probability of a competitor winning them.
- patio11 11y ago
  a well funded competition can easily crush you Who crushed Balsamiq? <spoiler>Nobody.</spoiler>
  - aub3bhat 11y ago
    Considering it is cash-positive small company, someone might be crushing them and we would have no way to know. It seems the flurry of positive press that they were getting seemingly ended in 2012 ~ 2013. Not that it reflects as an evidence towards their impending demise, but there is little evidence to contrary. Even with a company that has ideal/fair distribution of profit, the inherent smaller size translates into a higher risk.
    - justinclift 11y ago
      Also note their product is/was based on Adobe Flash (now Air?), which is increasingly unpopular, if not being phased out in many places due to it's terrible security record.
      - balsamiq 11y ago
        Not for long... ;)
        justinclift 11y ago
        That's excellent news. :)
    - balsamiq 11y ago
      I think if someone would be crushing us, we'd find out pretty quickly, as our sales would decline. So far, they've done just the opposite. Here's my latest yearly status update: https://blogs.balsamiq.com/team/2016/02/05/looking-back-at-2015/ https://blogs.balsamiq.com/team/2016/02/05/looking-back-at-2... - with revenue charts! :)
      - justinclift 11y ago
        Reading through that, the "native HTML/JS editor" is welcome information. The "We started the year by building a proof-of-concept application on Windows, Mac, Linux, Android, iOS, and HTML/JS." is good for Linux support. Any chance of BSD support as well? :)
- balsamiq 11y ago
  Hi there! Peldi from Balsamiq here. The profit sharing program is one of our most successful policies. The only update it required since 2011 is that we raised the percentage of profits to be shared from 10 to 15%, and we might raise it again in the future as we have more and more employees.
  - dhimes 11y ago
    This is excellent. Thank you.

maneesh 11y ago

At our company, we offer a bonus based on company revenue. If you are part of the company as we grow, you get a direct bonus

jdmichal 11y ago
I honestly don't understand why it's any harder than this. If you want people interested in the revenues of the company, then give them a cut in the revenues of the company. If you're private, then it should be in hard cash. If you're public, then stock is an OK substitute because it can be easily liquidated. I suppose the hard part comes when there isn't any revenue to share. Maybe that's why startups use ~~lottery tickets~~ equity to attempt to achieve the same.
- mentalpiracy 11y ago
  This model is a problem where a company (usually beyond the startup phase) has multiple profit centers. Success in one division can be dragged down by substandard performance elsewhere, if (poor/unethical/ignorant) management chooses to measure it so. I just left a job where my division (which consisted of just 3 people) produced nearly a million in profits for 2015. We were told by management that there would be no raises or bonuses for us, simply because overall company sales were flat. The three of us left. You cannot retain talent if you make your top producers beholden to operations they cannot possibly affect.
  - jdmichal 11y ago
    No doubt. I've been in a similar situation; one of the top-performing groups that got zero reinvestment because all our profits had to support the rest. [0] Unfortunately, I came to the same decision that leaving was the best solution for me. I'm not really sure what the correct response is to these situations, short of removing some of the weight so that the rest can hopefully rise higher. [0] I've discussed one of the symptoms before: https://news.ycombinator.com/item?id=11167407 https://news.ycombinator.com/item?id=11167407