Can Bonus.ly transform employee incentives?
Employee motivation is one of those issues that seldom seems to go away. Despite much evidence to the contrary, many organisations persist with extrinsic motivators rather than intrinsic ones. The performance appraisal system is another that largely remains rooted in traditional methods, despite systems such as Rypple (now Work.com) attempting to make the process more democratic.
A new start-up is attempting to merge the appraisal process with the extrinsic motivation process by offering peer-to-peer rewards. The company, called Bonus.ly lets employees determine the financial remuneration offered to their peers.
“When workers feel recognized, they will perform better, work harder and are more motivated,” said Raphael Crawford-Marks, who built and co-founded Bonus.ly with his longtime friend and colleague John Quinn.
They wanted the system to help reward people for doing good things, in the belief that too much of modern management is stick rather than carrot.
The system allows managers to establish the currency that will be used, be that financial or non-financial (ie perks). Each employee is then allocated a monthly allowance that they can award to other employees.
Each employees budget expires at the end of each month, so the system encourages people to use it or lose it, with the aim of encouraging people to give positive feedback regularly.
“The employees competing for peer rewards are motivated by the recognition itself,” Crawford-Marks said, adding that “the praise I give is almost equal to the praise I get from a manager or someone in senior position.”
The first use of Bonus.ly was at Oracle last November. They used the system amongst 78 employees. Whilst they have stats on usage, no data was forthcoming on performance or engagement improvements.
The Bonus.ly system is currently free as it’s in an alpha testing period. The plan is for it to remain free for the duration of this time, after which companies will be charged on a per-employee basis.
With so many in the management world of the impression that cash bonuses do more harm than good, it’s certainly an interesting approach to driving performance and engagement. I think more evidence on the results of trying Bonus.ly are needed before it can be regarded as a good system however.