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Payroll, Raises, & Bonuses

how "normal" agencies handle this:

Do most employees get performance reviews and raises at the employees anniversary each year?

If review is not given by the mgr until a few months past the employees anniversary date does the employee get back pay to the anniversary dates?

Do you give end of year bonuses or performance raises and performance bonuses (at time of anniversary) or both

Do you have a great method of review for your managers to follow?

Thanks for your help.

Suzanne Nolan

We have performance reviews formally once a year (informal evaluations are supposed to happen to check performance against past performance review and to keep surprises to a minimum at the next). Those reviews happen in June. In July we assess for once a year raises. This is a good time for agency's as we should be able to get a good snapshot of the first 6 months and a pretty good time for estimating the final 6 months. Raises are first based on the profitability of the company, then they are performance based out of that allotment.

We do not review on anniversary, thought about it, but really hard to manage. We would have spent a great deal of time following up on whose turn it is to get reviewed and making sure the supervisor actually reviewed. Plus, it is really hard to assess the financial health of the agency. We prefer to handle it all at the same time, once a year. We pride ourselves on doing a very thorough review process, but inevitably it is a subjective process and someone's nose is going to get out joint. May as well get them all at once....

We do give end of year bonuses, again based on the profitability of the agency first, performance second.

We do have a pretty good review process. I spent 9 months reviewing other agency's and company's policies regarding performance reviews and job descriptions. We started with implementing the job descriptions and then introducing the performance review. We also train the reviewers every year. I would be happy to send some of these documents to you for your review, and I have the names of a couple of books that make for some "light night time reading" (read snore....), but were valuable nonetheless.

Shelly Constantz

Albeit far from "normal" this is what we do...

We give a performance and compensatory review annually on employee anniversary date.

If the review has been delayed the raise is retroactive.

We give end of year holiday bonuses.

We use a weighted review form for everybody. There are unique categories pertaining to the specific job and general categories pertaining to characteristics. They are weighted on a scale from 1 to 10.

Roxanne Cowan

On our employees anniversary they receive one of three raises: ?Zero if they're under-performers -- lucky to keep their job ?3-4% if they're just okay -- this is to keep up with inflation ?Above 4% - if they've performed well

If we're unable to meet with an employee during the anniversary period any raise they receive is retro-active.

Also, at end of year we have discretionary bonuses for the staff, which has nothing to do with their annual raises.

I hope this helps.

Regards,

Claudia Valderrama

At our agency we have annual reviews with raises. Generally it is a cost of living raise unless work effort merits a bigger raise. Additionally at year end we give bonuses based on how the company performed.

If an annual review is not done on a timely basis, the raise is back dated to the anniversary date.

I hope this answers your questions.

Ann Adams Controller J. Stokes & Associates www.jstokes.com

How do you find the cost of living expense?

Ed Miller

You can go to Social Security Website (...ask Jeeves...) for annual COLA adjustments. I've listed the posted adjustments for this year and prior:

(Caveat: these are national. You may live in a region that fluctuates. Ask Jeeves can give you regional adjustments too.)

Automatic Cost-Of-Living Adjustments Year COLA 1975 8.0% 1976 6.4% 1977 5.9% 1978 6.5% 1979 9.9% 1980 14.3% 1981 11.2% 1982 7.4% 1983 3.5% 1984 3.5% 1985 3.1% 1986 1.3% 1987 4.2% 1988 4.0% 1989 4.7% 1990 5.4% 1991 3.7% 1992 3.0% 1993 2.6% 1994 2.8% 1995 2.6% 1996 2.9% 1997 2.1% 1998 1.3% 1999 2.4% 2000 3.5%

Roxanne Cowan

We give reviews and raises at every employee's anniversary, which is retroactive if late. Our raises are based on company performance, then employee performance. We stay up-to-date on company performance by running cash-position reports regular basis. We also run employee productivity reports at least once a month. This way, we are always prepared to offer competitive raises, which average between 5 and 8%.

We also have min-reviews every quarter when we give out quarterly bonuses. The bonuses are based on company profitability and then each employee's performance for the quarter is evaluated and they get a slice of the proverbial pie.

Our reviews are conducted by our company president (who is very hands-on) and the two vice presidents (all of whom also function as managers). There is little formality involved. The "managers" get together ahead of time to discuss the employee's performance. Then they call in the employee and have a round-table discussion of strengths and weaknesses. The employee is given ample time to comment also. The raise (or check if it's a bonus) is then disclosed.

Until we grow too large to accommodate this fairly laid-back review process, it works well for us. We're happy not to deal with such formal evaluations in such a creative atmosphere.

Kristi Long

Bonus Survey

Taking a survey: What is an average bonus given to staff? What methods do you use to calculate? Do you give annually only?

Roxanne Cowan

Our average bonus is $1000 and is given at our fiscal year end.

Our calculation is based on financial performance of the company and adjusted for seniority.

Ann Adams Controller J. Stokes & Associates www.jstokes.com

10% of salary once a year more given for great performance - up to 20%

Natalie Gerngross

$2,100 annual.

Ed Miller

annually and typically they range from 5% to 8% based on performance which is decided by the department head.

Tracie

Our bonuses are quarterly and are bases on our net profits for each quarter. Staff productivity and overall performance are also taken into consideration.

Kristi Long Production Manager Blair Communications

We do not have a set rule and try to be unpredictable. We have given our staff an extra pay check as a bonus in the past. That seems to work well, it is a meaning amount, it is appropriate to the value of the position held and it takes away the subjectivity and unfairness that could be perceived. On a year that goals were not achieved we gave $100 gift certificates to flooz.com. We only give bonuses once a year unless something extraordinary occurs...that has not happened yet. We also try to communicate that bonuses are just that and not to be automatically expected but earned. We have discussed many things including merchandise, trips, etc, but cash seems to be the best.

Sonny Goodall

We have been in business for 3 1/2 yrs. Our average bonus is $800 and is given in early December.

Our calculation is based on financial performance of the company and adjusted for seniority AND the individual's attitude and effort toward effective teamwork.

Additionally, we distribute gift certificates (usually to a restaurant - average $50) for "project" work above and beyond the call of duty. The certificate is accompanied by a note from the Boss - a cross between a thank you and an incentive to continue the good work.

Rey Scott

I attended a very useful APDF seminar on human resources a few months ago. Bonus varies depending on the entire compensation package - comprising both cash and non-cash benefits. These are some of the numbers that were discussed (I actually thought the percentages were high):

Cash incentives . Profit pool can be accumulated to reward the company as a whole (5%) . Management may be offered a higher incentive (10%) . Sr. designers and Project managers that bring in profitable projects may be rewarded at another percentage (15%) . Owner = 20-30% . An incentive program needs to review profitability monthly; necessitating an open policy for managing the company and offered company-wide (not discretionary) . Or you can institute a bonus pool for everyone to benefit from if the company meets its targets (25%)

Some suggested reading recommended by Ms. Jorgensen: Jack Stacks, Great Game of Business Bob Nelson, 1001 Ways to Reward Employees K. Jorgensen, Pay for Results

Ann Enkoji Ph.D

Wow! Good information. Thanks. (% are higher than I would have expected too.)

Roxanne Cowan

Is there a place where I can reference information on general salary ranges paid to Production Managers & Controllers for Graphic Design Firms, in the So. California area.

Thank you.

Karen Cupp Controller www.p11.com

We have found www.salary.com to be very useful.

Ronn Anacabe KPS|3 Advertising www.kps3.com