By Ben Schiller
Employee of the month and "spot award"-type bonuses leave it to managers to decide who's doing a good job. If they like a particular employee, lucky them; if not, tough luck. But with Bonus.ly, a peer-to-peer bonus scheme, employees get to decide who the top performers are.
It works like this: A team-leader goes to the site, signs up, and sets an overall budget. Bonus.ly recommends about $100 per employee, per month. The staff then reward each other in, say, $10 or $20 amounts. At the end of the month, the company settles the balances.
Bonus.ly founder Raphael Crawford-Marks argues that peer-to-peer is a better way to reward people in the knowledge economy, where responsibility tends to be more scattered than in traditional, hierarchical organizations. "Because of flatter teams, managers often aren't aware of what's going on in their teams," he says. "These other bonus paradigms don't do a very good job of giving a tight feedback loop--of rewarding in a timely and publicly manner when employees do something really well."
He believes that Bonus.ly is also a way for managers to keep a handle on team dynamics--who's valued and liked, and who doesn't get along with the rest. This sets up the possibility that friends will simply reward friends. But Crawford-Marks says transparency can keep that from happening. Every award is listed publicly in a Twitter-like feed, which discourages naked favoritism.
Bonus.ly's first client last year was a 78-person team at Oracle. Since then, about 40 companies have signed up, using a range of currencies. Nearly four-fifths of the Oracle employees have rewarded others so far, suggesting a solid level of engagement.
Of course, transparency around sensitive issues like pay can go too far, as this ridiculous new reality TV show demonstrates (it's called Does Someone Have To Go? and you should resist the urge to watch). But there's no reason managers should have all the fun: a bit of peer-love never did any harm.
Copyright 2013 by Fast Company. Reprinted with permission.