Leadership team serves lunch at Kruger Products’ annual summer barbecue. The firm pays its bonuses just before RRSP contribution time, says Lucie Martin, corporate director of talent management.
Of the 95 top-ranked employers in the Greater Toronto Area, more than 20 have something in common: they offer bonuses to all of their employees.
In almost all cases, they are tied to performance. The difference is that these companies give opportunities for all employees to get bonuses, not just the veterans, or the managers.
In building the GTA's top companies list, Mediacorp asked firms whether bonus programs were available to all employees or only to some. "Of course these may be performance-based or of the traditional year-end variety," editor Richard Yerema said. "Our primary concern is that all employees have the opportunity to receive such."
The challenge is in setting up a system that establishes competencies for each employee. How do you measure the work of a legal administrative assistant against a lawyer's in an objective way?
McCarthy Tétrault, a legal firm and one of 25 companies that are new to the top-employer list this year, used to offer a more traditional, seniority-based bonus at the end of the year, near Christmas. The company has now moved toward a more performance-based model, which takes into account individual and company performance.
A veteran legal administrative assistant might ask, "What do you mean, what are my objectives? Whatever work the lawyer asks me to do, I do on a daily basis."
Paul Boniferro, national leader of people and practices for McCarthy Tétrault, explains, "We just ask them to think a little outside the box and push the envelope a little bit. For us, everything is client-focused. So how could you help this particular lawyer in increasing client service? How could you assist in the management of his or her timetable?"
The supervisor or director of each division sets objectives with each employee at the beginning of the year. The employee is rated against these objectives and against their colleagues.
The bonus structure tends to define job description, and employees get feedback and recognition. Only a very small minority fails to get the bonus; they'd be the group whose performance was very poor, Mr. Boniferro said. "As a firm, we have to be accountable, not only to our clients, but to each other."
Mr. Boniferro said in the past, everybody shared in the success of the company but that system did not reward star performers. He had an assistant at the top of the pay scale and seniority list who had little incentive to go "the extra mile" but did, "just to please me," he said.
There had been "no stretch goals," Mr. Boniferro said. The bonus-tied-to-performance plan also engages employees, he said. "It's human nature to strive for goals you have set yourself," he said.
Kruger Products Ltd., which makes tissue, paper towel and other paper products, pays its bonuses just before RRSP contribution time, says Lucie Martin, corporate director of talent management.
"The timing is right," Ms. Martin said. "Because it's at RRSP time, people can put the money right in there."
The company takes into account the meeting of objectives on three levels: individual, team and company. Individual and team goals are aligned with company goals.
If the company does not meet its targets, employees are still able to collect a bonus if they have met their targets. In a good year, employees can double their base bonus, which varies according to their position. "You try not to count it as part of your salary, but people do," Ms. Martin said. "It comes out during the winter and everybody wants to go south."
"We took away what was previously discretionary and made it something more specific and measurable," Ms. Martin said. "People are motivated. ... Really, people get along and they do work together and it's evident."
Kelly Wilson, a national credit manager for Kruger, says she likes the idea that all employees can benefit from the bonus system. "I think the people respond well when they feel they are part of the ownership and the results," she said. "I feel that it's been implemented very well.It's very positive. It encourages everybody to be committed and contribute to the overall results of the company."
The first benefit is that the leadership team communicates well with the employees, Ms. Wilson said. "They tell you their objectives and their goals for the upcoming year and from there, department goals and individual goals are set. All employees are involved in setting the goals. No one is setting them for you."
The objectives are challenging, but they are realistic, measurable and attainable, Ms. Wilson said. If the company does not have a good year, individual employees can still make a 10 per cent bonus if they have met their objectives.
"Good companies retain good people," Ms. Wilson said. "There is very little turnover here."
Nancy Lupi, vice-president of human resources for Fidelity Investments Canada ULC, said everyone in the portfolio management firm is entitled to earn a percentage of their salary as a bonus. But because the company aims to create a "meritocracy," the bonuses are tied to performance.
"What really matters is that you're contributing to the firm," she said. "If we were just to pay base salary, there is really not a huge motivation for anyone to give us their extra effort."
Standing apart from the crowd is Diamond & Schmitt Architects Inc., a company that rewards teamwork in its year-end bonuses. These bonuses are somewhat tied to seniority, and not explicitly to performance. "It's just the way our industry works," said company principal Martin Davidson. "We work on a team basis. In all of our projects we are working collaboratively."
Another one of the firm's principals, Gary McCluskie, said: "If it's tied to profitability, then we're going to have staff say: 'Well I don't want to work on that project because that's going to be a tough project to be profitable on.' It took us two meetings to decide that this was not how our culture had evolved into such a strong environment, so we backed off on that."
Diamond & Schmitt's bonus may be defined differently than other companies', but it's more appropriate to an architectural firm, he said. The company's principals see the bonus as a "thank you across the board" for work done during the year.
RSA Group of insurance companies also offers bonuses for all, and like many of the others, other interesting perks, including a profit-sharing and share-purchase plan.