Most agencies do not have year-end bonuses, they have year-end entitlements. There is a way to fix that issue.
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Hey everybody. Drew McLellan here from Agency Management Institute, coming to you again from Orlando, Florida. You know, this is the time of year that a lot of very generous and good hearted agency owners, start writing bonus checks. But if your bonus check isn’t tied to company performance, or a budget or something, what it really becomes is a gift that you give every year between Thanksgiving and Christmas. And that’s where your employees view it. They view it as an entitlement. That, of course, it’s the end of the year, we had a decent year, I think. I may or may not know, depending on how transparent you are with the finances, but every year I get a check from the agency owner as a reward for sticking around for another year. That is not a good use of bonus. A bonus really should be paid out to your people when the company has performed well, has hit metrics that your people understand all year long, and help you hit. And also that they understand that bonuses are not a given, that they are tied to the company’s financial status, the reality of what’s happening in the agency, but most important, is tied to their performance throughout the year, and that they help you grow and build the business, or they don’t. And so, you’ve got to really think long and hard about how you handle bonuses. And my hope is, that if you’re still writing a check every year without rhyme or reason, without thinking about the bonus, that this is the last year that you do that, and you begin to think about a metrics-based or a performance-based bonus program for 2022. If you want to learn more about that, there are several articles, videos, and other things on our website that walk you through the AMI bonus program. There’s actually a podcast episode as well. So, there’s lots of ways for you to see a different way of thinking about bonuses in a way that’s going to motivate your team throughout the year and reward them appropriately for their hard work, but not just let it be an entitlement, okay? I’ll see you next week.