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.
Not convinced by this. It's better than management giving out bonuses, but I wonder how they combat people giving it to their friends?
we have been using bonus.ly for the past few months and haven't seen the problem of employees "gaming" the system (i.e. giving bonuses to their friends). we have seen an increased motivation and morale boost. the application frequently used to appreciate co-workers. the interface is simple and the functionality is powerful.
Thanks for the feedback. How are you measuring the impact of bonus.ly?
multiple ways
1. bonus.ly provides reports as per how many bonuses (aka recognition's) are given out. i review these frequently and notice that every month more/more bonuses have been given by employees. these are recognition's that wouldn't have happened without a system like bonus.ly
2. i have also noticed that when managers who need to recognition their team members outside of bonus.ly (e.g. for promotions, annual reviews, etc.) they now quote and include bonus.ly peer comments.
3. bonus.ly also provide a insights for managers based on certain core values – customer focus, innovation, etc. which of the team members are getting bonuses based on these core values. these insights we would have never seen without a tool like this.
Certainly an interesting idea. I'd like to see it in use at a few companies before passing judgement I think.