How Being Cheap Hurts Firm Morale: Do Bonuses Work?

By Allan Boress, CPA - One reason we are the fastest growing firm in our geographic area, is that we are generous with our finances and our time with clients and staff. Can money work to improve morale in your firm?

It is the accountant mentality of throwing every possible penny to the bottom line that has left the American carmakers on the brink of bankruptcy, and Toyota becoming #1 worldwide. Only an accountant would come up with the idea to squeeze every ounce of profit out of every vehicle, whereas the folks at Toyota squeeze every ounce of value out of every dollar the customer spends.

Peter Drucker, considered one of the greatest management consultants of all time, said it was the cost accountant that ruined the manufacturing industry in the US.

US Air is a case in point. As a professional speaker on marketing and sales topics to the professions, I traveled constantly for 20 years, many times 5 or 6 cities in a week. US Air was one of my least favorite airlines. Their planes were dirty, the stewards and employees surly. As with most airlines except Southwest, they appeared to come and go when they pleased without consideration to the passenger (the paying customer).

However! This past week the Wall Street Journal ran an article on how US Air has turned around their culture and vaulted from being dead last in on-time arrivals and departures up to #2. How? By being generous with cash bonuses and paying attention to customer feedback about employees, and bonusing those with the highest scores. They also set group goals: every airport’s personnel get bonused monthly if their arrivals and departures are within specifically defined norms. Quarterly, they divide up a large pool of money amongst a handful of winners.

Customers are now raving about their service and clean airplanes. They’ve created an internal excitement around cash bonuses, certainly needed by every employee in any business at this time.

Does this work for CPA firms? It has for some of my clients and a handful of others I have run into over the years. We have used it in our firm extensively.

Problems with using MONEY for motivation are:

1. The bonus program is resentfully rolled out (as it costs MONEY) from the partners’ POCKETS
2. It is poorly thought out (10% of first year collections for new clients? You gotta be kidding). Rarely are the people to be motivated consulted as to what they think they program should look like, therefore no “buy in.”
3. It is looked upon as a standalone cure for all the other morale problems in the firm, stemming from the work environment, such as the way staff are treated by partners and clients, lack of quality training, poor working conditions, yada yada.

I remember a thirty-ish mom we had working as a senior manager in a firm I was once managing partner of in south Florida. When elected MP, my partners informed me that “Clara” was now my problem. She was almost impossible to work with, had a bad attitude, and was recruiting other staff into some network marketing program so they could make enough money outside of work to all quit the firm! She also walked around without shoes on (this is way before casual workplaces; we wore suits every day).

Now what?

Well, to anyone – except an accountant or engineer – there were personal issues that needed to be addressed with Clara. (I find CPAs amazingly oblivious most of the time as to what is going on with the people who work for and with them.) Although Clara worked hard, nobody ever said thanks. She did things beyond her job description, but nobody noticed. I started taking her to lunch and got her involved in the day-to-day management of the firm, besides constantly praising her work and making her feel important.

And – I used bonus money as motivation. We instituted a client bonus contest wherein anyone receiving an unsolicited positive comment from a client about a staff person directed to me or anyone else, would receive a $50 bonus (equal to $100 in today’s dollars).

The first month, Clara had 3 positive comments, won $150 and the check was presented at the weekly staff meeting in front of everyone. We kept a list of winners prominently displayed in the coffee room, and her name was first. She was shocked, as well as all the other staff as she was well-known for her poor attitude.

Of course, there were no positive comments the first week; I made it up and invested $150 of the firm’s MONEY in Clara.

Second week, she won another $100 and finished first again (all made up).

The third week she won $200 all on her own.

After spending some quality time with her, mentoring her, making her feel important, Clara went from being the worst employee to our best – and she even started wearing shoes in the office without being asked. And MONEY was a part of it.

US Air has proven MONEY works as a motivator, as have we in our own firm. Is your firm too cheap to invest in morale?

By Allan Boress, CPA – author of The I-Hate-Selling Book, available at amazon.com and barnesandnoble.com

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by Allan Boress, CPA - Based on over 25 years being a practitioner and consultant to the profession. Mr. Boress is the author of 12 published books in 6 different languages, including a best-seller, The "I-Hate-Selling" Book.

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