I am curious when you hear the term quarterly bonus, how do you think that would be calculated for payout?

Anonymous

January 10,2024 at 2:00PM UTC

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I am curious when you hear the term quarterly bonus, how do you think that would be calculated for payout?

Your payout would be based on the numbers for each quarter being budgeted against the actual numbers in that quarter

Your payout would be based on the numbers for the quarter against the YTD running total rather than the quarter total.

Ex. you make the Q1, you miss Q2, you make Q3 but because you didn't make it cumulatively you get no payout. However, you do get a thank you for exceeding Q3 numbers.

Curious to hear your input, thank you.

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AnonymousJanuary 10,2024 at 2:05PM UTC
This hurts my head. Too much mathing early in the morning! One and done annual bonus, prorated for start date if necessary, would be the best option.
AnonymousJanuary 10,2024 at 3:32PM UTC
I agree, also hurts my brain! Make a decision on the bonus algorithm and distribute to your team. Too many mental gymnastics.
Susan MitchellJanuary 10,2024 at 11:45PM UTC
Couldn't agree more and thank you!
AnonymousJanuary 10,2024 at 2:22PM UTC
Ask your specific organization, all aren't created equal.
AnonymousJanuary 10,2024 at 2:53PM UTC
Usually, a quarterly bonus is paid out after the quarter ends. I have no idea what calculation you were using but it was confusing and did not make a lot of sense. Usually, if you make the plan for Q1, you get a bonus in Q2 for the Q1 results, and so on. You could potentially bonus four times a year. If you miss the Quarter, you do not bonus for that Quarter. The calculation you mentioned above is a year-to-date bonus calculation, which factors in your cumulative plan results, not quarterly results.
AnonymousJanuary 10,2024 at 3:01PM UTC
This calcuation and plan should be formally developed and a written document on the rules so you know how it's calculated.
AnonymousJanuary 10,2024 at 5:13PM UTC
My assumption would be the first one. Each quarter has its expectations, which are calculated separately. The second example sounds like a yearly or YTD bonus paid out quarterly. Either way, it should be spelled out in your compensation plan. This assumes that your bonus is based on personal revenue generation and not on some corporate calculation based on how the entire company or group met revenue expectations. If it is a discretionary bonus, then it's just that: Discretionary.
Susan MitchellJanuary 10,2024 at 11:44PM UTC
Thank you
Jennifer AndersonJanuary 10,2024 at 6:31PM UTC
My father was in sales and he had both of the calculations you mentioned. Heck he even had both calculations at the same company when an executive change was made.
Another respondent replied perfectly. The calculation, whatever it is, should be documented and presented. If you are interviewing then ask for the calculation during the process and make your decisions accordingly.
Good Luck!
Susan MitchellJanuary 10,2024 at 11:44PM UTC
Thank you
AnonymousJanuary 10,2024 at 7:23PM UTC
I've experienced it both ways but agree with others, either way, it should be clearly communicated. The last time was with a much smaller company and there was often catch-up in Q4.
Susan MitchellJanuary 10,2024 at 11:44PM UTC
Thank you