The Bonus Round
The old adage of spending money to make money certainly rings true in the printing industry.Many companies in the industry find that nothing gives an employee a little push to succeed, and in turn a boost in revenues, then forking over a cash bonus, an all-expense paid trip to somewhere sunny or another type of pat on the back.
Cleveland-based Proforma has offered such incentives to its high sellers for more than a decade, said company founder and co-CEO Greg Muzzillo.
Not only does Proforma offer its owners a competitive fee structure that enables them to retain up to 80 percent of their gross profits, its owners also have the opportunity to join the company's Million and Multi-Million Dollar Clubs.
The Million Dollar Club, which was established in 1990, recognizes owners who achieve annual sales of $1 million or more in a calendar year. A dozen years later, the Multi-Million Dollar Club was formed to recognize those owners who have generated $2 million or more in sales during a calendar year. High-selling earns owners the reward of a luxurious vacation for themselves and one guest each. The company picks up the tab for hotel accommodations, food and air travel.
Recently, those honored traveled to the Bahamas, St. Thomas, Puerto Vallarta and Palm Springs. Next year, the attendees will be off to Atlantis in the Bahamas to celebrate a year of success.
And, Proforma's sellers certainly take advantage of the opportunity. Currently, there are more than 100 members in the Million Dollar Club and more than 25 members in the Multi-Million Dollar Club. Do the math. That means these sellers are generating between $2 million and $15 million in sales a year, Muzzillo emphasized.
He pointed out that each year the trips prove to be more and more successful. For example, Muzzillo said, on the 2007 trip to Palm Springs, more than 100 owners, guests and special partners were in attendance. There were 150 people in attendance at the Million Dollar Club Trip to St. Thomas in 2008. And, this year, more than 200 people celebrated in Puerto Vallarta.
"We are looking forward to having the largest attendance at our 2010 trip to the Atlantis," Muzzillo announced.
Hunt Valley, Maryland-based WebbMason, also entices employees with little extras. WebbMason has a formal compensation program consisting of basic compensation, commissions, bonuses and employer provided benefits, explained Doug Traxler, executive vice president of marketing and sales. Each fall, the program is reviewed and guidelines are set for the coming fiscal year.
He stated all sales personnel are on an established commission schedule based on revenue and profitability. The company's client support coordinators (CSC) also are eligible for a commission after they reach certain levels of experience and proficiency. The commission level increases as the CSC is promoted to a higher level of responsibility.
"About 70 percent of our CSCs are eligible for commissions," Traxler added. "We implemented this commission program several years ago when we recognized the tremendous amount of direct contact our more senior CSCs had with our customers and the impact they could have on enhancing customer service. The commissions received each year can range from a few hundred dollars up to $15,000 or more."
In addition, WebbMason offers two distinct bonus programs to encourage and reward exceptional performance from its employees. With the exception of senior staff, all non-commission employees are eligible for an annual bonus if the company meets its revenue goal for the year. For the average employee, this is equal to approximately 5 percent of annual salary, Traxler reported.
Its bonus program for management staff is based on the employee's salary and his or her impact on the success of the organization. These bonuses are awarded if the employee meets his or her individual goals and the company meets its revenue and profitability goals. Traxler added bonuses usually are paid after mid-year financial statements are reviewed and again after the end of the fiscal year.
"This program gets employees involved in cost containment to help impact the bottom line and keeps everyone focused on revenues and customer support," he said.
But that's not all. WebbMason also offers an Extreme Customer Service Award that is given to recognized non-management employees on a quarterly basis.
"Employees are nominated by managers or other employees when an employee has performed an act of customer service that is far and away above what is expected," Traxler said. "The employee can receive an award of $100 to $500 for each award."
Now in its second year, Traxler continued, this program replaced a previous award program that was based on increased sales revenue. This program focuses on customer support.
"It is proving to be quite successful and gives us the opportunity to share with others the great comments our customers (internal as well as external) have to say about our employees and their exceptional customer service. An employee [who] is nominated for this award and meets the established performance criteria is sent an e-mail recognizing his or her efforts. At the end of the quarter, the employee is recognized in a bulletin to the entire company and receives his or her bonus."
Though it seems like bonuses can put employers and employees in a win-win situation, some companies may continue to ask themselves whether incentives such as a pricey, all-expense paid trip is really worth the investment.
"No, the costs do not outweigh the benefits," Muzzillo said. "Rather, the benefits drastically outweigh the costs. Proforma has the most million dollar producers in the industry because we have developed a program to motivate and reward our owners for their success, in addition to providing them with the tools and resources they need to grow."
Furthermore, the program gives owners the opportunity to network, Muzzillo said.
"Our vendor partners are also invited to attend, giving the owners access to a wealth of idea generating avenues," he explained. "Our Million Dollar trips allow us to both recognize our owners for the success they already have had, while helping them cultivate relationships to continue the success into the future."
Owners who participate in the Million Dollar and Multi-Million Dollar clubs also receive special recognition at company events, and they have access to exclusive sessions at Proforma's convention and family reunion.
And, though many companies are scaling back their workforce and looking for any way to save pennies during this rough-and-tumble economy, Muzzillo doesn't see Proforma downsizing its incentive programs.
"Our Million Dollar Club trip has become tradition within our distributorship," he emphasized. "It greatly impacts our sales and shows our owners how much we value their hard work and dedication to their businesses. I do not foresee any budget cuts to this program because these owners truly deserve to be recognized and rewarded for their efforts."