by Mike Daniell0
Should Interims Be Offered Incentives On Top Of Their Daily Rate?
In a recent Alium Asks website poll of over 100 people, we asked: Do you think interims should be offered further incentives/bonuses on top of their daily rate? Reviewing the results, Mike Daniell explains why he believes the answer is no.
The topic of additional incentives or bonus payments is a contentious one in the interim world. The website poll we ran revealed that 77% of respondents believed that interims should be offered further payment on top of their daily rates, with the remaining 23% not in favour of such schemes. Having worked in interim management and recruitment for over 15 years, I am very much in agreement with the minority here – and there are several reasons why.
3 Reasons Why Interims Should Not Get Bonuses
Firstly, regardless of any stats, I think it is important to be clear that these type of payments happen very rarely. I can only think of two business instances where it might be appropriate and that is if you are in a start-up or private equity funded situation. Quite often, individual funders or private backers are keen to minimise up-front costs and therefore are prepared to offer back-end incentives in order to maximise a strong return. Outside of this, I believe there is a limited business case for interims asking for further payment or bonuses, primarily because of the following factors:
- Measurement – it is harder in an Interim assignment to state what a bonus payment would be measured against. Completing the assignment successfully is already a given. KPIs, objectives and deliverables? The client will expect you to deliver these and go “above and beyond” anyway. In addition, circumstances change and an assignment is rarely the same at the end as it was at the beginning, so this presents a challenge in itself.
- Quantify – linked to this is quantifying the amount of bonus or incentive. How to determine a %, what is this based upon? Company bonus payments to permanent staff are usually annual and quantified on corporate performance. To me, this somewhat goes against the nature of interim. The corporate performance will undoubtedly be improved by the work of an Interim, but this is the essence of why you are working there, not a factor in determining bonus.
- Transparency – the beauty of the “all-in” daily rate is the transparency of it. The client understands immediately the size of their investment in you and you come with no hidden extras or costs. This gives assurance and confidence and will not “muddy the waters” like a bonus or incentive may do. Much better that a healthy day rate is negotiated up front, so both client and Interim Manager are happy and clear about the cost/reward of the given task.
I have also heard of “completion bonuses” – an incentive you only get at the end of your assignment. As a professional interim, completion is de facto – having this sort of bonus I think puts a question or doubt on your ability to deliver the role and to stay the course. To walk early is seriously damaging to reputation…… all Interims I know complete the task.
But what if you feel you are not being fairly rewarded for the amount of work you are doing in a role? If the daily rate you agreed does not reflect the volume of work you are doing or you workload increases dramatically? Here, I feel it is appropriate to negotiate a daily rate uplift, either through the provider you are working with or directly with the company. Neither you or your interim rate should be exploited.
There is however one situation where a bonus may be appropriate – if the client decides to pay it. Perhaps the company feels like you over achieved and over delivered? Maybe it was a much longer assignment than initially outlined and the client wants to acknowledge this. Whatever the situation, a bonus or incentive is acceptable…but only at the client’s discretion.
What is your opinion on bonus payments or further incentives for interims? Do you agree with the thoughts above? Share your comments in the box below…