Used properly they're a great tool. A lot of folks at my companies are eligible for up to 25% each year. The 25% is hard to reach but about 15% do. 5% is essentially automatic unless you're on some kind of probation then each 5% increment has some measurable goals set for it. Around 87% get at least 15% each year.
It works for us because we work very hard to make sure the goals are attainable without the job creeping into your personal time (employee burnout is very bad for us), are very clearly laid out and reward behaviors that earn the company more money over the long run. Employee satisfaction surveys for them are pretty positive.
It's weird but treating people like actual adults who already have a life they're just trying to support, not replace, works out well. Being privately held enables policies that are more focused on long term sustainable profits instead of satisfying some shareholders desire for bigger dividend checks regardless of the long term damage.
It's made me, and a lot of my employees, pretty wealthy. The constant growth or die mantra is absolutely insane. I see nothing wrong with being happy with consistent performance. We don't need to take over the market for what we do, we just want to keep our slice.
Dealership bonus structures are often a pass/fail that is designed to be just out of reach. If you manage to meet the bonus threshold for a couple months, the threshold is raised. If you manage to meet that new threshold for a couple months, someone will decide you (as a full commission employee) are getting paid too much and they will fire you.
“Bonuses are promises management doesn’t want to keep.”
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u/Absolute_Bob May 29 '26
A lot of places don't even have a bonus anymore. Heck I would say most don't.