Question: "We want to replace our current bonus system with a new, improved version. Any suggestions on how to phase in the new bonus without missing a beat?"

Answer: "We have a monthly bonus plan, which has been in place as long as I've been here. It used to be based on our profitability percentage each month -- the bottom line. Now it's based on our premium growth. During the transition,we blended the two systems.

"Basically, we figured out what individual monthly bonuses would have been under the old system and gave people 50% of that amount. Then we set our monthly premium growth goal, determined what the bonus would be if we were paying it entirely on that basis, and gave employees 50% of that amount. It took some thinking, but the transition went pretty smoothly.

"We'd been paying out on profitability for many years, and we decided that we just had to start looking at other numbers. To grow the company in the way we wanted to grow it, we had to start focusing on top-line revenue. Sofar, so good. People have shifted their focus." --Tina Comstock, former FinanceTeam Coach, RTW Inc., in Minneapolis

Copyright 1998 Open-Book Management Inc.