1

Let me tell you the scenario-

Few months ago I have started a business in Software Development sector and we are working good. We are getting jobs and earning well. Actually, my team members was my colleagues in two different Software Development firm. They are working with me right now. We are 8 person. We decided that we are going to start work as commission based. Commission as follows-

  1. 35% who getting job
  2. 65% who developing the software

35% is really safe zone. But, 65% is really tough zone. Because, we are sharing our skills and doing jobs together. Problem facing when we are distributing the 65% to multiple developers. Actually, I am working as a project manager. I am distributing the projects to the team members. Sometimes, I swapping the task to different team members. I am struggling to distribute the amount to the developers who are working/developing. Someone is being happy someone is being sad. Sad person thinking the distribution is wrong. He should get more amount for his development.

Now, My question is- How can I face this kind of situation?

4

This is a disaster waiting to happen. I am willing to bet the entire 65% that someone on the team will perceive the distribution as unfair, and furthermore that very quickly people will start adjusting their work based on the perceived unfairness. I suggest that you dispense with this notion immediately.

If you must divide the 65% among a team of developers, I would suggest two alternatives:

  1. Everyone gets an equal share. Everyone's success depends on everyone's effort.

  2. Everyone gets two equal shares - one they keep, and the other they anonymously donate to whomever they think was the most important developer.

If you allocate the tasks and the bonuses, you are going to be the center of a lot of discontent. I wouldn't take that job no matter how much you paid me.

  • Yep, our answers are just about exactly the same. I don't really see much of a debate here. – David Espina Apr 25 '14 at 12:23
  • Actually, I thought we can earn more than the regular job (salary based). And we are earning well. I liked your 2nd alternatives. Can I divide this in three different levels? Junior, Mid and Senior and each levels has a fixed percentage on the basis of 100%. – Khan Apr 25 '14 at 12:28
  • Absolutely - believe it or not, this is a variation of the standard contract for privateers during the age of piracy. – Mark C. Wallace Apr 25 '14 at 12:32
1

This is actually quite easy to solve. It is based on the concept of a high performing team. A team is one that has a collective sense of success and failure and is one where all aspects of the team--e.g., the team roles, skills, tasks--are considered essential and weighted equally. A weak link in any aspect means weak team.

Therefore, distribute the commission equally. If the team balks at this, then you have a problem with your teaming. They are not yet a team.

If you want to recognize one or two for "above and beyond" efforts, like a bonus, withhold a piece to be distributed in that manner, but make sure you choose that above and beyond appropriately. In other words, it has to be truly above and beyond.

0

Distributing compensation and recognizing efforts are some of the difficult but necessary aspects of being a manager. I have yet to work anywhere where all employees at the same level were paid the same. Many factors go into a person's compensation: skill set, experience, working relationships inside and outside the firm, etc.

If you believe that some of your development staff are providing more valuable work than others, then stay with your current distribution. If you believe they all contribute equally, then distribute all compensation equally.

Employee turnover is part of the business world. Eventually someone will choose to leave, whether due to compensation issues or for other reasons. You could just as easily drive an employee away from your company by doing equal compensation distribution, as by doing unequal distribution. They may feel they are more valuable than someone else and should get more than that person.

Whichever route you choose to go -- either equal or unequal comp distribution -- be prepared to stick with your plan.

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