Bonus.ly Platform Lets Managers Put Employee Rewards Up for Voting

8/22/13Follow @jpruth

For bosses who hate poring over performance ratings to decide just how much of a bonus each employee deserves, a startup in Brooklyn has created a Web app that can put part of the task in the hands of the staff. The nitty-gritty of telling workers which skills they need to improve may always reside with supervisors and managers, but figuring out how large a boon they ultimately earn though can be a communal affair through Bonus.ly.

At companies that use Bonus.ly, each employee gets a monthly allowance of the designated “currency” to award to their colleagues. Managers and administrators can also refer to the platform for quarterly staff reviews for a better understanding of how their employees are performing. “You can see who is getting the most bonuses for innovation, teamwork, or customer service,” says Bonus.ly co-founder Raphael Crawford-Marks.

Bosses and managers set budgets for bonuses on the platform, which gives each worker specific leeway to reward their colleagues’ efforts. The benefits can be extra cash as well as internal rewards used within the business such as credits to shop at the company’s e-tailing site or mileage points for airlines. The currency can also be points that have some other company-specific value. Management can still control primary salary increases and other perks outside of the platform; Bonus.ly is more of an adjunct to traditional methods.

The platform runs openly within organizations to deter attempts to spoof the system, says co-founder Raphael Crawford-Marks. Whenever someone awards currency to another employee, it is displayed on the platform to everyone within the organization. It lets managers keep track of suspicious activity such as certain employees giving perks to the same people over and over without supported reasons. “Transparency is an extremely powerful tool for limiting corruption,” he says.

In addition to the bonuses being readily seen, the platform uses an algorithm that performs a statistical analysis of the activity between users over the prior 90 days. If that activity is significantly higher than normal, the employee giving out the bonus will see a message alert suggesting they not focus on one person. The warning can be ignored and if the employee still gives the questionable bonus, it will be flagged for review by an administrator. “If there is a small group of users colluding to give each other bonuses it is going to be hard to hide that activity from the company,” Crawford-Marks says.

The intent, he says, is to draw upon the knowledge of workers who see the exceptional efforts of their colleagues. Bosses still set the rules on when and how the bonuses are disbursed.

Businesses such as call centers where employees largely work independently might not be a fit for Bonus.ly, says Crawford-Marks. The system can be used for teams and divisions within businesses as well as company-wide (thought that might prove a bit challenging at big enterprises). Businesses with as few as six employees to more than 400 use Bonus.ly, he says.

The idea for Bonus.ly, Crawford-Marks says, emerged from a bottleneck that co-founder John Quinn saw in the process of determining employee bonuses. (In addition to launching Bonus.ly, Quinn is currently senior vice president of engineering and product strategy at Gilt Groupe and former vice president of engineering at Digg.) As more people came under Quinn’s supervision, Crawford-Marks says, it became increasingly difficult to keep track of who was going beyond the call of duty. Somebody knew—it just wasn’t him. “The real knowledge about who was doing what and who was kicking ass rested in his team,” says Crawford-Marks.

Companies such as Google and Linden Lab have dabbled in one-off peer recognition programs, he says, but until now there was no static platform that business could use to fill this role. The platform debuted last November and the roster of businesses that actively use Bonus.ly is approaching 50, Crawford-Marks says.

Bonus.ly is bootstrapped and Crawford-Marks says he and Quinn are reluctant to bring in investors. Both being software engineers by trade, they worked on the platform themselves. “We leveraged a lot of low-cost technology and a lot of automation to multiply the effect that we can have in development and customer service,” Crawford-Marks says.

The company wants to create more platforms to simplify and democratize other administrative tasks, freeing up managers to focus on leadership and setting strategies to increase productivity. “Technology is enabling organizational structures to be much flatter,” Crawford-Marks says. “It’s a shift away from a manager who dictates every daily thing that happens.”

João-Pierre S. Ruth is the editor of Xconomy New York. He can be reached at jpruth@xconomy.com and followed on Twitter @jpruth. Follow @jpruth

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