The company, a globally active medium-sized group of companies with around 2,500 employees in the automotive supply industry, was to receive a bonus system for senior management. The development and implementation was the responsibility of the current HR interim manager, who fulfilled the described task as a permanent HR director.
The working methods and organization of the economically successful group of companies were characterized by strong national subsidiaries. The company's strategic planning envisaged further internationalization and centralization. This also included creating a globally standardized variable remuneration component (bonus) for the management team (level below the company management).
The HR manager first defined the specific requirements:
- Increased motivation
- Significant improvement in cooperation between all areas
- Compliance with corporate planning
- Motivation for challenging annual planning
- Securing market-oriented remuneration
- Scalability of the bonus system for other organizational levels.
The variable remuneration system needed to meet these requirements in a simple, comprehensible and cost-efficient way.
In collaboration with the finance department, the HR director developed a model for the remuneration system. Individual managers were already involved in the design phase. Thanks to the broad basis, a bonus system was created that is accepted by the managers - and at the same time is based on economic indicators that take the company's goals into account.
Bonus system successfully expanded
After approval, the bonus system was introduced worldwide. The managers were informed personally. They now receive a bonus once a year in addition to their basic salary. The calculation is based on an annual written target agreement between the manager and their supervisor. This agreement covers economic and individual targets. The economic targets are divided into Group targets and targets for the individual companies. These in turn include a strategic long-term target, a comparison with this long-term target and a comparison with the financial year plan and the financial year result. The individual targets can be of a very different nature. The number has been limited.
The bonus system has been stable for several years. It enjoys a high level of acceptance and the desired effects have been achieved. The variable remuneration components were also introduced for other employee groups - based on the bonus system for managers.
