My New Bonus is Tied to Integrity? Thank You, and Thank God For The Sales Team

Kris Dunn Compensation/Cash Money, CYA Report, Leadership, Performance 1 Comment

Let’s get this out of the way first – I’m a BIG FAN OF INTEGRITY in the business world.

I love people who have integrity, I’m just enough of an expert to know you can’t effectively measure integrity in the business world.

That’s why I know that any company attempting to compensate people on the concept of integrity is:

  • A) Virtue Signaling like a MF, and
  • B) Fat enough to view the money spent on integrity compensation as a PR campaign designed to make them look kindler, gentler, and yeah – better than you.

Why is this is topic at the start of 2021? Microsoft is tying 2021 bonuses to some employees based on whether they “generate and protect Microsoft trust by modeling integrity,” according to internal documents viewed by Business Insider, as the company works to establish itself as a leader in tech-industry ethics. (note: The article is behind paywall, so I’ve clipped some footnotes from it at the end of this post for your viewing.)

The new Microsoft bonus drive sets the expectation for all roles to “model integrity and ethical behaviors every day,” including adhering to completing mandatory compliance trainings, cooperating with audits, and being “proactive in identifying risks inherent to your role and escalate concerns,” according to a document viewed by Business Insider.

I’ve got a concern. This is weak sauce. Can we go back to the days of Microsoft when Steve Ballmer was pumping up the Redmond salesforce?

Check that: Here’s a look in from the vault of how Microsoft used to get people focused on results.

An easy answer to my objection is to call this something other than Integrity. Call it Risk Management, Compliance or the CYA Plan – anything but Integrity. But Microsoft is going with Integrity, so the rest of this post stands.

Let’s talk first about what you signal when you put bonus objectives together at your company.

Most of you are still trying to scrape together bonus objectives for your exempt-level people for 2021, and when push comes to shove, we all get a little bit lazy with this process.

All of this impacts your bonus-eligible employees, but it also impacts your recruiting efforts, because let’s face it, great talent you’re attempting to recruit in 2021 is going to want to know what their bonus is based on.

Here are your cliff notes on how candidates will react to what you tell them:

  • IF THE BONUS IS BASED ON REVENUE or EBITDA TARGETS: This is the “oh, shit” moment for candidates. We never have perfect information coming into a company, and candidates are scared to death of this measurement. After all, they’ve had a lifetime of impossible revenue and EBITDA targets.
  • IF THE BONUS IS BASED ON A MIX OF COMPANY TARGETS AND PERSONAL TARGETS: You’re getting warmer! That sounds like MBOs to your candidates! Those have always paid off for them, mainly because we’re shitty at tracking them and measuring good vs great work in any project area tied to their bonus! That means we pay a lot of it out!
  • IF THE BONUS IS PAID BASED 100% ON PERSONAL GOALS AND NOTHING ON COMPANY GOALS: Yes! You’ve liberated me from the nasty business of growing the company! Where do I sign?
  • IF PART OF THEIR PERSONAL GOAL IS TIED TO INTEGRITY: The young, inexperienced candidate thinks that is soooo cool – you’re in line with their personal value system. The older candidate? They are literally snickering as they return the offer letter.

Why is the older candidate snickering? Because they know that attempts to measure integrity as part of a bonus program are impossible to measure and will be paid out at 100%.

Don’t shoot the messenger. I’m just a student of the game. Let’s examine a couple of things that serve as realities related to “Integrity” as a performance measure in a bonus program, or even in a routine performance management system:

1–You don’t know there’s a problem with Integrity until it’s gone. Real talk, most of the people with average to high integrity look exactly the freaking same. That means you can’t separate the high integrity folks from the average integrity folks, and more importantly, you don’t know someone has an issue with integrity until — wait for it —- they’ve embezzled 250K from your company, been caught hacking into a teammate’s email or you’ve caught them red-handed in multiple lies, which are usually “he-said, she-said” affairs.

Captain Obvious Insert: Integrity is what you do when no one is watching. That’s what makes true integrity impossible to measure unless the cops (real blue or the corporate version) show up and handcuff a teammate.

2–It’s impossible, based on point #1, to measure good vs great Integrity in most employees. Imagine you’re in a performance review based on the Microsoft definition and you give an employee a “meets” on Integrity – because you haven’t had any problems, but they haven’t blown you away in this area either. That’s fair! The employee then asks what they can do to “exceed” in the Integrity section of the review and as you hear the question, you stare into the abyss of that person’s eyes.

Employee: What can I do to get an “Exceeds” on Integrity?

You: (shaken because there is no good answer) “Well, I’d love to see you whistleblow on someone or bring me a report of you refusing to play ball with some of the evil-doers who are running around this hellhole.”

Are you going to do that? HELL NO, you’re not going to do that. Integrity is impossible to rate related to good vs. great performance. That’s why we all give in if we have to rate it and simply call it “exceeds” or pay it out at 100%.

Giving in to the easier path here vs. what you should do is “low integrity” – which is ironic and hilarious all at the same time.

As Teddy KGB once said in Rounders, “Pay that man his money.

Microsoft is a great company. But make no mistake, its current position is the result of decades of monopoly power, and as those monopolies have been broken up, a Sales Team that is world class has kept the company in a dominant position.

Translation: The current position of Microsoft is built on decades of snapping necks and cashing checks. They’ve crushed hundreds, if not thousands of companies competitively, and while I’m sure they expect their sales team never to be in legal jeopardy with their day to day actions, they ARE expected to win.

I’m guessing 75% of a Sales Pro’s performance review at Microsoft is quota. Which means that if you don’t get results, you’re out. Even if you got your team through the compliance training and encouraged them to raise any concerns they had. LOL.

I’d compare the teams at Microsoft Corporate including Integrity as a bonus driver with the ancient Roman Senate tossing around big ideas in their robes.

While the Roman Senate was tossing around lofty ideas, there was a kid from the Roman countryside holding his shield, lined up in a phalanx, as the Roman army attacked Gaul. He’s trying not to get shanked and make it to the dinner of Swill and week-old donkey meat that will be served that night.

That kid, obviously, is parallel to today’s Sales Rep at Microsoft or any company. If you’re lucky enough to have Integrity as a Bonus Driver at your company, you’re a senator in this example, my friend. Treat your Sales Reps with the respect they deserve on the rare occasions you see them, because it’s kill or be killed for them.

They’ll be out there killing on your behalf while you toss around lofty ideas that can’t actually be measured.

Enjoy the 100% payout on your Integrity measure. I hope your openness to audits, compliance activities and an open door was recognized by all.

KD out.

—————————————————————————

Here’s some details of Microsoft’s move to Integrity for some Bonus Goals from the Business Insider “premium” article:

  • Microsoft structures its employee compensation plans such that workers receive incentives based on whether they achieve “core priorities.”
  • Some teams have introduced a core priority to award bonuses based on whether they “generate and protect Microsoft trust by modeling integrity,” according to internal documents viewed by Business Insider.
  • Leaders and people managers are further expected to “foster a healthy culture by recognizing employees for making ethical choices and encouraging them to speak up and share concerns.”
  • It’s unclear what prompted some teams to tie bonuses to integrity, but Microsoft generally tries to establish itself as a leader in tech-industry ethics.

Microsoft structures compensation so employees receive incentives based on whether they achieve “core priorities.” Core priorities are usually role-specific, and Microsoft measures whether an employee has achieved the role’s core priorities through “critical indicators of success.” 

A Microsoft spokesperson told Business Insider that integrity is one of the company’s core values, and something that all employees are expected to demonstrate. However, some teams at Microsoft have taken it a step further by emphasizing the concept in performance reviews, which the company said in some cases can include making it a core priority.

Other core priorities at Microsoft may be more product-focused, depending on the employee’s team and division.  One cloud-related role, for example, is awarded bonuses based on whether the individual helps Microsoft raise monthly active usage for its Teams chat app and “win against Zoom and WebEx for meetings,” according to a document viewed by Business Insider.

For the integrity-focused core priority, leaders and people managers are further expected to “foster a healthy culture by recognizing employees for making ethical choices and encouraging them to speak up and share concerns,” and to “be skeptical about unexpected deals and results and proactive in identifying risks inherent to your business and escalate concerns,” including being “ready to make a tough decision for untrustworthy partners/suppliers and high-risk transactions.”

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