In 1985, I decided to stay at school and take some classes instead of going home for the summer. I took a job at store that sold textbooks that I ended up hating, quit pretty quickly, and then took a job waiting tables and tending bar in a local greasy spoon called Muther’s Cafe. I didn’t get a lot of hours on my schedule, and the pay was low, so I had to survive on tips. I learned pretty quickly that just doing what was expected by my customers, mostly cheap college students, was not going to get me more than enough for some cheap beer after work, so I followed the example set for me by coworkers who reaped the generosity of their customers. I took their orders accurately, checked on them a couple times while they waited for their meals, made sure they were happy with everything, and took care of any problems that might have come up quickly, whether they were my mistakes, the cooks’, or the customers’. That extra effort soon paid off. Tips grew bigger and I had my beer money for the week.
Employers pay their workers wages or salaries to perform at a certain level of competency, and if you do what is expected but no more, that is all you should get. That is pretty much true, whether you work in the business sector, government, or the nonprofit sector. In my opinion, employers should pay fairly but should not reward mediocrity or failure, although some big businesses seem to do that, according to reports in the media, and that is something for stockholders to change.
However, smart managers who want more out of their employees provide incentives to encourage them to produce more or be innovative so the company will be more effective and profitable. These incentives can be very good for the company and the employee.
Many do not realize bonuses can be available in the nonprofit sector, but if you want one, it takes some planning and negotiation early on. The AFP Code of Ethical Principles and Standards states “Members may accept performance-based compensation, such as bonuses, provided such bonuses are in accord with prevailing practices within the members’ own organizations and are not based on a percentage of contributions.” The AFP understands that bonuses can be effective motivators, so it allows them, but it wants to ensure that they are in line with the ethical standards of the organization.
The following conditions are taken from the AFP Code of Ethical Principles and Guidelines (long version), and will give you and your Board guidance when discussing the bonus plan.
“Members may accept performance-based compensation under the following conditions: