Member Bonuses
What is the member bonus program?
MSPCFO supports a productivity bonus program based on attributed revenue earned by each engineer. All revenue generating time spent on client work as well as credit for internal technical time accrues to your employees as the attributed revenue they earn. With these revenue numbers, MSPs can set up a member bonus program to offer additional compensation when the member exceeds a target revenue during a month.
While MSPCFO provides the targets and productivity for such a program, we strongly suggest consulting with a coach or consultant before implementing any such program.
There is much more than analytics involved with any compensation plan.
The basic premise of the system is that an employee should be compensated for exceeding revenue targets. To allow this to happen, we need three pieces of information:
- Productivity
- Production Target
- Bonus for Exceeding Target
In the table you can enter both the Target and the Bonus percentage. You need to only enter information for an individual engineer in the initial month of the bonus program. MSPCFO assumes that each following month is the same as the prior month until there is another entry for the individual. One individual can have multiple records.
An option to adjust the attributed revenue for an engineer in a specific month is provided in the Adjustment section. This revenue adjustment, either positive or negative, will be added/subtracted to the member's monthly revenue production number. The adjustment will be used only in the month specified.
Once the bonuses are set up in the Payroll/Member Bonuses, the results each month can be viewed in the Member/Bonus report.
Setting up the parameters for an engineer's bonus
Setting up the bonus parameters is done by opening he Payroll tab and clicking on Member Bonuses.
The settings at the top provide the information needed for each member who will be in the bonus program:
1. Member - Select the member name from the pull down list of your engineers.
2. Date of Change - Select the month and year you want the bonus system to be initiated. An additional line is needed for each salary change for a member. Only the month the change occurs is needed.
3. Target Production - The amount of attributed monthly revenue that is targeted.
The number should be a whole number without any commas or designation for currency type (e.g. 15000)
4. Bonus % in Excess of Target - The percentage of bonus the member receives when the monthly Target Production is less than the attributed revenue for the month.
The number should not include % sign (e.g. 15 for 15%)
When 1-4 have been completed, click Create.
In the example above, Member 303 is added to the list of members with bonuses.
Once a row has been added, it can be edited or deleted from the list. When changes are made, the record should be saved.
The setup table for the Member/Bonus report is found in the Payroll/ Member Bonuses.
These reports are only available to Administrative users.
Examples
Example:
Engineer 248 receives a bonus for any productivity beyond $15,000 starting in January 2024
Select Member: 248
Date of Change:2024-01
Target Production: $15,000
Bonus: 15%
This will drive a bonus for Member 248 in any month after January 2024 that more than $15,000 is produced. If Member 248 were to produce $17,500 in February, then the bonus would be $375 = ($17,500 - $15,000) * 15%
Engineer 265 receives a bonus for any productivity beyond $20,000 starting in March 2024.
Select Member: 265
Date of Change: 2024-03
Target Production: $20,000
Bonus: 15%
Engineer 265 only started working a full month of March, 2024. The bonus is produced after the member's attributed revenue is recognized in the PSA.
Values in this table can be used in the Member/Bonus report immediately. No recalculation is needed.
Adjustments
Open the down arrow to the right of the Adjustments title.
The bottom of the table allows the addition of an adjustment for a specific member in a single month.
The adjustment for a member is done in the first line of the section:
1. Member - Select the member name from the pull down list of your engineers. All engineers are listed, but the adjustment will only be used for an engineer with a bonus that is set up in the month designated.
2. Date of Change - The month that the adjustment will be made.
3. Adjustment - The adjustment will be either a positive or negative addition to the amount of attributed revenue (production $) for the given month.
Click the Create button to create the adjustment.
Adjustment Example
Member 248 worked on a special project in July which was not included in the attributed revenue. The contribution to the project was worth $1,000 in revenue value. To add this revenue amount to his attributed revenue (production $), an adjustment was entered. In the Member/Bonus report for July, $1,000 is added to the engineer's production revenue for bonus calculation.
