CrowdBonus: Would you trust your peers with a bonus?
There is a very common refrain: Companies are not democracies
The core concept of capitalism is that while there are democratic forces that govern the market. However, 20th century management science dictated that companies, and other economic vehicles should be internally optimized for strict decision making and tops-down leadership.
So when I saw CrowdBonus on Product Hunt today, I was intrigued. One of the core sources of power within a company is your salary and your bonus. Companies reward great performance with a higher salary and bonus, while they punish poor performance through withdrawing bonuses or even terminating payment.
So why does it make sense to provide this power to peers? Let’s deep dive into the company
CrowdBonus offers software where companies can create a reward bonus system for employees. The goal is not necessarily to replace all of the bonus that can be provided to employees, but instead it can be used as a supplement to provide employees with more agency to show appreciation and empowerment.
For example, employee X can be given a budget of $50 per month, and they can use this budget to provide a token of thanks to employees each month. The goal is that no one person has enough money to really meaningfully impact decision making or change behaviour in the workspace, but enough to elicit positive impacts on the team morale.
Now let’s break down the core proposition of the company:
The core concept is the impact the service will have on employees. CrowdBonus is emphasizing that the core proposition is that this service will help drive employee satisfaction and happiness. In this, there are few assumptions that we can break down further:
- As an employee, I feel that I would trust my company more if they gave us autonomy to choose how to reward our colleague.
- As an employee, I feel that peers are closer to my performance and can more realistically see when I do a good job.
- As a member of a team, I feel that acknowledgement from the team is important to me.
The key thing that we can challenge here is these assumptions about employees.
Let’s first start with the positives. I believe this can be a really interesting way to bring a team closer together. Instead of treating this as a true bonus structure, or even large sums of money (i.e 100s of dollars), it may be better to have this more as a light hearted supplemental bonus structure. The service itself can also be repurposed to serve many existing bonus structures, such as employee of the month. This can be potentially very lucrative, as currently, these systems are not easily set up.
Let’s now pursue some potential negatives.
One aspect of acknowledgement and performance measurement that is extremely crucial for employees is a system that has a high degree of fairness and predictability. A perfect system would be where if an employee puts in effort X, then they receive reward Y. When we introduce more structure and a higher reward to peer-reviewed rewards, there can be instances where people can feel that their work is not fully appreciated. While not an issue that I believe will be a major contributor to employees feeling disheartened, I do believe it’s a case scenario that can be addressed (i.e potentially 1st, 2nd or 3rd prizes? Runner up, etc.)
On a final note, one very interesting note is that the marketing seems to be targeted to employees. This seems to be further evidence that CrowdBonus believes that the key to their success is through winning their market bottoms up (i.e if the people that are participating in the product are happy, decision makers will follow through it)
Overall, I would classify this as an interesting product that does seem to have identified a problem space. However, I think there are still a few questions that need to be clarified before I could have strong confidence on the potential success of this product.