What's the Right Bonus Plan for Managed Service Providers?

During the economic turmoil, it’s critical to make sure all of your employees feel like they have a stake in your company’s performance.

Of course, there are many types of employee bonus plans and compensation plans for managed service providers. But MJ Shoer, president and virtual chief technology officer at Jenaly Technology Group Inc., has caught plenty of attention for his intriguing approach to bonuses.

Here’s how the bonus plan works at Jenaly, one of last year’s MSPmentor 100 companies.

1. Jenaly has a quarterly bonus pool based on the net profit for the quarter.
2. Two-thirds of the net profit gets reinvested in the company to fund growth.
3. One-third of the net profit goes into a bonus pool.
4. Staff gets their percentage of the total salary of the pool. For instance, if your salary represents 5 percent of the total company payroll, you’re eligible for 5 percent of the bonus pool.
5. Once Q1 bonuses are calculated, they are paid out in weekly increments in Q2. Then, Q2 bonuses are paid in weekly increments in Q3, and so on. That approach, Shoer says, gets people used to earning more than just their salary and keeps them focused on keeping that extra pay coming.
6. Jenaly sets individual bonuses based on four criteria:

Jenaly’s bonus plan has been a hot topic of conversation at MSP events hosted by CompTIA and ConnectWise. Shoer (pictured) credits a pal who’s an HR manager at Timberland for helping to create the plan.

Another intriguing approach, known as a Sunset commission plan, caught my attention during the Ingram Micro Seismic partner conference in August.

I am not suggesting that one plan can fit all MSPs. And I’m all ears if you have other suggestions.

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