[foundry27]

When employees can’t see how their day-to-day actions influence the outcome of bonus decisions, they lose engagement, and it undermines your credibility. At the same time, when individual KPIs pit people against each other (e.g. the dev team is rewarded when they deliver on schedule, while ops is rewarded for cost savings that might slow dev productivity), it breeds conflict and silo mentality. Which sucks for all involved!

The “best” solutions boil down to economics IMO. In a smaller org you can probably get away with directly tying a % of the bonus to overall company health, which is as authentic and controllable as it gets if everyone’s trying to make the business a success in an interdisciplinary way. In a larger org you might need to measure proxy metrics that are correlated with that overall company health function but more closely aligned with the core missions of each department. Pick out a handful of KPIs per department, but weighted so no single number disproportionately influences the outcome. Smaller numbers of carefully chosen, stable metrics that the team can influence build trust over time.