A client is hiring a candidate and asked for my suggestion on an effective bonus plan so I suggested one I’ve used over the years. It has  an objective part (sales, profits, growth, etc.) and subjective part, yet it handles the subjective part is a way that supervisors are usually comfortable. We break down the subjective part (i.e., employee morale, external relationships, making good hires, etc) of the  15% of the bonus into 15 performance areas, thus 1% of bonus per area (you can weight it differently if you wish). The employee presents their own opinion on performance, i.e., the person thinks s/he deserves .75% of the 1% on brand improvement, then the boss does his/her own review, i.e., only thinks the employee deserves .65%. After the boss does the performance review just adds up the totals from all 15 points.

Anyone wanting the outline of this plan can just email me for it.