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Okay, I've been reading books recently on building a high morale workforce, team building, retaining high quality employees, and a host of other topics. It is all in anticipation of problems I'm going to have in a year or two. First, a pat on the back for me for recognizing these, but now I have to do something about it.

Let me give you some background.

My wife and I run a small law practice. We have three lawyers, two legal secretaries and me, the office manager. We have continually expanded over the last five years from just my wife to this size. It's been easy and it's been very rough at times. We're now at a stage where we just want to let things run, as is, for a while, but we anticipate retention issues, because we're a small firm. We also want to get the most out of our employees.

So in all my reading they keep saying people need goals. I agree. Well unfortunately that might sound easy but it's not. The only quantifiable item we have is monthly billings (or collections). I don't really want (and the books don't suggest) wishy washy qualitative goals. So I've come up with this proposal.

We set a yearly fee collections goal (not including disbursments and much harder for staff to manipulate than a billings goal - the money has to be in the door so outragous bills sent Dec. 31 won't count) and if we make 80% or less no bonuses. It then increases to 100% of the bonus at 100% of the target up to 200% of the bonus for 110% of the target (or 120%, I still haven't decided on this). Each staff member would then be given a bonus amount at the beginning of the year (say, $1,000 for a jr. legal secretary, $2,000 for the senior legal secretaries and $3,000 for the lawyers - my wife and I don't count here). That way everyone knows up front what they can get and that, working as a team, they can get some serious bonuses.

My wife's concern is that we are then giving ALL of the staff the bulk of the information on how much our company makes. Let's say we hit out target and bring in $X00,000 next year. Then we start getting, "They made $X00,000 and my salary was only $X0,000, I want a serious raise!" Now that has the reverse effect and actually hurts morale and could lead to people leaving (the EXACT opposite of what I want).

Is my wife's concern valid or are we "empowering" our employees like the books say? Are there other concerns we should have? Should I omit people from the plan (creating two tiers in such a small office doesn't sound smart)?

I'd love to know your views and, if you're willing, your performance bonus plans. Or your views of this one. One other concern is that they go telling everyone else how much we gross (this is a concern because they know other people in the industry) and that is pretty confidential information (and a confidentiality agreement wouldn't really help, I don't think).

Simon
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