Make bonus simple, measurable and visible with Prowi. Show real-time to the employee, manage budget with clear rules, and close payroll without friction.
Book a demo · See commission and bonus tools
TL; DR
The good bonus plan creates momentum. The bad bonus plan creates noise. This article shows how to design, roll out, and operate bonuses so that the employee understands the rule, the manager can manage it, and the finances can document it. Everything is thought out for practice in Prowi, where you pull data from the source, calculate correctly, display the expected payout in real time and send the approved amount to salary.
Bonus is a variable payout that rewards measurable behavior and results. Bonus differs from commission, which typically follows sales directly. Bonuses can embrace broader goals for roles, teams and the entire company. You can use bonuses to turn strategy into concrete action. When definitions and data sources are clear, bonus creates direction, pace and fairness. The employee knows what counts. The conductor can adjust along the way. Finance controls budget and auditing.
Bonus works when three mechanisms play together. Direction occurs when the model attaches itself to few, clear KPIs. Pace comes when the employee can see his progress continuously. Fairness follows when data is the same for everyone, and periods, rules and special situations are described in advance. It removes misunderstandings and conflicts. That makes bonus a governance mechanism and not an annual surprise. Prowi amplifies the effect because data flows automatically, rules compute uniformly, and the employee sees his status in the app.
Bonus fails when mixing too many targets, when definitions are unclear, and when computation is done late or manually. It also fails when you fail to describe severance, leave, shared time and currency, or when you lack a clear correction rule on credit note and churn. The result is uncertainty. The employee loses confidence, and the management spends time explaining numbers that should give themselves. A good solution starts with a tight model and ends with an automated operation.
Role-specific bonus rewards exactly the value that the role creates. A seller can get a bonus of gross margin or ACV. A CSM can be measured on NRR and churn. A consultant can get bonus on billing rate and project margin. Marketing can get bonus on pipeline impact and share of SQL. Product and tech can get bonus by exceptional quality results, not for baseline tasks. Choose one primary driver per role and complement with a clear quality gate. With few grips, focus becomes sharp and behavior predictable.
Team and corporate bonuses create common direction. A quarterly bonus may depend on the team's revenue, delivery quality or margin, weighted together with the company's NRR or EBIT. Weighting 70 to 30 between team and company is a practical starting point that both strengthens team effort and responsibility for the whole. When you show development in Prowi, everyone understands how common goals move individual bonus.
Project and milestone bonus rewards when deliveries cross finish lines. It can be about approved design, go-live and stable operation after a fixed period of time. You pay out in tranches once the milestone is documented. Define what counts as approved and bind the documentation to a data source. This way you avoid doubts about when a milestone has been reached. Prowi records milestones and pays out according to the rules.
Retention bonus retains key people. The sign-on bonus helps land a candidate in a hot market. The robust solution is to vest in tranches. For example, a quarter after six months, a quarter after twelve, the rest after eighteen. Add pro rata at shared time and clear rules at severance. When you structure payouts, you reduce risk and retain incentive over time.
Quality and safety bonus protects fire and operation. You can set a bonus that is activated if there are no critical incidents for a period of time or if the audit is conducted without significant findings. Use simple gates with yes or no. Bonus isn't supposed to compensate for baseline behavior; it's supposed to reward extra quality. A gate called NPS above a certain score and zero P1 incidents creates a clear link between behavior and safety.
Brief overview
The employee should be able to repeat his bonus formula without looking in the document. You get it with a primary driver and a quality gate. It's tempting to mix up a lot of goals, but it weakens direction and pace. A tight model sharpens the focus and makes budgeting more secure.
Data sources settle disputes. Write the source next to each KPI. Write Salesforce Closed Won Amount and not just sales. Write ERP invoice and DB for gross margin. Write NRR from the subscription platform. When you tie goals to sources, you create consistent treatment and fewer questions. Prowi mirrors these sources in fields and retrieves data without manual effort.
The period controls the rhythm. Select month, quarter, or year. Establish cut-off dates and chargeback rules. Lock periods after approval. Describe how you handle deals and projects that change status after the end of the period. Prowi locks periods, detects changes in the next cycle and displays corrections clearly.
Marginal means that the rate applies to contributions above a given limit. Retroactive means that the rate is valid for the entire period once you pass the limit. Marginal controls the budget tighter. Retroactive is easy to explain. Choose one model, write it into the plan, and use the same principle for everyone in the same role. Prowi supports both variants, and the simulator makes the difference clear when testing on historical data.
A baseline describes the level to be achieved before bonus counts. A “floor” sets a minimum limit, while a cap sets a ceiling. You can use a cap to manage risk, but a low cap moves behavior the wrong way. Test cap on historical data and ask yourself if cap covers up a design problem. Often the solution is to improve gating or to switch to marginal payout.
Write rules for severance, leave, shared time and currency. Write them briefly and concretely. Describe how you handle churn, returns, and credit notes. Describe whether disbursement requires employment on the payout date. Once you make it explicit, the system can enforce it the same for everyone. Prowi has fields and workflows for all these scenarios.
Management should be able to see audit trails. Who approved what, when, on what basis. What data was behind it. What changes came after. Prowi saves all steps and makes approvals part of each race. It reduces risk and saves time in finance and HR.
Formulas and templates you can use directly
See commission and bonus tools · Calculate your business case
Put the bonus up around the goal achieved as a percentage. Choose a target amount and an attainment factor that increases with the result. Under a lower limit, you don't cash out. From one limit to the next, the bonus increases in increments. By overfulfilment, you provide an additional factor. The effect is clear for the employee, simple for the manager and safe for the budget.
Use marginal rates for incremental improvements. No bonus in the lowest range. A moderate rate for the next. A higher rate for strong margin. That model rewards improvements where they are created, and it simultaneously protects budget because you only reward the marginal boost.
Choose a weighting between team and company to balance closeness and wholeness. A classic weighting of 70 to 30 gives the team a strong incentive without losing common direction. When calculating in Prowi, the employee sees how both components affect the total bonus.
Use gates that guide towards responsible behavior. For example, an NPS above a defined level and zero critical incidents during the period. Gate means that bonus only pays out if quality is met. Historical data often shows that a simple gate significantly reduces errors and escalations.
Choose clear odometers for payout. Divide the amount into tranches. Document what triggers each part. Add pro rata for shared time. Describe treatment by voluntary and involuntary severance. With strict rules, the retention bonus becomes a precise tool and not an obscure special scheme.
Start with one document per role. Write purpose, target audience, KPIs, period, payout mode, baseline, floor and cap. Add special rules such as severance and leave. Prowi has a plane object in which the same fields exist. In this way, document and system are connected.
Bind each KPI to a specific source. CRM delivers sales figures. ERP delivers invoices and gross margin. The CS platform provides NRR, churn and adoption. The HR system provides employment status and FTE. Prowi imports, matches and validates data so that the calculation builds on the same basis every time.
You can connect Prowi to the systems you already use. Start with CRM for sales, a billing system for realized revenue and gross margin, and a payroll system for disbursement. Use these links as shortcuts:
Once the integrations are in place, you get the same data base every period. That makes the rules stable and disputes rare.
Create thresholds, multipliers and gates. Choose marginal or retroactive. Describe all or nothing if individual goals require full fulfillment. Define caps and floors. Everything can be set up in the same plane, and you can have multiple models in the same plane if the role requires it.
Run the model on the last months. Compare against previous payouts. View outliers and simulate how a change in rates or payout mode affects budget and behavior. This test uncovers blindspots and eliminates future conflicts.
The employee sees the bonus earned, the expected payout and what is missing to reach the next step. Notifications provide ongoing feedback. The ongoing visibility drives the behaviors that the model rewards. The leader sees the same logic for the team and can remove obstacles along the way.
When the period closes, the managers and finances approve. Prowi exports the file to the payroll system and you can post drafts. The whole process lies in an audit trail, so you can always explain a payout or a correction.
A team has quarterly gross margin targets. The model uses marginal rates in four ranges and a single gate for quality. The team gets a clear path to upside without budget shocks. When management runs backtests of twelve months, outliers calm down because rates and cap can be fine-tuned. The employee sees his status in the app and knows what is missing to hit the next step.
A delivery unit lives off hours and project margin. The model rewards margin marginally and pays out at three milestones: approved design, go live, and stable operation after thirty days. On time acts as a gate. Prowi links milestones to sources, so payout follows documentation. The team knows when a milestone counts and finances can revise without extra work.
The CFO controls the bonus with three levers: rate, payout mode and cap. A backtest shows the effect of each lever. A simple scenario shows baseline, a conservative outcome, and an optimistic outcome. The model stands on its own when the difference between scenarios lies in performance and not in interpretation of rules. Prowi saves the test so that management can explain the choice of rates and cap.
Measurement Points You Should Follow
See time saved, errors avoided and changes in performance. Measure ROI with fixed formulas. Repeat in a quarter rhythm. Communicate changes early and consistently. Small, frequent improvements work better than infrequent large rewrites.
Decide pro rata for the period. Deciding on disbursement requires hiring on the payout date. Describe exceptions in case of your own illness, maternity leave or termination of the company. Once the text is ready, Prowi can enforce the rule automatically.
Scale bonus by FTE. Prowi retrieves the FTE from the HR system and adjusts automatically. It ensures equal treatment of one's cases and reduces manual corrections.
Define the course date and method. Use the same course principle every time. Prowi can retrieve daily or monthly courses and document which course was used.
When a deal is reversed, the bonus must go with it. Write the rule for the clawback and put it into the plan. Prowi calculates the correction and shows the effect in the next period, so that both employee and finances can follow the trail.
Data Conflicts and Errors
Select a primary source, lock periods, and create a data repair process. Prowi shows differences between sources and suggests match. When you have a fixed process, you avoid ad hoc decisions and dissimilar practices.
Quick overview
Sales can be measured on revenue, gross margin, ACV, win-rate, and cycle length. Customer Success can be measured on NRR, GRR, churn, NPS and adoption. Consultants can be measured on billing rate, margin, and on-time. Marketing can be measured on pipeline impact and share of SQL. Product and tech can be measured on lead time, deployment frequency, change fail rate, MTTR and number of critical incidents. Choose one primary driver and one quality assurance. That combination creates focus and protects quality.
Stick to one page per role in the first version. Use the same structure every time. Explain formula with sharp examples. Show three scenarios. Share the document, show Prowi live, and let the employee ask questions. Repeat the message in a short status email every month or every quarter. A consistent language and fixed images create tranquility.
Put a sponsorship at the top with the CEO or CCO. Let HR and Finance own the rules and budget. Let data owners drive import and quality. Let Prowi be the engine that ties it all together. Introduce firm approvals, audit trails, and a change process that describes how changes are rolled out and communicated before the start of the period.
Automation saves time. HR and Finance spend fewer days collecting data and calculating in spreadsheets. Automation eliminates errors. One's calculations, fixed periods and clear rules reduce corrections and disputes. Visibility increases motivation. Employees adjust behavior when they see the effect in real time. You can put numbers on it with simple formulas for time saved, errors avoided and expected boost in revenue or margin. Prowi helps model the effect so you can put a business case on the table.
Personal quarterly sales bonus can be built around gross margin with marginal payout in four steps, a quality gate and a moderate cap to manage risk. The CSM semi-annual bonus can be built around the NRR with a simple retroactive model and an NPS gate. Consultant bonuses can be built per project with margin as the primary driver, milestones as payoff points, and on-time as quality. All three templates reside purely in Prowi because you can describe sources, gates, and thresholds as fields in the plan object.
This article provides overview and practice, not legal advice. Rules may vary by collective agreement, contract and case law. Three steps create robustness. Write everything in clear words. Treat one's case the same. Get a legal review of plan and document before commissioning. When you do, Prowi can enforce as decided.
Pre-go-live checklist
Once this list is ticked off, operation is safe.
Everyday life in Prowi is simple. Deals and projects are imported automatically. The rules calculate the accrued bonus on an ongoing basis. The employee sees progress and shortcomings. The manager sees the team's curves and outliers. Finance approves and exports to wages. Corrections roll into the next period with visible trace. The result is fewer questions, faster payouts and higher confidence.
Want to make the bonus simple to understand and easy to operate? We can set up your plan in Prowi, backtest your data and display the expected bonus in real time in the employee app.
A bonus plan works when it's simple, measurable, and visible. Pick few KPIs, bind them to sources, and stick to one payout logic. Write rules for special cases. Automate calculation, approval and disbursement. Show everything in real time for those who have to deliver. When you do, doubts and noise disappear, and bonus becomes a management tool that lifts the business. Prowi is built to just that rhythm. It makes the difference between a spreadsheet stumbling and a drift standing on its own two feet.