One of the most difficult issues in managing an advisory firm is establishing a fair balance in rewarding those who own a firm and those who contribute to its growth. In the short term, equity and the work contribution don’t have to be aligned, but in the long term they probably should be.
How Much to Pay for a Client?
Many firms consider incentive compensation for business development. The carrots are there, but the bunnies don’t seem to be running. That warrants a discussion about whether the carrots work in the first place, and how bonuses ought to be structured.
Do Scooby Snacks Work?
Bonuses can be effective for short-term action. For long-term behavior change, culture and management should also play a role.