Have you ever considered letting team members distribute team bonuses themselves? How can this be discussed openly and transparently without harming morale? Sam, a ScrumMaster at Titansoft, shared insights on the topic “Distributing Bonuses as a Team” at Agile Summit 2021, explaining the practical methods used by Titansoft’s agile development team to collaboratively allocate bonus proportions.
1. Why Share About “Team-Based Bonus Distribution”?
Titansoft began its Agile transformation in 2014, embedding an “Agile mindset” into both software development and organizational management. This included implementing salary transparency and self-directed promotion policies for software developers, as well as empowering Scrum self-managing team members to allocate team bonuses themselves!
Titansoft’s development teams can choose to let their managers distribute bonuses, or discuss bonus distribution among themselves. Whenever Titansoft employees talk about this in external communities, it often sparks curiosity amongst those who want to know how the team discussions work. In fact, Titansoft doesn’t impose a rigid process that teams must follow. Teams are given the flexibility to design their own processes or invite a ScrumMaster or external facilitator to guide the conversation.
Drawing from years of experience as a ScrumMaster facilitating team bonus allocation, Sam summarized a smoother approach to bonus distribution, showcasing how Titansoft utilized remote work experiences and tools, like the MIRO online board to support discussions.
2. What Are the Effects of Team-Based Bonus Distribution?
Before diving into the practical discussion steps, let’s explore the positive impact—promoting team discussions! As the Agile Manifesto states: “The best architectures, requirements, and designs emerge from self-organizing teams.” Members of self-organizing teams work together to complete sprints, communicate with clients, and achieve shared project goals. Through daily stand-ups and retrospectives, they are generally well-informed about each other’s work. However, within the Scrum framework, it’s worth reflecting:
- “Can team members articulate each other’s contributions and achievements?”
- “Has the team ever seriously discussed each member’s contributions?”
The process of discussing bonus allocation offers an opportunity to revisit these questions! Team members reflect on who contributed to the project, what they accomplished, and why it mattered. This process helps bring personal values to the surface, enabling the team to align on shared priorities and improve long-term collaboration effectiveness.
3. How to Allocate?
Next, we move on to the practical steps for facilitating discussions.
[Team Achievements]
The first step in the discussion should not dive straight into the topic or ask team members to immediately write down allocation ratios. The initial step, “Team Achievements,” involves the ScrumMaster (SM), acting as the facilitator, inviting the team to reflect on the achievements the team has accomplished during the period. This allows members to individually review emails, documents, and items in the Product Backlog.
In addition to completed team achievements, non-product-related accomplishments are also part of the retrospective. These include impactful actions such as initiating process improvements or introducing innovative technologies.
As shown in the Miro example above: The top-left section, Team Product Achievement, and the top-right section, Team Non-Product Achievement, are for sticking notes listing product achievements and non-product achievements respectively. The bottom-left section, Other Contribution, is for capturing any sudden flashes of inspiration or contributions, whether related to the product line or not. As for the bottom-right section, 2nd Half Bonus Focus, it acts like an “idea bank” where team members can write down the changes they hope the team will achieve if time permits. If someone successfully realizes one of these ideas in the next bonus distribution cycle, they can receive an additional bonus.
Once team members categorize their sticky notes, it provides a clear overview of all achievements and changes during the period.
[Team Member Contributions]
When we finish categorizing the team’s sticky notes, the next step is identifying the main contributors. Here, team members tag who contributed to each task directly on the Miro sticky notes. After everyone has tagged their contributions, there will be an additional time allocated for members to clarify any questions or discuss differing opinions.
For example, in a Scrum Team, a common question often arises: since the team typically works together, it can be challenging to pinpoint a primary contributor. How should we handle such dilemmas? Sam, based on his years of experience with teams, offers a solution: during the tagging phase, members should first write down the individuals they believe made contributions, without worrying too much about how to define “contributor.” Even if everyone’s definitions vary, that’s okay. Each team member will naturally have different perspectives on various tasks. The purpose of writing down names is to help members reflect on the accomplishments of the team. A subsequent discussion time allows for discussion on consolidating these opinions, allowing everyone to share their viewpoints.
[Two Rounds of Bonus Allocation Discussion]
Next comes the main event—discussing the actual numbers! This process involves two rounds of discussions to establish a connection between “bonus” and “contribution.” On the Miro board, the horizontal axis will display labels such as A, B, C, and D, corresponding to the names or photos of team members.
In the first round, each member will allocate bonus percentages to each individual based on their judgment and explain the reasons behind their allocations. After hearing everyone’s perspectives in the first round, members may develop new ideas. In the second round, they can reflect and adjust their bonus allocations accordingly.
To avoid members repeatedly changing their decisions, Sam places great importance on clearly outlining the process in advance, emphasizing that there are “only two rounds.” He explains the rules beforehand and asks members to make decisions within the two rounds.
[Reflections on the Discussion Process and Results]
After allocating the bonus, the meeting does not end immediately. More importantly, it is essential to consolidate and learn from the discussion process. The first three stages—starting from individual perspectives, discussing team achievements, identifying key contributors, and determining allocation ratios—help reveal the members’ shared values. Sam hopes the discussion fosters long-term team collaboration and learning.
“I want the team to not only share subjective views, but also learn from each other. Through this process, we gain new perspectives on one another’s contributions. For example, why am I willing to assign a higher value to another member’s contributions?”
In the final step, as the facilitator, Sam must ask each member if they accept the proposed bonus allocation. If a member has concerns or dissatisfaction, it’s best to bring them up immediately after the two rounds of decisions, clearly stating the reasons for any objections. Keeping such thoughts bottled up could lead to accumulated dissatisfaction over time, which might negatively impact work performance or team relationships.
4. What Happens After the Allocation?
The ideal outcome is a peaceful conclusion once everyone’s opinions are confirmed. However, if dissatisfaction arises, Sam’s experience highlights the importance of discussing and resolving concerns immediately.
Long-term negative emotions can have a greater impact. “The decision made in the moment is the best decision.” As members gain more experience, they will gradually refine their allocation methods. There’s no need to regret earlier decisions, as the choices made at that time were already the best possible.
Another situation that might occur is the common workplace tendency to prioritize “harmony,” leading to nearly equal bonus distributions among members. If this happens, Sam’s role is to pose questions encouraging members to think, such as, “Is it truly fair?” or “Did anyone contribute significantly more?” While Scrum teams often assess performance at the team level, the purpose of bonus allocation is to recognize exceptional individual contributions. Members should be encouraged to reflect on this.
5. Subsequent Learnings
“Openness and transparency” are key principles in implementing a bonus allocation system. During discussions, Sam uses questions to promote dialogue and make information transparent. However, as a facilitator, he must not interfere with the team’s final decisions.
In the Scrum framework, the Sprint Retrospective is a critical meeting for reflection. Team members review what went well and what didn’t in the past sprint. Similarly, in the bonus allocation process, each meeting offers an opportunity to reflect on improvements for the next round. Over time, members can learn from each experience to refine the process.
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T.8ytes by Titansoft 