1)
The reason the oplympics works is that you can rank people accurately down to within miliseconds. And peoples success doesn't depend on others help.
2)
If the bonus pool is fixed, you can give everybody the same one year if that makes sense given the input and one year you can give something to one guy and more to the rest. You can't do that with a fixed band system. That is its key flaw.
I was not arguing that a team based bonus is not also a good idea.
In my experience three qualities that are very unevenly distributed are motivation, initiative, and talent. Depending on the business some combination of these represents the ideal employee.
Well if the manager can't define a system that everyone buys into for measuring results, there is a problem. Ultimately it's going to be a judgement call to some extent.
The bands are just there to force the manager to avoid adding noise to the signal. If she has to follow the rule and allocate bonuses w/in the bands, she doesn't have to be the bad guy.
1) The reason the Olympics works is that you can rank people accurately down to within miliseconds
Aside from things like diving, ice dancing and synchronized swimming, though supporting your statement those activities are absolutely loaded with controversy because the subjective nature -- as opposed to the objective reality of a stopwatch -- leads to endless differences of opinion.
Ranking makes sense if you have objective measures. In this industry there are staggeringly few, especially for large internal teams working on parts of a whole. Everyone has agendas and imperfect knowledge, everyone has bias and self-serving judgments.
If so you need to keep these two points in mind:
1) The reason the oplympics works is that you can rank people accurately down to within miliseconds. And peoples success doesn't depend on others help.
2) If the bonus pool is fixed, you can give everybody the same one year if that makes sense given the input and one year you can give something to one guy and more to the rest. You can't do that with a fixed band system. That is its key flaw.