Key Question:
A: Be generous.
Q: Should a business pay bonuses even in years when there are no profits.
A: It depends. Advertising is a fickle business with highs and lows. Other businesses have more constant revenue streams and, therefore, earnings streams. What Mama Zubi recognizes is that family expenses for home, transportation, education, vacation, etc., are relatively constant, even though they work in an industry which has big ups and downs over the years. She would be creating a hardship for her employees if she gave no bonuses some years and large bonuses others because it would be difficult for the families to budget the household finances. The important thing is to establish a connection between bonus compensation and performance. Bonuses should be incentives, not entitlements. In an established business with a steady growth pattern, it makes sense to commit to a certain percentage of bottom line profits as the bonus pool. At the end of the year, that amount will be distributed on a discretionary basis based on the owner’s judgment of each individual’s contribution to the
profit or under a more mathematical model, such as pro-rata based on salary.
Think about it
Do you give bonuses in your business? Under what circumstances? To whom? Does everyone know your criteria so they are incentized to benefit from the bonus?
Clip from: Zubi Advertising
"Hispanic Business Is Big Business."
Miami: This story begins back in Cuba in the 1960s, but we pick it up in 1976 when Tere Zubizarreta started an advertising agency that specialized in crafting messages to Hispanic markets.
She was a very different kind of revolutionary. Che Guervara would lust to do what Zubi has done.
Today Zubi Advertising is the largest independent buyer of advertising on Univision. Their success is based upon insight that comes from a deep, empathic understanding of people. You will learn that this advertising agency applies science to lights, cameras and plenty of action. Plus, we look inside Cuba, marriage, and the dynamics of family business. It is tough stuff.
Zubi Advertising is the largest privately-held, full-service Hispanic agency in the U.S. with offices in Detroit, Los Angeles, Dallas and San Antonio and over 100 employees. Their work is to champion and empower other people's dreams. And, Tere Zubizarreta did it in rather extraordinary ways. Tere will always be remembered for trying to give the credit for her work to someone else.
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Zubi Advertising
Joe Zubizaretta, CEO
355 Alhambra Cir., 10th Fl.
Coral Gables, FL 33134
305-448-9824
Visit our web site: http://zubiad.com
Office: 305-448-9824
Business Classification:
Advertising
Year Founded: 1976
Pay A Bonus Even When There Are No Profits
TERESA: Let me tell you a little incident. There have been years--I mean, the advertising business is very fickle. And there have been years where we have closed the year in the red. But everybody has busted their butt to make it go. So my philosophy is, `Well, if I'm in the red already and these people have worked their butts off' with me all year long, they are entitled to a bonus even if I'm in the red. Because if I'm going to be in the red for $100,000, I'll be in the red for $150,000. I mean, I'm already in the red.
And so I give everybody a bonus.
