Fast Company

At IGN, Employees Use A "Viral Pay" System To Determine Each Others' Bonuses

Ever feel like you know better than the executives who the star performers in your organization are? IGN Entertainment's "viral pay" program puts the power over rewards in employees' hands.

Most companies hand out bonuses at the end of the year, and many of them do so as a form of profit sharing. But IGN Entertainment, a division of News Corp. that creates content and communities for gamers, has developed an innovative system where it's the employees themselves who help decide how much of those profits should go to each worker.

It's called "viral pay," and here's how it works: Twice a year, in January and July, IGN creates a basket of tokens (called "Tokens of Appreciation") based on how much profit there is to share. It distributes the tokens among employees and has them give their tokens--which are worth $1 each--to whatever other employees they want, as recognition for a job well done.

So, for example, if there's someone in ad sales who went above and beyond to help you on particular campaign, you might toss some tokens their way. Of if there's a developer who you think always comes up with great ideas about how to solve particular engineering problems, you might send them a little token love as well. Employees can give all their tokens to the same person, but they usually divide them up among several people.

There are only three rules to the program, Greg Silva, IGN's vice president of "People and Places" (HR and facilities), tells Fast Company: You can't award any tokens to yourself, all tokens have to be given away, and IGN's president (the organization's chief executive) isn't eligible.

"The purpose is to reward super-performers with super-pay," Silva says.

The program was started two years ago because employees wanted a role in helping to identify and reward star performers. "Our employees were saying 'It's great that the managers know who's super-effective and contributing the most, but, quite frankly, we know better, so let us reward and recognize our peers.'"

Silva says it's also turned out to be a great motivator for lesser performers.

While the individual gifts are anonymous (employees only know the sum number of tokens they will receive, not the names of the people who awarded them), the company does publicize the amounts of tokens received by the top employees, as well as the average amount allocated overall.

Seeing those amounts inspires people who didn't receive a lot of tokens to figure out why and strive to hit those numbers in the next round, Silva says.

The company also has a secondary program where a certain number of tokens are given to managers, who can use them to even out bonuses for employees who get overlooked in the viral system.

But Silva says the viral program is useful for confirming who the star performers are and identifying people who should be helped to grow. And it helps identify "unsung heroes"--people who might not being doing the kind of work that gets recognized at all-hands meetings but who are considered indispensible by their peers.

"We are finding that some of the people who might have been in the shadows before are brought to the spotlight," Silva says.

IGN’s innovative recruiting program was profiled in the October 2011 issue Fast Company.

[Image: Flickr user http://taxbrackets.org]

E.B. Boyd is FastCompany.com's Silicon Valley reporter. Twitter | Google+ | Email

Add New Comment

3 Comments

  • Martina K

     : Because this way they don't get a significant amount of tokens in return. You will always have the case where two people award tokens to each other but that doesn't give them a major bonus. This system rewards distribution of recognition and "penalises" 1:1 focussed "buddy relationships"

  • Jamey Stegmaier

    I like this in theory, but in practice, what is to stop an employee from giving all of his tokens to his best friends at the company, regardless of their contributions?