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Incentive Principles/Tips

  1. Be clear on the behaviours you want your team member to do.
    1. For instance, do you want them to care about growing views (keeping your channel alive and well), focus on profit, or something else?
  2. Be aware that whatever you incentivise, you de-incentivise something else
    1. For example, if you give a Channel Manager a % of Adsense, but no % of merchandise, then they’re unlikely to promote your merchandise store since they don’t benefit. So either give them a cut, or keep them accountable to promoting it.
      1. If they are just paid a salary, they’ll likely focus on both more equally (but likely with less effort than being incentivised with a % of both)
    2. Additionally, by incentivising someone to care more about your channel, the de-incentivisation may come from not just trade-offs within the business… But outside. For instance, caring about their social life less. Or a similar value outside of work.
  3. Remember: Give people an incentive based on what they can control. If they can’t control it, you’re wasting your money
    1. Example 1: if you give a Creative Director a profit share, yet they don’t control team expenses, they may feel like the profit figure is something hard for them to impact. And therefore, if they put in extra effort, that effort won’t make them more money. Since you may hire another team member and screw the profit figure! :)
    2. Example 2: If you want your video editor to improve the video’s quality and retention, then giving them 5% Adsense of your overall channel is going to pay them for evergreen videos in the past. Those are videos they can’t control the quality of (they’re already posted), so you’re giving them free money. Better to give them a 5% of Adsense generated by videos they edited, in first 30 days of launch
  4. Give team members good base pay (fixed incentive) as well as variable pay.
    1. You want people to feel that the stable pay, their salary, is fair. It does not need to be very generous, but should feel reasonable. Otherwise, if your channel has an unsuccessful month, and you’re paying a % of Adsense, that person may feel resentment about their overall pay
    2. Stability is also important since you want people to focus on performance and growth, not concern over whether they’re earn enough to live on comfortably. Ray Dalio, the billionaire, phrases this as “provide both stability and opportunity”
    3. Lastly, if someone’s earnings are $10k one month, $6k the other, then while they’ll be incentivised to care about your channel performance, the uncertainty will effect them mentality. Thought experiment: Would you rather be guaranteed $2000 per month, forever, or $1000 some months and $3500 others? You probably prefer the certainty. That’s human psychology :)
  5. Try to incentivise in ways that make team feel like they’re part owners in the channel and business. Then they’ll look out for “potential issues” instead of only working to fix current ones. That kind of vision will help ensure your channel is predicting issues, solving them, and staying in a growth state!
    1. Example: % of Adsense in first 30 days feels more ownership focused than $100 bonus for 200k views
    2. For some roles, like thumbnail designer, you just need them to perform their role great. So ownership mentality matters less. But for management roles, you really want to think about the ownership mentality being generated.
      1. PS. Ownership mentality is also dependent on your management technique. If you micromanage, you can easily undo whatever ownership mentality your financial incentives are promoting
  6. I recommend “always giving a vision for improvement” in their financial compensation. So you can give them 4% of profit year 1, 5% year 2, or something similar. As long as they know they can keep financially growing in your company, they’ll likely stay.
  7. Do not give incentives in too many conflicting directions. The man who tries to catch 2 rabbits, catches none…

Checklist while deciding on the incentive: