Section Twomanagement develop simplified methods for reporting their
financials to employees and train them to interpret various
measures of performance. Open-book management usually
combines generous bonuses beyond competitive base pay for a
broad group of employees when the firm’s goals are achieved.^59
Such bonuses are carefully spelled out as indicated in
the following:
The bonus in open-book companies is an agreed-
upon part—a significant part—of every-one’s
compensation package. It pays out only if the
company or business unit hits certain goals,
which are determined and spelled out in advance.
The bonus is every-body’s reward for boosting
the company’s performance—for succeeding in
business... Right away you can see a couple of
conditions that an open-book bonus plan must
meet. For one thing, it has to be generous—
generous enough to matter... A bonus plan that
leaves out any group of regular employees runs
counter to the basic ideas of open-book
management. So does a plan with widely
disparate rewards... A bonus is an addition to
competitive base pay.^60