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The Problem With Bonuses

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1 The Problem With Bonuses on Mon Dec 29, 2014 10:06 am

karl rove

Reclusion Perpetua
SUPPOSE you’re an employee slaving for a private corporation. Every last quarter of the year, you hope and pray for the day when that extra money is given, aside from the legally-mandated 13th month pay. Hoping to look good to your employer, you start logging in a perfect attendance and producing quotas weeks before the deadline.

The question is: How can you become so amazingly productive during the last few months of the year? The answer is simple: Many employees are yearend crammers under the mistaken belief that bosses tend to judge work performance based on recent events.

Of course, that’s not true. The crux of the matter is—some intelligent employers are troubled with annual rewards, that they use it as an excuse not to release any year-end bonuses at all. They believe in what educational researcher Alfie Kohn is telling us all these years—workplace rewards, including the year-end bonus might do more harm than good for organizations.

Take this story that’s often credited to Kohn: There’s an old man in the neighborhood who was bothered by kids playing ball and yelling all day in a vacant lot next to his house. This was decades back when Facebook, Candy Crush, and Angry Birds were not yet invented. Due to the old man’s age and failing health, he knew he couldn’t just chase them away. So what he did was to offer them 25 cents (remember, this was a long time ago) to continue playing and yelling to their hearts’ content.

The kids knew they always played there anyway and the bonus (additional money) was so great, that they accepted the offer. On the following day, the old man offered the same amount of money urging them once again to make a lot of noise. The kids were delighted. On the fourth day, however, the old man told them he was sorry to offer only 15 cents per kid. They complained but accepted the money anyhow and made noise as usual.

On the fifth day, he told them he could only pay 5 cents. The kids were utterly disappointed. They left the vacant lot and never came back! Why did this happen? Obviously, the old man had changed the kids’ thinking from “I love playing ball in this vacant lot” to “I’m playing ball for the money.”

Also, have you heard of people telling you—“I’m here for the money but I hate my toxic boss. If I got another opportunity elsewhere; I will dump him for good.”

Now, imagine if you are the employer giving, not only the mid-year but year-end bonuses for the past five years. Then, on the sixth year, you decide that enough is enough. You thought of crafting all types of excuses, like the company is losing money. Then what could possibly happen? In this country, prepare to meet a costly, protracted labor complaint against the non-diminution of benefits.

In social psychology and labor economics, “motivation crowding” happens when material incentives (giving of bonus, pay increase, etc.) and punishment (withdrawal of bonus, pay hike, etc.) undermines the motivation level of a person.

Kohn suggests that performance-based reward systems punish people, destroy work relationships, and discourage risk-taking, among other issues. He even suggests that praise is unhealthy when applied as a reinforcing mechanism.

And so, what’s the best way to motivate the workers? There’s no standard answer. You have to go out and seek the truth direct from the horses’ mouth. Check it out with each worker out there.

In selecting an employee for this exercise, remember to prioritize the “best and the brightest worker.” Then, proceed down the line within your management control, with the deadwood as the last person. I’ve done this for more than 35 years, and here’s what I learned:

First, younger workers prefer to have the latest model of iPhones pay than retiring ones who prefers the best HMO care. Second, pioneer-workers tend to boast of their seniority than meritocracy. And third, deadwoods prefer to organize a militant union.

These are tested findings. It’s now up to you to make an informed decision. If you can’t make up your mind, explore the idea of offering P50 to loud neighborhood kids who are readying themselves for the New Year revelry... as a business consultant had it!

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2 Re: The Problem With Bonuses on Fri Jan 02, 2015 10:11 am

zyra m. plata

Arresto Mayor

Sometimes playing with incentives may purge the employees. You wil eventually know who loves the job or who loves the job pay.
We must bear in mind, on the heirarchy of needs, self-actualization is at the peak.

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3 Re: The Problem With Bonuses on Fri Jan 02, 2015 7:00 pm

karl rove

Reclusion Perpetua
zyra: hierarchy of needs? your speaking about Maslow's theory???

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