[Closed] Why have bonuses?

This is like watching someone lose at monopoly.

my wife is a teacher, and she gets a bonus
more of a retention bonus than a performance bonus
but I guess performance and retention are intrinsically linked
it's a bonus all the same

The only person arguing against this, is you TJ!

No, I'm arguing against it too, I just break off to eat and play chess with my kids sometimes.

Big bonuses don't motivate - it's fact.

Go google "bonus motivation" and you'll get page after page of psychological studies telling you just that.

The reason we have big bonuses for fat cats at the top of banking and industry is because they can.

It's an emperor's new clothes situation, but fortunately some of the crowd are starting to laugh.

what constitutes a 'big' bonus?

One that is big.

Go read some of those studies I mentioned.

I struggle with long sentences.

Inicidentally, I agree. Bonus motivates and helps to deliver desired behaviours to a certain extent, after which, people only want to have a bonus that is larger than that received in the market, or that received by their peers i.e. they want to feel like they are needed more than others and therefore get more money, or they simply get greedy.
At this point the increase in the size of the bonus is not proportionate to the increase in motivation or the desired behaviour. The bonus then only serves as a measure of their worth to the company, and to retain the individual and stop them from leaving to go to a competitor.

Tootall at what grades?

We only have D grade and above here and they are all in the pot.

I think the way you lump all teachers and all bankers together is a broad brush. I warrant that some teachers would perform better if they had a bonus scheme and some bankers wouldn't perform any worse if they didn't have one.

The reason we have big bonuses for fat cats at the top of banking and industry is because they can.

Tootall - thats a part of my point. Its all so arbitrary.

if everyone shared equally in the success it may have some merit as it is it is just extra money for those who can.

Does it motivate them ...no idea I dont know any but I would hazard a guess they are greedy and avaricious so i would assume they do motivate folk.

Its all so arbitrary.

So what? Life does not follow a nice pattern and stuff happens. People live in different ways and there are many things we all don't like or agree with. You seem to take that to a new level and I have no idea what you try to achieve on here. You go blue in the face, several of us disagree or point out the shortcomings in your 'arguement' and the thread grows. None of us change our mind, you shave a few more minutes off your life and we're bemused again.

If you have a bucket of water, and you put your hand in the bucket of water, and you take your hand out of the bucket of water again, what has happened to the bucket of water? Nothing.

RPRT - which are you arguing, that bonuses don't motivate, or that [b]Big[/b] bonuses don't motivate?

TJ's argument is nothing to do with the [i]size[/i] of the bonus, He was more than clear that it was the principle of motivation, not the size of the bonus, that he disagrees with!

typically, the bonus pot is a share of the profits and is therefore variable.
schools, charities, public sector, NGOs and other not-for-profit organisations don't make profits therefore don't have a bonus pot, they operate on a fixed budget.
to create a bonus pot, you would have to take it out of payroll and therefore reduce people's base salaries (fixed pay).

He was more than clear that it was the principle of motivation, not the size of the bonus, that he disagrees with!

Not at all - I several times asked the same 2 part question which was all I was getting at.

Tootall- there were two threads on bonuses going simultaneously

the same people were on one defending bankers bonuses and on the other attacking the possibility of tube drivers getting a bonus.

It simply amused me to point out the hypocrisy of this and to watch people floundering trying to justify bonuses working and being necessary for one group and not being necessary for the other group.

So what? Life does not follow a nice pattern and stuff happens. People live in different ways and there are many things we all don't like or agree with. You seem to take that to a new level and I have no idea what you try to achieve on here. You go blue in the face, several of us disagree or point out the shortcomings in your 'arguement' and the thread grows. None of us change our mind, you shave a few more minutes off your life and we're bemused again.

If you have a bucket of water, and you put your hand in the bucket of water, and you take your hand out of the bucket of water again, what has happened to the bucket of water? Nothing.

^^This^^

TJ, I've said it before, and will say it again, you should really try and walk away more often. Stop arguing. Stop trying to have the last word. It's not about right or wrong, but about the fact that I genuinely worry about the amount of time and effort you put in to this sort of thing.

So, go and have a beer. Go on, you deserve it! 🙂

the same people were on one defending bankers bonuses and on the other attacking the possibility of tube drivers getting a bonus.

concern for your fellow man is one of your defining feature CPT..your humanity is , as always, humbling.

So TJ - you're coming off the fence a little?

[u]Do you agree that bonuses, in principle, act as an effective tool for motivation, or do you disagree?[/u]

No more bluster about "why one, not the other" - thats been settled, We're happy to apply the same rule to everyone.

simple question, one word answer is all thats needed.

CFH - ta but I neither put a lot of effort or time into this one.

Do you agree that bonuses, in principle, act as an effective tool for motivation, or do you disagree?

perhaps

Maybee

depends

pick one

HTH
😀

We have had posted a very good explanation of the studies that show bonuses don't work two of the many articles that suggest that teachers don't get better results when insentivized by bonuses . But nothing to demonstrate that bonuses work outside of menial repetitive tasks.

So anyone see a real point to them?

Do you agree that bonuses, in principle, act as an effective tool for motivation, or do you disagree?

So anyone see a real point to them?

yes, me, my bonus is commensurate with my in-year performance.

I used to work on a site where drivers were given a bonus for not driving their trucks into things and damaging them. Stupid to reward not bad behaviour, but it worked.

No, I'm arguing against it too, I just break off to eat and play chess with my kids sometimes.

Me too - I've been putting the kids to bed. I don't think teachers should have bonuses, and neither should bankers. In both cases the best available evidence is that it makes things worse.

For the record as TJ's brought it up again, I also disagree with tube drivers wanting a bonus for just doing their job.

I'm not sure if that adds anything at all to the argument, apart from to prove TJ wrong about us all being hypocrites (and it is always good to prove TJ wrong on these threads 😈 )

TandemJeremy - Member
Tootall at what grades?

My workplace has civil service grades G - A
all grades get a twice yearly performance review and an annual report.
The annual report results in a performance rating placing you in one of 5 categories, the top 2 categories result in a taxed financial bonus, the bonus is irrespective of grade so G bands (lowest pay scale) get the same lump sum as A bands.
It's "only" a few hundred pounds but several thousand staff are awarded it, I'm sure a FoI question could reveal the total cost to the public purse and it may even turn out to be a greater sum than a "Fat Cat" bonus.
We also get untaxed bonuses (? bonii} in the form of retail vouchers for taking on extra duties (such as first aider, fire warden, safety rep) or making a suggestion in the "suggestions box" which gets taken up by the organisation.
There is also a reward scheme for participating in a project which results in a product or service suitable for commercial development.
Add on expense payed attendance at conferences, working away allowances, and "unsocial hours" payments (on top of any overtime paid) and our branch of the public sector gets a pretty decent deal 😀

Big bonuses don't motivate - it's fact.

Personally I disagree with that. I'm on a bonus structure where I can expect 10% of my salary if I meet what's expected of me. However, the incentive is there to earn up to a 20% bonus if I really exceed my "Annual Performance Objectives" and that is a tremendous motivation for me at work to really push myself throughout the year.

So anyone see a real point to them?

As per my earlier post using the example of John Lewis, when everyone in the company gets an equal share of the bonus pot dependant on the performance of the company as a whole, then I think they can be justified.

When a few of the most senior people in the company get a huge payout and the menial staff at the bottom get nothing, then no I don't.

Loads of people keep going on about how motivating it is for the CEO, but how motivating do you think it might be for the staff on the ground floor who see their boss getting all of the bunce?

As per my earlier post using the example of John Lewis, when everyone in the company gets an equal share of the bonus pot dependant on the performance of the company as a whole, then I think they can be justified.

Goldman Sachs staff all get a share of the bonus pool as well, all dependant on the performance of the company as a whole. Much like John Lewis, the level of bonus paid is according to the position and salary of each member of staff. Some get millions. Glad to see that you agree with that.

Stupid to reward not bad behaviour, but it worked

Personally I disagree with that.

Then you're wrong.

Go ask a psychologist.

Much like John Lewis, the level of bonus paid is according to the position and salary of each member of staff.

Nothing like John Lewis.

Why do you think I went to the trouble of explicitly stating that "John Lewis, [b]when everyone in the company gets an equal share of the bonus pot[/b]"?

You really are an utter ****.

(Yes I except my banning - I spend far too much time on here anyway).

Then [i]you're wrong[/i] you have a different opinion to me.

FTFY.

This thread would really go a lot better if everyone would stop trying to deal in absolutes. The question isn't whether bonuses do or don't motivate people; it's whether, on balance, they are an efficient motivator. Most evidence seems to say not, in most cases but saying "They are not a motivator" is daft, because different people respond in different ways.

boarding bob - so you are not giving of your best unless you have a sack of money waved infront of you? Idle slacker!

They don't get an equal share. That's the point. They get a percentage. The bonus pool is not done in such a way that every member of staff/partner has the same amount of money in their bonus. See?

An equal share would see the till staff get the same amount as the CEO. That doesn't happen. Nor does it happen at Goldman Sachs.

So are the bonuses at GS paid out in exactly the same way as at JL (in direct proportion to their basic salary)?

And what % of their salaries do the partners at Goldman Sachs get?

And what % do regular employees get?

Finally, every partner [ at john lewis] receives an Annual Bonus, which is a share of the profit. It is calculated as a percentage of the salary, with the same percentage for everyone, from top management down to the shop floor and the storage rooms.

Yuu are a banker and I claim our £500 billion

I said: Stupid to reward not bad behaviour, but it worked
you said: so not stupid then as it worked

some idiom about prevention and cure

There were a lot of doughnuts at Goldmans this year, not among the partners.

Anyone read The Art of Captaincy by Mike Brearley?

Funnily enough different people are motivated by different things. So how many more pages do we need to prove this obvious fact?

Northwind +1

Also, I think there's the aspect of direction/focus as well as level of effort which I think incentives can strengthen. It's possible to have two extremely motivated colleagues, putting in equal levels of effort. However one is putting their efforts into less value-added activities. I've experienced bonus systems which address this, and which in effect replacing some supervision / line management resource, and hence being beneficial. When I've been on the receiving end of this, I appreciated the 'breathing space' that I had (no manager over my shoulder all the time), and the KPI & incentive system gave me clarity of objectives, and a sense of progress / job satisfaction that far outweighed the modest bonuses.

Why have bonuses?

different people are motivated by different things

Are we done?

There were a lot of doughnuts or zero bonuses at Goldmans this year - not among the partners. Frankly I don't know how they can justify to shareholders the level still paid out as profits plummeted.