[Closed] Why have bonuses?

Embarrassed? Nah, just prefer not to talk about it online, thanks!

(Work for a large corporation, running a business unit related to risk 🙂 )

You're an insurance salesman?

Show us some of your riding pics 😀

He can't be that busy considering he spends a huge amount of time on here. Even on nice days when he could be out..... riding....?

Don't have any online, Chunky. Sorry. 🙂

I think we could all have predicted that answer.... 8)

Scan some pics? 😆

Which Rugby team/nation you supporting this year?

Personally, I try to do as good a job as I possibly can because that's what I get paid for in the first place.

Which is fine, and perfectly justifiable - but it would also be reasonable to include a bonus element to inspire you to do that little bit more...

Take the much-maligned tube drivers, for example: a justifiable bonus (IMO) would be linked to company efficiency savings, monthly reliability figures etc. Turn up on time, do the job, head home - OK. But actively look for possible improvements, point out possible problems before they occur - it's not necessarily in their job description, but is definitely behaviour that it is in everyone's interest to promote. You could apply similar measures to health workers or teachers, for example: yearly improvements on hospital infection rates, exam pass rates (or whatever) mean a bonus.

What I don't think could be justified would be a bonus simply for doing their job, particularly for workers that get paid overtime etc. for working out of hours.

Personally, I try to do as good a job as I possibly can because that's what I get paid for in the first place.

Which is fine, and perfectly justifiable - but it would also be reasonable to include a bonus element to inspire you to do that little bit more...

Post edited on reflection.

Can someone tell me, aside from the jealousy factor, (which CFH seems to have unwittingly instigated above)
- what difference does someone's employee incentive bonus make to anyone else?

I'm beginning to see a problem here.

Where?

110%? 😀

110%?

Depends what you've rated as 100%. Although I get the feeling we've had this argument before on STW...

Where banking differs from many other industries is the sheer number of potential employers that exist - there are over 300 banks registered to do business in London, this creates a level of competition for talent that has driven up wages in the same way that footballers wages have been driven up. And likewise only a few can achieve success and hence there are plenty of bankers being paid without producing income for their bank, in the same way there are highly paid footballers failing to win trophies.

Exactly. 😆
Clearly both TJ and Rusty Spanner believe that they are contributing 100%, a manager or customer might have a different pov.

- what difference does someone's employee incentive bonus make to anyone else?

Can make a huge difference - potentially very divisive. Some operations require high individual achievement, other operations benefit more from team cooperation and group achievement. In the latter, bonus culture is counter-productive, IMHO.

On reading all the points above, I can accept that there is good logic for having bonus schemes - I have been persuaded to see beyond by sceptical position!

However, of the bonus schemes that I have directly seen, the implemnetation has been shockingly poor - and I suspect that this is all too common...

eg.

1. Company makes a profit = bonus conditions triggered, bonus pot defined based on existing scheme rules

2. Board take 50% of pot, remaining 50% shared between business units that make a profit

3 BU director takes 50% of BU pot, remaining 50% allocated to each team that makes a profit.

4. At team level, manager takes 50% of whats left, and shares the remaining 50% i.e. bugger all, between the people who have actually generated the revenue for the business - and only if they have hit EVERY PM target.

Every employee who failed to hit every PM target - bonus flips over to the team / BU manager etc... SO managers set some very arbitary targets in appraisals, that are down to luck, or outside of your control. eg business requirements may dictate that in one year you are doing more business development to grow the business - so your team as a whole generates more revenue, but you individually hit your sales target, but at the expense of your individual revenue target - therefor HA HA no bonus 👿

Quite simply for my company we pay bonuses to reward hard work by measuring tangible outputs from each employee. It ensures that if an employee works his nuts off to meet certain criteria then he gets an additional reward compared to someone who does it. One of the big problems within large organisations (very prevelant within public sector) is that employees aren't motivated to work harder than their peers as they all get paid and rewarded the same. If the guy next to you is doing sweet nothing all day but gets paid the same as you thats not very motivating!

However, of the bonus schemes that I have directly seen, the implemnetation has been shockingly poor - and I suspect that this is all too common...

No argument here from me about that - but at the same time it's not a reason to automatically dismiss all bonus schemes as a divisive, unfair con.

[i]Some operations require high individual achievement, other operations benefit more from team cooperation and group achievement. In the latter, bonus culture is counter-productive[/i]

I disagree, but anyway, not what I meant so I'll rephrase:

- what difference does someone's employee incentive bonus make to anyone who doesn't work for the same company?

It ensures that if an employee works his nuts off to meet certain criteria then he gets an additional reward compared to someone who does it. One of the big problems within large organisations...[snip]

But conversely, if you work in a big organisation where everyone is working hard, it becomes very divisive to pay bonuses to some. Some "additional effort" is easier to recognise (and easier to "make visible").

Also the "outstanding achievement" of some is often highly dependent on the skill, expertise and dedication of others, who are not in as recognisable position...

- what difference does someone's employee incentive bonus make to anyone who doesn't work for the same company?

If it's public money that's paying for the bonus it's perfectly reasonable to have an opinion about it.

This is the most fallacious argument EVAR.

That may be because it is not supposed to be an argument but a commentary. The footballing analogy follows that many business units in banks did have unsustainable business models as too many people were chasing too small a market, it also should be stated that this is historic and after recent mass redundancies may well change. Although "rain makers" will continue to be perceived to exist and will continue to secure extraordinary compensation.

I disagree, but anyway, not what I meant so I'll rephrase:

- what difference does someone's employee incentive bonus make to anyone who doesn't work for the same company?

Really, there must be a better answer than that, surely? I just don't get it.

OK - I can see that. In the context of the current media frenzy - prob nothing to do with other people apart from the whole "politics of envy" type agenda...

Except that current media frenzy is about bonuses to people who are effectively paid out of public money.

Meanwhile the whole bonuses to bankers scheme was certainly one of the contributing factors behind us being in the mess we're in - so why should we have no interest in that?

Yeah, I get that - but they are an extreme case.

The rest, like me getting 3 grand (before tax) as a nice little Christmas present, affects nobody else..?

So, to keep good people in the company, keep it doing well in the market, it's a good thing yes?

How about that we take these people who need bonuses to motivate them and instead motivate them by sacking them for poor performance instead.

IE you do your best for the salary you are paid, if you don't do your best you get your cards.

simple, motivating, cheap- and more importantly how it works in most of the workforce

To me its an absolute disgrace to say you need to have a bonus dangled in front of you to be motivated to do your job properly 'cos that means without the bonus you do not do your job properly. Sack the laggards!

🙄 wish I'd left the filter on

Great idea TJ. And in the instance of the RBS guy, set his salary as his £1.2m plus the value of the bonus... same difference... You're still looking at it wrong IMO. The salary plus bonus is his real salary, he just has to perform (hopefully if the criteria are right) to get his full salary.

[b]To me[/b] its an absolute disgrace to say you need to have a bonus dangled in front of you to be motivated to do your job properly 'cos that means without the bonus you do not do your job properly. Sack the laggards!

There's actually a rather neat study that demonstrates that bonus's work for those employed in mind numbing repetitive tasks and are counter productive and reduce performance in more intellectually demanding roles.

That probably explains why the Banks are all bust.

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So Don - you think its acceptable that people get their salery for not doing their best - and have to have more money waved in front of them to ensure they do their best.

Why not just sack them ( or threaten to) for underperforming to motivate them.

Apparently it works in public service.

Well, I'm glad I wasn't being thick and that bonuses are F-all to do with anyone else.

It's not more money, it's part of the overall salary. They get a pay cut (eg no bonus) if they don't perform.

TJ - have you ever met human beings before? Most respond better to a carrot than a stick - it is well known and understood. If you motivate with a negative action you get far less from people. You also come across as being very under appreciated in previous work posts - that you have gone above and beyond what was expected of you. Imagine there was some sort of recognition for your efforts - something useful rather than a certificate or kind words. Money, perhaps?

A large part of how bonuses work is the way in which people are managed and reported on. If, for example, you were given a set of goals or targets to achieve in the coming year (very common now) and that was based around your salary. A bonus might be awarded if you exceeded your targets - rewardng you for doing better. It really is that simple.

According to this video, and other research like it, bonuses work well for call-centre type jobs, and not for jobs requiring initiative. So bankers obviously need them.

http://www.ted.com/talks/dan_pink_on_motivation.html

Tootall - merely pointing out the inconsistencies and hypocrisy in this debate.

Take teachers - expected to give of their best all the time and threatened with the sack for not doing so. No bonus culture there. So in the case of teachers its the stick that motivates apparently but for bankers only the carrot does.

But these bankers apparently will not do of their best until they are offered large bonuses. I say sack then for shirking for not doing of their best

Apparently it works in public service.

The aim is to pay people who perform the best, the best and to move out those who don't perform adequately. In between the two sets, there are those who perform adequately - they may be doing their best but not have the aptitude of those who perform better or they may have the aptitude but not the drive. If they are doing a satisfactory job, there is no point in getting rid of them. Although, there are commercial organisations who sack their worst performing 10% every year, no matter what their results.

How about that we take these people who need bonuses to motivate them and instead motivate them by sacking them for poor performance instead.

There is a vast difference between doing an average job and poor performance. Bonus's are designed to reward those who go the extra step.

merely pointing out the inconsistencies and hypocrisy in this debate.

Really? So why are teachers expected to do of their BEST all the time merely under the threat of the sack ( and that threat being made more explicit) but bankers are expected to only do their best with the incentive of a bonus?

So why are teachers expected to do of their BEST all the time merely under the threat of the sack

I know a lot of teachers and don't agree at all with this statement.

all the time merely under the threat of the sack

Isn't it incredibly hard to sack a teacher ?

http://www.telegraph.co.uk/education/universityeducation/9011225/Poor-teachers-to-be-sacked-in-a-term-under-reforms.html

Typical public vs private bullshine. If teachers now say thay they are motivated by money, why not admit that you made a mistake and join the ratrace.
I always thought teachers taught so they could impart imformation and improve others.... Not feather their own nest.
I'm sick of listening to the petty jealousies from the likes of TJ on this subject. Grow some, get a different job or shut the F. up!!!
FFS!

What all the pies said, incredibly hard to sack a teacher and to prove average performance.