Comments on: Are Bonuses Really Effective Motivators?

By: Mike

Mike — Tue, 05 Apr 2011 09:59:08 +0000

@MyLifeROF, yah, i always thinking of a bonus as it does motivate me and my coperate to work more harder and harder and at the end is good result. I cant say it enough but when i got a good profit with any other way, i always love to get it.
Mike´s last blog ..How To Find The Best Cheap Car Insurance For Your Needs

By: Me.

Me. — Fri, 18 Feb 2011 12:26:57 +0000

@David/Yourfinances101, I think that you are absolutely right, however I think the point of this article is that the only tasks you can really measure are mechanical or algorithmic in nature. How do you measure cognitive or heurstic tasks – very difficult – usually many solutions with varying degrees of correctness – how do you know when someone took too long to do when it has never been done before etc… Cogitive work growth in the US is tremendous. In the US we tend to outsource or automate a lot of our mechanical and algorithmic work. My employees perform mostly cognative tasks these days where 15 years ago it was flipped. There is a new reality happening and we must embrace it.

Bonuses do not work in my environment. I found that paying people well in the first place eliminates the need for bonuses and letting them work autonomously and self evaluate their own performance works much better for me. Infact I have on group of 20 employees doing the work I beleive in my old structure would take 100+ employees.

BTW. I used to be a senior vice president of the largest US financial institution. Oops, did I give something away? Hmmm…

By: Pk

Pk — Sat, 27 Mar 2010 14:40:16 +0000

They don’t really motivate me…but they did help getting rid of the ‘it sucks to work here’ feeling for sometime.

By: Awareness Home Funding

Awareness Home Funding — Mon, 22 Feb 2010 20:21:20 +0000

I have always observed, like those mentioned above, that if results are measurable and the bonus related to the level of output (however measured) then it is the most impactful. However, overall, money is a short term motivator. Once that money is incorporated into the savings or lifestyle, the initial motivator is lost unless it is an ongoing factor, such as a quarterly bonus.

By: Andrew @ Financial Services

Andrew @ Financial Services — Mon, 22 Feb 2010 18:13:58 +0000

I would agree at David above. I think that in the first place, the goal or result should be measurable, or else, you cannot determine the outcome.

About the “bonus as a motivator” thing, I tend to believe on the power of employee stock option, as a motivator in a company. By giving the employee their own piece of pie of the company’s business, they’re effort will be directly proportional to their “bonuses”, which will come from dividends to their stocks. There are a lot of companies doing this practice and most of them are pretty successful in their industries, just like the IT companies at Silicon.

By: Friday Finance Followers – Finding Your Focus Edition | Suburban Dollar

Mon, 22 Feb 2010 14:02:50 +0000

[...] asks if bonuses are really effective motivators. He almost lost me with the opening statement, but only because it is late and my brain isn’t [...]

By: Financial Samurai

Financial Samurai — Wed, 17 Feb 2010 11:39:09 +0000

It’s not the absolute bonus amount that drives most people after the first couple bonuses. It is the relative EXTRA amount of bonus one gets over the average bonus that really drives people.

The amount can be as little as getting $1,000 vs. the avg of $500, or $500,000 vs. an avg of $250,000. If everybody was getting a $500,000 bonus in other words, everybody would be not be very motivated.
Financial Samurai´s last blog ..The Most Important Tip For Job Hoppers: Join People, Not Firms

By: David/Yourfinances101

David/Yourfinances101 — Wed, 17 Feb 2010 10:43:09 +0000

I’d say that if the bonuses were based on increased “measurable” results, then it would work.
If you’re asking someone to be more “creative”, how can that really be measured?

If you reward them for increasing monthly profits by 5%, then I think you would see the results.

My job has almost always been bonus-based, and as long as I know exactly what I need to do to get the bonus, then it is much easier.

I understand the results of the studies, but I don’t get it at all.

Of course I wuld be motivated more by the bigger carrot
David/Yourfinances101´s last blog ..Sledding and Fixing Your Finances

By: MyLifeROI

MyLifeROI — Tue, 16 Feb 2010 16:37:54 +0000

@Ken,

For sales, it can be based on total revenue (thus pushing total sales), profit (pushing higher margin items), mix (pushing product breadth), etc.

In other functions, like the supply chain, you may see bonuses for minimizing out of stocks. For warehouse, it could be on warehouse productivity or controlling costs.

I think in most cases it will ring true that a bonus does not enhance quality as much as it does increase activity. In your example, O/T.. it definitely increases activity!

By: Kosmo @ The Casual Observer

Kosmo @ The Casual Observer — Tue, 16 Feb 2010 14:53:52 +0000

“Now, I am going to run three different rounds in a vacuum.”

This would really suck.

:)
Kosmo @ The Casual Observer´s last blog ..Knee Jerk Reactions