This is really episode 38. So, doo you want a bonus or are you responsible for determining who gets one and how much at work? Well this week Katie and I take a dive into the year-end bonus idea and explore the many benefits and issues that can come along with them. From expected utility theory to the radical approach of just asking a team to determine their own dollar amounts, we show the good side and the not-so-good side of employee bonus programs.
Employee bonus’ have their place for sure so we aren’t saying that they are all bad. However, we do point to some interesting findings that can occur as a result of them. From fraud to jealousy and competition, the way a bonus program is engineered really matters and probably a lot more than the amounts offered. We explore real-life examples from Green Giant to Google and the issues that were created in their companies buy bonus and reward programs. That being said, offering a bonus for exceptional completion of the more mundane parts of our job might just have a place. We aren’t proposing that employee bonus programs get wiped off the map. As a matter of fact, they can be a great way of sharing the rewards of a positive year. What we are saying though is that without some solid thought and a stellar set up, the feedback effects from them are probably not worth it in the long run.