Bonus and Performance of Employees

The bonuses are the variable part of the salary, which depends on the performance of the employee. Just this is enough for the managers to believe, the bonus is the best motivation tool for the employees. The bonuses do not increase the productivity and performance, they focus employees on important goals for the manager and the organization.

The employees perceive their own performance as stable or constantly growing. No employee has the feeling, that the performance is decreasing and they always perceive their own value for the organization as growing. The bonus can be a dangerous feedback for them.

The bonus is flexible part of the salary, but the flexibility is dangerous. The flexibility has to be repeatedly communicated as the employees have no mirror on their own. The flexibility of bonuses is in the regular feedback to employees about their performance and the progress in the fulfillment of the goals given to them.

The bonus acts as the final confirmation, it is not the first message about the performance to the employee. When the bonus is not explained during the year, it just de-motivates, it does not act as the motivation for the next year. The employee will start to complain and the manager has a real managerial issue.

The bonus is a good motivational tool, when the organization grows and the bonus is higher every consequent year. When the organization does not grow, the bonus needs a good explanation to employees as they see themselves as not adding any value to the organization.