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Eric Mosley, CEO of Globoforce, writes in HBR.org an article titled: “You’re Getting a Bonus! So Why Aren’t You Motivated?” in which he goes against the idea of a yearly bonus. A short quote:
The problem is that, even if it’s true that contingent compensation spurs higher performance (and not everyone thinks it does – see, for example, this pdf), when the reward comes as one big check cut by the finance department at the end of the fiscal year, that motivating effect is mainly lost. That’s because the bonus fails to make two critical connections: 1.The connection between values and behavior… 2. The connection between a worker and his/her direct supervisor.
True and powerful words. I agree with every word. But I think the problem is even more basic than that.
The problem is in the assumptions underlying this practice. Not only for managers or academics, but for the working people too. We have a culture that worships money. A culture where we believe money, at any point, is the solution. And the more the better.
But it is not. Not in any meaningful way. And certainly not the more the better.
If you ask people what they want – probably money will be the answer. I was talking to an agent about a job the other day. He told me the pay for the position I was applying to is not that good. My answer was, “OK, but other things matter to me, beside the pay”. “Yes, of course” he said. “It is a great company, you get paid on time, there is a yearly bonus and everything”.
If you ask people, theoretically, before hand, what will they prefer, a yearly bonus or some other softer reward and recognition that will make them feel good on a day to day basis they will say – the yearly bonus. People already gave up on the idea of feeling good in their jobs, where they spend most of their lives! And you can show them research and studies and even their own results saying that actually when it comes to happiness, they don’t prefer the yearly bonus. And they still would not believe you.
This myth or habit or whatever you want to call it of the end of year bonus has become so ingrained in the culture that it is treated with religious like reverence. And the problem is that most people believe this story they tell themselves. Until we succeed in changing this almost mythological standing of the yearly cash bonus, it will be hard to bring on change.
Like every fight against habit and beliefs, “victory” would not come from rational argument, but from emotional reasoning. Only when people start to feel the motivation, the passion, the flow, will they be convinced that this practice might seem good and even gives them a short rush, but it actually makes their life miserable in the long-run most of the time. It is a long hard struggle, but it is one, we all want to be fighting.